Quick Answer: Dividend Kings are elite companies that have increased their dividend payouts for at least 50 consecutive years, while Dividend Aristocrats have increased them for 25+ years.
If you’re looking for safety, with yield to boot, look at the Dividend Aristocrats and the Kings.
What Are Dividend Kings and Dividend Aristocrats?
With the Aristocrats, you’ll find the cream of the crop of stocks, which have raised dividends for more than 25 years. With the Kings, these are the heavyweights, which have been paying dividends for 50, or more years. What makes them even more special is the fact that even in times of economic disarray, inflation, booms, busts, rising interest rates, recessions, and crashes, they’ve still raised their dividends.
If a company can survive all of that – and pay dividends – it’s worth a look.
Why Long-Term Dividend Payers Provide Portfolio Protection
Companies that consistently grow payouts over multiple decades typically possess durable pricing power, conservative balance sheets, and steady free cash flow. For self-directed value investors, combining dividend-paying heavyweights with economic moat stocks is one of the most reliable ways to hedge against inflation while avoiding speculative downside.
How to Invest: Individual Stocks vs. Dividend Growth ETFs (NOBL)
While you can always buy individual Dividend Kings, you can also diversify and collect yields from related ETFs, too.
Look at the Pro Shares S&P 500 Dividend Aristocrats ETF (NOBL), which carries a yield of 2.71% and holds 67 different stocks, for example.
With an expense ratio of 0.35%, the ETF focuses on the S&P 500 Dividend Aristocrats — high-quality companies that have not just paid dividends but grown them for at least 25 consecutive years, with most doing so for 40 years or more. In fact, some of its top holdings include Caterpillar, Pentair, AbbVie, AFLAC, General Dynamics, Clorox Co., Walmart, Hormel Foods, and dozens more. All of which have a strong dividend-paying history.
Investors can review the full fund profile on the official ProShares Dividend Aristocrats ETF prospectus. For investors seeking additional cash flow without deploying new capital, tools like Portfolio Payouts can help identify monthly distribution opportunities across your existing portfolio holdings.
Watch: How to Value a Company Like a Pro Investor (or Hidden Gems: 3 Stocks Wall Street Is Ignoring)
Frequently Asked Questions About Dividend Kings
Q1: What is the main difference between a Dividend Aristocrat and a Dividend King?
A: A Dividend Aristocrat is an S&P 500 company that has increased its dividend payout for at least 25 consecutive years. A Dividend King is a company with at least 50 consecutive years of dividend increases, whether or not it belongs to the S&P 500. Unlike the Aristocrats, the Dividend King label is informal rather than an official S&P index. Lists can vary slightly by source.
Q2: Why do Dividend Kings protect portfolios during a recession?
A: Many Dividend Kings sell products people keep buying in downturns, such as household goods and healthcare. Steady cash flows can support their dividends, and their share prices may swing less than those of growth stocks.
Q3: What is the easiest way for retail investors to buy Dividend Aristocrats?
A: Investors can buy individual Dividend King stocks, but few, if any, ETFs hold only Dividend Kings. Some investors use a dividend growth ETF instead, such as the ProShares S&P 500 Dividend Aristocrats ETF (NOBL). NOBL holds roughly 70 companies with 25 or more years of dividend increases.
Q4: Can a Dividend King ever cut its dividend?
A: Yes. A company can lose its Dividend King status if its management reduces or freezes its dividend during extreme financial distress. Investors should always examine debt-to-equity ratios and free cash flow payout ratios to ensure dividend safety.
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Written by Dylan Jovine