The Dividend Aristocrats index roughly mirrored the S&P 500 in 2015. These stocks endured some big ups and downs, but ended the year about where they started. A few standouts posted big gains, and a few laggards saw big chunks of their value disappear.
The average Dividend Aristocrat stock performed in line with the broad S&P 500 in 2015 — both were up about 1 percent on the year. There was a pretty wide range of returns among Aristocrats however; Franklin Resources (BEN) lost about one-third of its value, while Hormel Foods (HRL) jumped 54 percent during the year.
Investors who picked the stocks with the longest history of dividend increases would have done quite poorly in 2015; the five Aristocrats with the longest streaks all lost value in 2015, posting an average decline of 13 percent.
Performance gaps among Aristocrats also appear when examined from a sector perspective. The 13 consumer staples Aristocrats posted an average gain of 7 percent in 2015, in line with the Consumer Staples SPDR (XLP).
Though energy sector Aristocrats were the worst performers in 2015, they fared far better than the rest of that sector. The average decline for XOM and CVX was just 14 percent, compared to a 21 percent decline for the Energy SPDR (XLE).
Looking Forward
The Aristocrats continue to maintain an average dividend yield above the S&P 500 (2.6 percent average Aristocrat vs. 2 percent for S&P 500). There is a wide range here as well; yields on Aristocrat stocks are as low as 0.5 percent and as high as nearly 6 percent.
There are two Aristocrats with a yield above 5 percent and three more yielding between 4 percent and 5 percent. The highest yielding Aristocrats are shown in the chart below.
A handful of Aristocrats saw their payout ratios jump in 2015 as earnings declined and payouts rose. There are now eight Aristocrats (CB, BF.B, MHFI, HCP, KMB, T, ABBV, SYY) with payout ratios above 100 percent (though some of these are the result of non-cash or non-recurring expenses). The Aristocrats with the lowest payout ratios at the beginning of 2016 are summarized in the chart below.
Long-Term View
Over a longer period of time, the performance of the Aristocrats remains stellar. Since stocks bottomed in March 2009, the current Aristocrats have returned an average of 276 percent. (Note that this excludes stocks that have been dropped during this period.)
ExxonMobil (XOM) is the laggard with a return of just 46 percent. PPG Industries (PPG) leads the pack with a gain of nearly 700 percent during this period.
You can read more about the Dividend Aristocrats (and download a handy cheat sheet) here.
This article, How Did the Dividend Aristocrats Do in 2015?, first appeared on Dividend Reference.