One of the best things about dividend aristocrats is that they’ve shown that no matter what’s going on in the greater economy, their business is fundamentally sound enough to withstand down periods. Take beverage giant Coca-Cola, for example. For the past 59 years, Coca-Cola has increased its annual dividend. The same goes for Procter & Gamble, which has increased its dividend for 65 consecutive years.
During that time, both companies have withstood bear markets, recessions, and other rocky economic times, yet they’ve managed to keep their dividends and increase them.
2. Investors are rewarded regardless of stock price movements
There are two primary ways to make money from owning stocks: selling a stock for more than you paid for it and dividend payouts. While the former is the more obvious way, some investors may overlook how much money can be made from the latter. Dividends, which are generally paid out quarterly, are a way for companies to reward investors for holding onto their stock.
Imagine you invest in a dividend aristocrat like 3M, which has paid out dividends to its shareholders uninterrupted for more than 100 years and has increased its dividend payout every year for the past 64 years. Over the past five years, 3M has seen its stock price drop more than 20% (as of March 29, 2022), yet the company has paid out more than $28 in dividends per share during that time.