David Van Knapp presented a simple and seemingly effective
quality scoring system in this article on high-quality, high yield dividend
growth stocks. The system employs five widely used quality indicators from
independent sources and assigns 0-5 points to each quality indicator, for a
maximum of 25 points.
In this article, I use a slightly modified version of the
quality scoring system to rank an elite group of stocks called the Dividend
Kings. Dividend kings are companies that have increased their dividend payouts
for at least 50 consecutive years.
This is a companion article to one in which I ranked the Dividend Aristocrats, which are S&P 500
stocks that have increased their dividend payouts for at least 25 consecutive
years. While there is some overlap between Dividend Kings and Dividend
Aristocrats, the constitution of these lists is different enough so that
several stocks are unique to the Dividend Kings.
Dividend Kings
Dividend Kings are companies that have raised their
dividends for 50 consecutive years or more.
To attain this extraordinary track record, Dividend Kings
had to survive economic recessions and market crashes, technological advances
and busts, and periods of inflation. These companies display the highest
degrees of discipline, commitment, stability, resilience, and reliability.
Dividend Kings have performed quite well when compared to
the S&P 500. While tracking the performance of the Dividend Kings suffers
from survivorship bias, nevertheless, it is informative to consider historical
performance.
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