Unpacking What's Behind The Underperformance Of Dividend Aristocrats

  • The Dividend Aristocrats have significantly underperformed the broader S&P 500 on a total return basis over the past 10-year period. A company could technically maintain membership by increasing its dividend by a penny per year. As long as the streak stays intact, it qualifies. That potentially leaves room for low-growth dividend payers with little real income growth. A long dividend growth streak doesn't guarantee high dividend growth. Income investors looking to outpace inflation may want to look beyond the index and focus more on forward-looking fundamentals and payout growth velocity.