Dividend Contenders

Adding Dividend Achievers to your stock portfolio can enhance your investment list with reliable passive income. However, Dividend Achievers come with risks and opportunity costs, like all investments. Read on to learn about Dividend Achievers, how to screen for consistent dividends, and the pros and cons of investing in these stocks. 

Dividend Achievers History

You can trace the history of the Dividend Achievers list back to the early 1980s when Moody's Investor Service began compiling data on dividend-paying stocks. In 1990, Mergent launched the Dividend Achievers index, which tracked the performance of companies that had increased their dividends for at least 10 consecutive years.

Over time, the Dividend Achievers index grew popular among investors looking for stable, reliable companies that paid regular dividends. In 2005, Mergent launched an ETF (exchange-traded fund) that tracked the performance of the NASDAQ Dividend Achievers ETF, which Invesco later required and renamed the Invesco Dividend Achievers ETF (NASDAQ: PFM). 

Dividend Achievers are not the only classification of stocks increasing dividend payments. Some additional types of stocks you may want to consider investing in can include: 

• Dividend Challengers: Dividend Challengers are companies that have increased their dividends for at least the past five consecutive years. View a Dividend Challengers list to learn more. 
• Dividend Contenders: Dividend Contenders are companies that have increased their dividends for the last ten to 25 consecutive years. Click here to view the MarketBeat Dividend Contenders list and explore these strong dividend stocks.
• Dividend Aristocrats: Dividend Aristocrats are companies that have increased dividends for the last 25 years. Explore MarketBeat'sMarketBeat's Dividend Aristocrats list. 
• Dividend Kings: Dividend Kings are some of the strongest dividend stocks on the market, having raised their dividends for at least the past 50 consecutive years. Explore the Dividend Kings list on MarketBeat. 

Examples of Dividend Achievers

Some current examples of Dividend Achievers include the following:

• Best Buy: Best Buy Co. Inc. (NYSE: BBY) is a multinational consumer electronics retailer that produces home appliances, entertainment products and related services. Best Buy offers many products, such as computers, televisions, home theater systems, smartphones, cameras, video games, appliances and more. Best Buy has consistently increased its dividend by 20% over the past three years. 
• BlackRock: BlackRock Inc. (NYSE: BLK) is a global investment management corporation providing financial services to institutional clients and individuals. BlackRock offers a range of investment solutions, including exchange-traded funds (ETFs), mutual funds and alternative investments. It also provides risk management, advisory, and technology services. Over the past three years, BlackRock has increased its dividend distribution by 13.93%. 
• Caterpillar: Caterpillar Inc. (NYSE: CAT) is one of the largest manufacturers of construction equipment in the world, with a product line that includes excavators, bulldozers, backhoes, motor graders, wheel loaders and more. The company also produces engines for various applications, including mining, marine and industrial use. Caterpillar has increased its dividend distribution by over 6% over the past three years. 

Where to Find a List of Dividend Achievers

Multiple financial databases maintain lists of current Dividend Achievers. To get started, you can use a stock screener to screen dividends for investing, which will sort companies by current dividend yield rates. However, a stock screener usually won't allow you to see a history of dividend payments for each company, which may lead you to invest in a company that doesn't have future plans to increase its dividend. 

Companies like MarketBeat also keep compilations of Dividend Achievers, tracking how often each company increases its dividend. You can browse a complete list of current Dividend Achievers. Remember that this list may constantly change as companies shift their dividend distributions. Companies may also fall off the list if they fail to increase dividends for one year.

Pros and Cons of Investing in Dividend Achievers

While adding a Dividend Achiever to your stock portfolio may create a more reliable stream of passive dividend income, these investments may only be suitable for some. Consider the following list of pros and cons before choosing which Dividend Achievers to choose. 

Pros

The pros of investing in Dividend Achievers:

• Consistent dividend income: One of the most popular reasons to invest in Dividend Achievers is to see a constant stream of passive income. While few companies are legally required to pay out dividends, those with a consistent history of increasing dividend payments may be more likely to do so. 
• Sign of stronger financial management: Companies that consistently increase their dividends often have a disciplined approach to financial management and focus on returning value to shareholders, which increases the chance that you'll see an improved return on your initial investment. 
• Improved stability: Companies with a long history of increasing dividends tend to have enhanced stability, with long corporate records that you can research before you invest. It might appeal to you if you have a long-term focus.

Cons

The downsides of investing in Dividend Achievers include:

• Limited opportunities for growth: Many investors are interested in stocks with a long history of paying out returns, which means that these stocks may be overvalued at the time of buy in, which can mean less chance for capital appreciation, which reduces your overall total return. 
• Dependence on select markets: Dividend-producing companies tend to concentrate in certain sectors, including mortgage issuance and energy production. Investors entirely focused on dividend investing when creating their portfolios may concentrate too heavily on one sector. This can lead to excessive losses if one of these sectors turns negative. 

Dividend Achievers vs. Dividend Challengers

Dividend Challengers are stocks that have increased their dividends for at least the past five to ten years, while achievers are stocks that have increased their dividends for at least ten consecutive years. While Dividend Challengers may have less established history than Achievers, they may present a unique value opportunity, improving returns overall. 

Dividend Achievers vs. Dividend Contenders

Investors interested in companies with even longer dividend distribution histories may be interested in exploring Dividend Contenders. Contenders are companies that have increased their dividend annually for at least the last 10 years but for fewer than 25 years. Like Dividend Achievers and Challengers, stock can be "upgraded" from Achievers to Contenders after consistent years of dividend increases.

Investing in Dividend Achievers

Investing in stocks that have a consistent history of providing investors with increasing returns is a strong predictor of future investment returns. However, it's important to note that past dividend distributions do not guarantee any future returns—and no company can guarantee that it will be able to maintain a specific dividend schedule. Never invest more than you can afford to lose in Dividend Achievers or stocks you buy to create passive income. 

FAQs

Ready to learn more and get started investing in Dividend Achievers? Use the sections below to wrap up your knowledge with a few answers to some of the most common questions about Dividend Challengers and Achievers.