What is a Dividend Champion? And Why You Should Invest in Them!

The following post is guest post written by John Schroeder. If you’d like to contribute a guest post to The Dividend Ninja, check out our guest posting guidelines.

Dividend Aristocrats: Bulls of the NYSEWhen it comes to investing in U.S. dividend stocks, there are several places you can start your search for companies to add to your portfolio. For example, many investors turn to the Dividend Aristocrats which are found on the S&P 500 Dividend Aristocrats Index. Members of the Dividend Aristocrats Index must consistently raise their dividend for 25+ consecutive years and also be a member of the S&P 500.

In the event a company on the index freezes or lowers their annual dividend, then the stock is dropped at the end of the year. This set of strict criteria can give dividend investors a head start into searching for well-managed companies that continue to pay back their shareholders.

Besides the Aristocrats, there are several other lists or indexes of dividend paying stocks that investors can use. One such list is known as the Dividend Champions.

What is a Dividend Champion?

Similar to the Aristocrats, Dividend Champions are comprised of stocks that consistently raise their dividend each year for 25 consecutive years. However, unlike the Aristocrats, the Champions don’t need to be included on the S&P 500. Based on this criterion, a company does not have to meet certain market capitalization or trading volume requirements. By eliminating the market capitalization and other requirements, investors may uncover some great stocks that were not on their radar.

The list of U.S. Dividend Champions is updated at the end of each month and maintained by Dave Fish. The list is free for personal and non-commercial use and can be found at – The DRiP Investing Resource Center in Excel or PDF format.

Another big difference between the Aristocrats and the Champions is the frequency they are updated. The S&P 500 Dividend Aristocrat Index is updated at the end of each year. On the other hand, the Dividend Champions list is updated at the end of each month and contains a ton of useful financial data.

Dividend Contenders and Challengers

In addition to the Dividend Champions, the publication also includes 2 other lists of stocks that meet certain criteria. These lists are known as the Dividend Contenders and Dividend Challengers and can offer even more potential stock picks for your portfolio.

Dividend Contenders – Stocks traded in the U.S. that have raised dividends between 10 to 24 consecutive years. Once a Contender hits the 25 year mark they are moved up to Champion status. If you are looking for companies in the Information and Technology sector, then you may want to look at Dividend Contenders. There are currently 18 IT companies found on the list including some household names like Intel Corp. (INTC), Microsoft Corp. (MSFT), and International Business Machines (IBM). The Dividend Champions on the other hand only have 3 IT companies.

Dividend Challengers – This list includes stocks traded in the U.S. that have raised dividends between 5 to 9 consecutive years. While these companies don’t have the dividend history of Contenders and Champions – there are still some great stocks to be found. Well-known companies like Visa (V), Verizon Communications (VZ), and Philip Morris International (PM) can be found here.

Final Thoughts

Successful investors often look to published lists like the S&P 500 Dividend Aristocrats Index as a way to search for quality dividend stocks. Stocks found on this list are often well-managed companies that have a solid history of raising their dividends. While the Aristocrats can be a great place to start, the number of companies on the list can be limited by market capitalization requirements and other factors.

Another option is to use the Dividend Champions list of stocks to find even more ideas. While the Champions are still required to have consistently raised their dividend for the past 25 years, there are no additional requirements of market cap, etc. This opens up several other possibilities for investment ideas that may not have known by looking just for Aristocrats.

Dividend Contenders and Challengers provide even more potential stock ideas for investors. Companies found on these lists may someday be Aristocrats and/or Champions but simply don’t have the long dividend history.

Have you used the Dividend Champions list to search for stocks to add to your portfolio? How do you like it compared to other published lists like the Dividend Aristocrats?

John Schroeder is a personal finance blogger who enjoys writing about investing in dividend stocks. He holds a Bachelors in Business Administration and a Masters of Science in Information and Technology. You can follow him at his new blog, www.themoneysprout.com.

14 thoughts on “What is a Dividend Champion? And Why You Should Invest in Them!”

  1. Hi John,

    Glad to see you are doing well, and still interested in dividend investing. Dave Fish has indeed created a great service for busy dividend investors.

    As you gain more knowledge however, it is important to create your own list of dividend growth companies to track.

    Best Regards,

    Dividend Growth Investor

    • @DGI – Appreciate the feedback on creating your own list. I think the Dividend Champions and other lists are still a great place to start and get ideas to at least start the screening process.

      Thanks again!

  2. Great article – thank you very much!

    One buddy says to me:
    You have only to look at the list from Dave Fish!
    If the company is listed on the list – you can buy this company.
    It the company is no longer on the list, then sell it as fast as possible.
    No work – only check the list monthly…

    I do not know if that is sufficient to successfully invest.
    But the idea is not bad 😉

    Best whishes!

    • @DS – Thanks I appreciate it. I wouldn’t recommend only following this list to make your decisions. However, using it as a tool to help screen stocks can certainly save investors a lot of time.

  3. Hello
    My watchlist actually went down by 8 stocks this month, so I have less to research. I’m really surprised you don’t already own ADM, it seems like it’s right up your alley.

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