The 10 S&P Dividend Aristocrat Additions For 2012, Allocating This Friday

The S&P 500 (SPY) Dividend Aristocrat Index goes through an annual rebalance, which is set to occur at the close of the markets on December 16, 2011, or this Friday. This year, S&P will also implement a revised methodology that will not consider special cash dividends.

The Dividend Aristocrats include large-cap, blue-chip companies within the S&P 500 that have followed a policy of increasing dividends every year for at least 25 consecutive years. The companies must also have market capitalization of at least $3 Billion and an average daily trading volume of at least $5 million for the first six months prior to the rebalancing date.

As of now, and prior to the rebalancing, there are 42 Dividend Aristocrats. The average market cap for 2011’s Aristocrats, as of today, is just under $25 Billion. The index attempts to maintain an equal-weight portfolio, with re-weighting occurring on a quarterly basis.

Only one company was removed from the index: CenturyLink (CTL). Meanwhile, 10 companies are being added to the Aristocrats, meaning that there will be 51 Dividend Aristocrats in 2012, or that just over 10 percent of S&P stocks are Aristocrats.

Below, I have listed in alphabetical order the additions to the Dividend Aristocrats Index. I have also included their current yields, as well as their 1-month, 6-month and 2011-to-date performance rates.

(Click charts to expand)

S&P has also created a Dividend Aristocrats ETF (SDY), which now has a yield of 3.22%. Below is a chart of its recent market performance:

Some Aristocrats offer substantial yields, including this years addition of AT&T, a frequent Dow Dog that now yields just under 6 percent. It will also be the largest Dividend Aristocrat by market capitalization.

The Dividend Aristocrats do not all yield above the S&P average or the broader market, as one can become an aristocrat by maintaining and regularly increasing a below-average dividend. Many investors still prefer those lower dividends due to management’s maintenance and consistent growth of them.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: This article is intended to be informative and should not be construed as personalized advice as it does not take into account your specific situation or objectives.