IBM has raised its dividend for 25 consecutive years © DIVIDENDHIKE.COM
IBM has raised its dividend for 25 consecutive years © DIVIDENDHIKE.COM

S&P Dow Jones Indices, a division of publicly listed Dividend Aristocrat S&P Global (SPGI) has announced the annual rebalancing results for the S&P 500 Dividend Aristocrats.

Three new dividend stocks will be added to the Dividend Aristocrats Index, effective prior to the open on February 1, 2021. International Business Machines (IBM), NextEra Energy (NEE) and West Pharmaceutical Services (WST) are new Dividend Aristocrats in 2021.

Removed from the Index are Raytheon Technologies (RTX), Otis Worldwide (OTIS) and Carrier Global (CARR). Raytheon is the former United Technologies that merged with Raytheon, a transaction that resulted in the separation of former United Technologies divisions Otis and Carrier Global. The new Raytheon Technologies cut its dividend by 35.4 percent in 2020. Even if the spin-offs are included (both Otis and Carrier now pay a dividend) the total dividend payment of the company did not match the approximately $4.5 billion estimated annual dividend by United Technologies, the Dividend Aristocrat, before the Raytheon merger.

Calculations by show that Raytheon Technologies now pays an estimated $2.9 billion in dividends annually. Otis now pays an estimated $347 million in dividends annually and Carrier now pays an estimated $416 million. Both Carrier and Otis initiated a quarterly dividend in 2020.

The new Dividend Aristocrats just announced by S&P have all just crossed the bar of 25 consecutive years of dividend increases needed for inclusion in the famous dividend growth index. IBM announced a 0.6 percent dividend hike in 2020, marking 25 consecutive years of increases.

West Pharmaceutical Services announed a 6.3 percent dividend hike last year, marking 28 straight years of increases. Finally, NextEra Energy, one of the big gainers of the 'green revolution' in investing, boosted its dividend by 12 percent in 2020, marking 26 years of increases.

If we are correct, there are now 64 Dividend Aristocrats, with Ross Stores being deleted during the year in 2020 after the dividend was suspended by the off-price retailer. The average dividend yield for all Aristocrats currently is 2.7% with oil major Exxon Mobil now offering the highest yield with 7.3%. Please not that Exxon did not announced a dividend hike in 2020 for the first time in decades.

Last year S&P added 7 new Dividend Aristocrats, including the above mentioned Ross Stores.

Dividend Calendar

Look at the complete list of upcoming events
Ex-date Ticker Yield YTD hike
Feb 01 FAST 2.8% 12.9%
Feb 02 BRO 0.8% 0.0%
Feb 02 NSC 2.3% 8.9%
Feb 02 WFC 2.6% 0.0%
Feb 02 LW 1.1% 0.0%
Feb 02 COST 0.7% 0.0%
Feb 03 BKR 2.5% 0.0%
Feb 03 C 3.9% 0.0%
Feb 03 COF 2.1% 0.0%
Feb 06 AWK 1.7% 0.0%