Aristocrat Dividends: What Are They and Why Do They Matter?

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The financial industry is a complex one to try and understand. It has a lot of terms and acronyms that the average investor might not understand. For instance, the term “Dividend Aristocrats.”

Dividend Aristocrats are defined as companies in the SandP 500 that have increased their dividends for at least 25 consecutive years. These are mainly comprised of large, well-known, blue-chip companies. But it’s not easy to fall into this category, and only 51 companies can currently claim the title.

One of these companies is Sherwin Williams, which has increased its dividends each year since 1979 while simultaneously outperforming the market. They’ve done so by 9% every year for the last decade, making them a popular company to invest in for stability.

Of course, it also helps that they are part of a growing industry.

The company primarily serves the needs of architectural and industrial painting contractors and do-it-yourself homeowners. They do this with a network of more than 4,200 stores. However, they also branch into industrial coatings. That’s a broad category that includes coatings like epoxy or the lesser known polyaspartic (which has a much quicker coating time than the six to eight hours epoxy needs).

The reason why this is relevant is that those sectors, particularly the industrial coating industry, are continuing to grow at an impressive clip. In fact, it’s expected to continue to grow well into 2022.

The market for industrial coatings in 2016, according to a recent market report, was listed at $24.2 billion and is expected to reach $31.4 billion by the end of 2022. This is a growth of 3.9% CAGR over the course of those six years.

The market is growing strong for a number of reasons, but mostly due to an increased demand for steel and a growing push for infrastructure building by the government. To prevent corrosion, increase the lifespan of products, and produce a better aesthetic, industrial coatings have been growing in demand.

Of course, there are lots of growth industries, but only 51 dividend aristocrats. For investors looking for reliable stock picks, these companies are often at the top of the list.

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