What is a Dividend Champion?

From Recessions to Recoveries: Why Dividend Champions Never Miss a Beat

Quick Definition: A Dividend Champion is a company that has consistently increased its dividends and distributions for at least 25 consecutive years, offering a history of reliable and growing payouts for investors.

Why Dividend Champions Caught My Attention: When I started focusing on dividends and distributions in 2012, I was amazed by companies that could increase their payouts year after year. Think of it like a reliable software system that keeps getting better updates - these companies have proven they can deliver consistent improvements to their shareholders.

Dividend Champions represent something I deeply respect: consistency and reliability. After years of day-trading futures and building automated trading systems in the 90s, I learned that sustainable, predictable income beats flashy quick gains every time.

These aren't just companies paying dividends and distributions. They're businesses that have increased their payouts for 25 straight years or more, proving their staying power through recessions, market crashes, and economic uncertainty.

Here's a list of the current top 10 Dividend Champions (by yield%)...

# Ticker Name Yield (%)
1 UHT Universal Health Realty Income Trust 7.95%
2 WASH Washington Trust Bancorp Inc. 7.91%
3 EPD Enterprise Products Partners L.P. 6.89%
4 AMCR Amcor PLC 6.26%
5 UVV Universal Corporation 5.92%
6 ENB Enbridge Inc. 5.49%
7 BEN Franklin Resources Inc. 5.38%
8 O Realty Income Corp. 5.36%
9 KVUE Kenvue Inc. 5.26%
10 TGT Target Corporation 5.11%

Yields are subject to change and not guaranteed.

What Makes a Company a Dividend Champion

The criteria is simple but powerful. A Dividend Champion must have increased its dividends and distributions for at least 25 consecutive years. That's it - no other requirements needed.

This might sound easy, but it's incredibly difficult to achieve. Companies face countless challenges over 25 years - economic downturns, industry disruptions, management changes, and competitive pressures.

Think of it like maintaining a perfect attendance record for 25 years at work. Life throws curveballs, but these companies find ways to keep delivering for their shareholders no matter what happens.

For example, Procter & Gamble and Johnson & Johnson have earned this title by navigating multiple recessions while still raising their payouts. As someone who's lived through several market cycles, I find this kind of consistency remarkable.

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Why Dividend Champions Appeal to Income Investors

From my systems thinking background, I appreciate what these assets bring to a portfolio. Here's what makes them valuable:

    • Reliable Income Growth

      Unlike bonds that pay fixed amounts, these assets typically increase their payouts annually. An investor's income stream grows over time instead of staying flat.

    • Quality Signal

      To increase dividends and distributions for 25 years requires excellent management, strong cash flow, and a sustainable business model. It's like finding software that runs perfectly for decades - rare and valuable.

    • Inflation Protection

      As living costs rise, these companies often raise their payouts to help investors maintain purchasing power. I learned this lesson the hard way during my touring musician days when gas prices would eat into our profits but we weren’t making any MORE money.

    • Less Stress

      These assets require less constant monitoring than high-growth or speculative investments. The track record speaks for itself.

    While Dividend Champions might not offer the highest initial yields compared to riskier assets I personally prefer, their consistent growth can create impressive returns over time.

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    Real-World Investor Scenarios

    Here's how different investors might approach Dividend Champions:

    🎓
    The 20-Year-Old Starting Out
    A young professional might invest $50 monthly into a mix of Dividend Champion assets. Even small amounts compound beautifully when reinvested over decades. Starting early gives time for both the principal and growing dividends to work together. Their internet bill is probably more than that but that bill will never pay them back.
    🏡
    The 35-Year-Old Building Wealth
    A mid-career professional with a $75,000 portfolio might allocate 30-40% to established Dividend Champions. They provide stability while other investments handle growth. This creates a balanced approach to wealth building.
    ⛳
    The 55-Year-Old Preparing for Retirement
    Someone nearing retirement might increase their allocation to 50-60% in Dividend Champions. The reliable and growing income can supplement Social Security and other retirement plans while still providing some growth potential.

    Please keep in mind that I’m not a professional or licensed financial advisor and this is not financial advice. I create all of my articles based on my personal experience and research. Check out our full disclaimer(s).

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    Finding Dividend Champions

    Locating these assets is straightforward. Several financial websites maintain updated lists of Dividend Champions, including our list: Full Current List of the Dividend Champions. The key is understanding what to look for once an investor has a list.

    When evaluating potential investments, I treat it like debugging code - examine each component carefully. Look at the company's business model, competitive advantages, and financial health. A 25-year streak means something, but understanding why they achieved it matters more.

    An investor can start building a portfolio through platforms like those on Everdend’s Top Brokerage Picks, many of which offer commission-free trading and fractional shares. This makes it possible to begin with small amounts while learning the ropes.

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    Getting Started with Dividend Champions

    My approach comes from years of building systems - start simple, then expand:

      • Research First

        Study different Dividend Champions and understand their businesses. Like learning a new programming language, foundation knowledge prevents costly mistakes later.

      • Start Small

        Begin with amounts that fit an investor's budget. Fractional shares mean someone can own pieces of expensive assets without needing thousands of dollars.

      • Focus on Quality

        Choose companies with businesses an investor understands. I prefer assets where I can explain how they make money in simple terms.

      • Reinvest Initially

        Let those dividends and distributions compound by buying more shares automatically. This accelerates wealth building, especially in early years.

      The best systems grow incrementally and the same principle applies here - build positions gradually while learning from experience.

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      Common Dividend Champion Sectors

      These assets span various industries, each with different characteristics:

        • Consumer Staples

          Companies selling everyday necessities like food, beverages, and household products. People need these regardless of economic conditions.

        • Healthcare

          Pharmaceutical and medical device companies with steady demand. An aging population creates consistent revenue streams.

        • Industrials

          Manufacturing and infrastructure companies that benefit from long-term economic growth. Think railroads, construction equipment, and industrial supplies.

        • Utilities

          Regulated companies providing essential services like electricity and gas. They offer predictable cash flows but typically lower growth.

        Understanding these sectors helps investors diversify across different economic drivers instead of concentrating risk in one area.

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        How Sweet It Is: True Dividend Champion Fact

        One of the coolest Dividend Champions in history is Tootsie Roll Industries—yes, the candy company behind Tootsie Pops and Junior Mints. Despite being in an industry where trends come and go faster than you can unwrap a lollipop, Tootsie Roll has managed to raise its dividend for decades.

        The company often pays part of its dividend in the form of extra shares rather than just cash. That means long-term investors didn’t just get paid to hold candy stock—they literally got more candy stock as part of their income stream. “More” and “Candy” have always been a perfect combination.

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        Frequently Asked Questions

        What's the difference between Dividend Champions and Dividend Aristocrats?

        Dividend Aristocrats are S&P 500 companies that have increased dividends for 25+ years. Dividend Champions include all companies (regardless of index membership) with 25+ years of increases. Champions is a broader category that includes more assets.

        Do Dividend Champions always outperform the market?

        Not necessarily. These assets prioritize consistency over maximum returns. During bull markets, growth assets might outperform. During downturns, Champions often hold up better due to their stability and income generation.

        Can a company lose its Dividend Champion status?

        Yes, if a company cuts or freezes its dividend for any reason, it loses the designation. The streak starts over from zero. This is why the achievement is so meaningful - maintaining it requires discipline and financial strength.

        Are Dividend Champions suitable for all investors?

        They work well for investors seeking reliable income and steady growth. However, younger investors might want more growth-focused assets, while income-dependent retirees might prefer higher-yielding alternatives. It depends on individual goals and risk tolerance.

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        Building Long-Term Wealth

        Dividend Champions represent one piece of a larger wealth-building strategy. Like the store-brand products I discovered during tight financial times, sometimes the unsexy, reliable choice delivers better long-term value than flashy alternatives.

        These assets work best as part of a diversified approach. An investor might combine Champions with higher-yielding REITs, growth assets, or other income-producing investments based on their specific situation.

        The key insight from my years analyzing systems: consistency beats perfection. A company that increases its dividend 5% annually for 25 years will likely outperform one that increases 15% some years but cuts during tough times.

        Remember Warren Buffett's approach - he focuses on quality companies with sustainable competitive advantages. Dividend Champions embody this philosophy by proving their durability through multiple economic cycles.

        Whether an investor is just beginning their journey or looking to add stability to an existing portfolio, Dividend Champions deserve consideration as part of a long-term wealth-building strategy. They're not the fastest way to riches, but they represent the real way to preserve capital while generating growing passive income over time.

        Chuck D Manning
        Everdend Owner/Contributor

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