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The S&P 500® Dividend Aristocrats®
tracks an elite group of companies that have raised their dividends for a minimum of 25 consecutive years. This index has just concluded its annual reconstitution, which was effective at the market close on Jan. 31, 2025. Erie Indemnity Company, Eversource Energy and FactSet Research Systems have been added, which increases the membership list to 69 stocks.
Introducing the Index’s Newest MembersErie Indemnity CompanyErie Indemnity Company is a property and casualty insurance company offering auto, home, business and life insurance. According to the company website,1 Erie Insurance was founded in Erie, Pennsylvania in April 1925 by founders H.O. Hirt and O.G. Crawford.According to their latest quarterly earnings release, as of Sept. 30, 2024, Erie Indemnity’s quarterly net income increased from USD 131.0 million in Q3 2023 to USD 159.8 million in Q3 2024, representing a 22.0% year-over-year increase.Eversource EnergyEversource is an energy company headquartered in Hartford, Connecticut and Boston, Massachusetts with operations that go back to the middle of the 19th century, according to their company website.2 Today they serve 4.4 million customers in the New England region.As of Jan. 31, 2025, Eversource provided a 4.96% dividend yield, more than double the S&P 500 Dividend Aristocrats’ dividend yield of 2.39%.FactSet Research SystemsFactSet Research Systems is a financial data and software company founded in 1978 by Howard Wille and Chuck Snyder. Its current headquarters are in Norwalk, Connecticut, and it has 37 offices in 20 countries according to the company website.3According to FactSet’s latest quarterly earnings release, as of Nov. 30, 2024, the company was highly profitable, with a gross margin of 54.5%, a return-on-equity of 29.2% and a return on invested capital of 15.6%.
The S&P 500 Dividend Aristocrats Sector BreakdownThe new additions had a slight impact on the overall sector weights. As Exhibit 1 shows, the index retained its relatively large overweight in consistent dividend-paying sectors such as Consumer Staples and Industrials. Conversely, the index maintained its large underweights in the Information Technology and Communication Services sectors.
A Long History of Dividend Growth
Exhibit 2 illustrates that following the most recent rebalancing, over 60% of the existing members of the S&P 500 Dividend Aristocrats have increased their dividends for at least 40 years. Additionally, more than 40% of these members have achieved dividend growth for 50 years or longer.
1https://www.erieinsurance.com/our-history
2https://www.eversource.com/content/residential/about/our-company
3https://www.factset.com/our-companyMore By This Author:Locally Sourced But Globally Minded
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