The S&P Dividend Monarchs Index is designed to track long-standing companies in the U.S. market that have consecutively increased dividends for at least 50 years. The S&P Dividend Monarchs Index constituents have endured more than a half a century’s market turbulence and demonstrated resilience in dividend growth and stock performance. As a new generation from the flagship S&P Dividend Aristocrats® Index Series, the S&P Dividend Monarchs Index constituents push the threshold of being an elite group of dividend-paying companies to the next level.
- Why was the index introduced?
As a leading dividend index provider, S&P Dow Jones Indices pioneered in developing a dividend growth strategy. Since the early 1980s, our research team started to monitor U.S. companies that increased dividends for at least 10 years. In the early 2000s, as more companies were able to consecutively increase dividend payments, we raised the observation list threshold to 25 years, which then became the initial basket of “U.S. Dividend Aristocrats.” In May 2005, the S&P 500® Dividend Aristocrats was officially launched, which soon became one of the most well-recognized dividend growth strategies in the market. Since then, we have extended the S&P Dividend Aristocrats Series to cover the mid- and small-cap universes and other global markets. As of April 2023, more than USD 40 billion of ETF assets were tracking the S&P Dividend Aristocrats Indices.
Fast forward to 2023, almost 20 years since the launch of the S&P 500 Dividend Aristocrats, we found that the number of companies in the index had grown from 57 to 66. In the past five years, we have noticed a growing number of companies consecutively increasing dividends for more than 50 years (see Exhibit 1), these companies exist not only in the large cap (the S&P 500) but also in the mid- and small-cap universes (the S&P MidCap 400® and the S&P SmallCap 600®). In January 2023, more than 30 companies from the S&P Composite 1500 had increased their dividends for at least 50 years. This created a diversified basket of stocks for a new index concept, prompting the introduction of the S&P Dividend Monarchs Index.
