The 5 Highest Yielding Dividend Aristocrats

Hello, YieldAlley readers! In this week’s newsletter:

• Cash Income Opportunities: Money market funds, brokered CDs, Treasury bills, and ultra short-term bond ETFs.

• Read of the Week: The 5 Highest Yielding Dividend Aristocrats

• Elsewhere: Home prices are up 42% since 2020, Interest rate cuts aren’t imminent, Sam Bankman-Fried sentenced to 25 years, Boeing CEO to step down

Cash Income Opportunities For the Week Ending March 29, 2024

Government Money Market Funds (7-Day Yields)

Charles Schwab Money Market Funds

• SNVXX (Schwab Government Money Fund - Investor Shares): 5.03%

• SNSXX (Schwab U.S. Treasury Money Fund - Investor Shares): 5.02%

Fidelity Money Market Funds

• SPAXX (Fidelity Government Money Market Fund): 4.97%

• FDLXX (Fidelity Treasury Only Money Market Fund): 4.96%

Merrill Edge and Merrill Lynch Money Market Funds

• TTTXX (BlackRock Liquidity Funds: Treasury Trust - Institutional Class): 5.19%

• TOIXX (Federated Hermes Treasury Obligations Fund - Institutional Class): 5.17%

Vanguard Money Market Funds

• VMFXX (Federal Money Market Fund): 5.28%

• VUSXX (Treasury Money Market Fund): 5.29%

Brokered CD Rates (6-Month)

• Charles Schwab: N/A

• E*Trade: 5.25%

• Fidelity: 5.15%

• Merrill Edge and Merrill Lynch: N/A

• Vanguard: 5.35%

T-Bill Rates

• 3-Month: 5.37%

• 6-Month: 5.33%

• 1-Year: 5.04% (up from 4.98% last week)

Ultra Short-term Treasury Bill and Floating Rate Note ETFs (30-Day Yields)

• SGOV (iShares 0-3 Month Treasury Bond ETF): 5.26%

• BIL (SPDR Bloomberg 1-3 Month T-Bill ETF): 5.18%

• USFR (WisdomTree Floating Rate Treasury Fund): 5.39%

• TFLO (iShares Treasury Floating Rate Bond ETF): 5.37%

The 5 Highest Yielding Dividend Aristocrats

Last week, we introduced the Dividend Aristocrats, an index of companies in the S&P 500 that have raised their annual dividends for at least 25 consecutive years. The idea of investing in Dividend Aristocrats is that the index consists of high-quality companies producing stable and real earnings.

This week, we introduce the top 5 highest yielding S&P 500 Dividend Aristocrats to give you an idea of the types of these businesses.

1. 3M Co. (ticker: MMM)

Trailing Dividend Yield: 5.67%

15-Year Return: 8.54%

Years of Consecutive Dividend Increases: 66 years

Industry: Conglomerates

Company Profile: 3M is a multinational conglomerate that has operated since 1902. 3M has four business segments: safety and industrial, transportation and electronics, healthcare, and consumer. Almost half of the company’s business comes from outside the USA, primarily from the safety and industrial segment constituting a plurality of net sales. The company currently has a market cap of $59 billion and generated revenues of $33 billion in 2023.

2. Realty Income Corp (ticker: O)

Trailing Dividend Yield: 5.68%

15-Year Return: 11.11%

Years of Consecutive Dividend Increases: 26

Industry: Real Estate

Company Profile: Realty Income owns roughly 13,400 properties across 49 states and Puerto Rico. Its properties are leased to 250 tenants from 47 industries, including industrial, gaming, manufacturing, and distribution. The company has a market cap of $47 billion and generated revenues of $4 billion in 2023.

3. Amcor Plc (ticker: AMCR)

Trailing Dividend Yield: 5.21%

15-Year Return: N/A (Amcor acquired Bemis, a packaging competitor, in 2019)

Years of Consecutive Dividend Increases: 40 (including Bemis’ dividend increases before its acquisition by Amcor)

Industry: Packaging & Containers

Company Profile: Amcor is a global producer of plastic packaging primarily for the fast-moving consumer goods, or FMCG, industry. About 85% of earnings are exposed to the flexible packaging business. This is soft disposable plastic for food, drink, healthcare, and hygiene products. The company has a market cap of $14 billion and generated revenues of $14.6 billion in 2023.

4. Franklin Resources, Inc. (ticker: BEN)

Trailing Dividend Yield: 4.34%

15-Year Return: 6.40%

Years of Consecutive Dividend Increases: 44

Industry: Asset Management

Company Profile: Franklin Resources provides investment services for individual and institutional investors. At the end of October 2023, Franklin had $1.335 trillion in managed assets. The company has a market cap of $15 billion and generated revenues of $7.8 billion in 2023.

5. Federal Realty Investment Trust. (ticker: FRT)

Trailing Dividend Yield: 4.26%

15-Year Return: 8.50%

Years of Consecutive Dividend Increases: 56

Industry: Real Estate

Company Profile: Federal Realty Investment Trust is a shopping center-focused retail real estate investment trust. It owns 102 properties and has a presence in eight of the largest metropolitan markets. The company has a market cap of $8.5 billion and generated revenues of $1.1 billion in 2023.

—-

As you can see, S&P 500 Dividend Aristocrats are generally boring, stable businesses that have existed for generations. While many of these companies do not represent high-growth opportunities, the stable dividend income offsets the volatility in those businesses.

It’s best to identify dividend stock income opportunities that target both a total return (growth) and income (stability), whether those are individual stocks or dividend ETFs. We’ll dive into more of these opportunities in the future, and how to find them.

• Home prices are up 42% since 2020 (link)

• Interest rate cuts aren’t imminent (link)

• FTX founder Sam Bankman-Fried sentenced to 25 years (link)

• Boeing CEO to step down amid safety crisis (link)

We’d love to hear from you. If you have any feedback or thoughts, please feel free to directly respond to this email with your message. Our ChatGPT bot is also available for your questions, as is our Facebook group.

If you enjoyed this newsletter, please subscribe here. Investing and saving is more fun with friends and family. You can forward this newsletter to anyone who might find the advice in this email useful!