4 Dividend Aristocrats That Could Outperform The S&P 500 During Difficult Times

 | Aug 10, 2022 18:40

  • The S&P 500 Dividend Aristocrats has frequently outperformed the broad S&P 500 in times of economic distress
  • Companies that compose the dividend aristocrats tend to have lower volatility than the broader market
  • As macroeconomic headwinds continue to bring uncertainty to global stocks, let's look closely at four such companies

    • As investors scramble for alternatives to high-growth stocks amid a challenging macroeconomic environment, companies that pay solid, reliable dividends emerge as a great portfolio addition. In fact, the S&P 500 Dividend Aristocrats has frequently outperformed the broad S&P 500 in times of economic distress since its inception in 2005.

    For a company to join the select club of the S&P 500 Dividend Aristocrats, it must meet the following three requirements:

    • To have increased its dividend for at least 25 consecutive years
    • Be part of the S&P 500 index
    • Have a market capitalization of at least $3 billion

    Companies that compose the dividend aristocrats tend to have lower volatility than the broader market, as they often rely on solid balance sheets.

    As macroeconomic headwinds continue to bring uncertainty to global stocks, let's look closely at four such companies.

    h2 NextEra Energy /h2

    With a market cap of about $165 billion, Nextera Energy (NYSE:NEE) is one of the world's largest wind and solar energy generators, with the largest market share of North American wind capacity.