The best dividend stocks of 2023: Analysis of the dividend kings and their returns compared to the S&P 500.

The best dividend stocks of 2023: Analysis of the dividend kings and their returns compared to the S&P 500.

According to a report by www.wallstreet-online.de, 15 public companies have consistently increased their dividends for more than 60 years, including names like Procter & Gamble and Johnson & Johnson.

According to the financial news portal “Barron’s”, these companies have outperformed the S&P 500 since 1988 with returns of between twelve and 13 percent. Despite these historic successes, the dividend kings had a weaker year in 2023, with a total return of less than ten percent, due to the five percent short-term interest rate environment. In such an environment, returns of two to three percent become less attractive compared to a time with zero interest rates.

One of the companies, American States Water, is at the top with 69 consecutive dividend increases. The utility company is characterized by low volatility and secure dividend growth. Despite an eight percent dividend increase last year and similar earnings growth, the stock has seen a price loss of over 15 percent, reflecting the general trend among highly valued utilities. However, the share could partially make up for the price slide.

The impact on the market is clearly felt as investors experience a reduced attractiveness of low-yielding dividends due to the five percent short-term interest rate environment. This can lead to a shift in investment strategies and influence demand for certain stocks.

Additionally, companies that are able to increase their dividends over a long period of time are expected to continue to have some appeal to long-term investors, as this suggests stability and growth.

Overall, developments in dividend yields and increases reflect changes in the economy and financial markets and may have long-term effects on the industry and investors.