The Nasdaq Dividend Achievers Index is comprised of stocks that have raised dividends for a minimum of 10 consecutive years and have minimum liquidity requirements as set by the Nasdaq Exchange. This begs the question. How is the Dividend Achievers index different from the Dividend Aristocrats?
Primarily, the difference is the number of years that stocks in these indexes have raised their dividends. For dividend aristocrats, it is set at a minimum of 25 consecutive years, versus 10 years for the Achievers index.
Nasdaq has created this index for investors to be able to invest in companies that are in good financial health, are growing earnings, cash flows and dividend payments. A dividend payment is a vote of confidence from the company’s leadership team that the enterprise is doing well, generating cash flows in excess of operating and capital expenditures and is able to reward shareholders with cash dividends.
Another advantage of dividend achievers is these companies have survived multiple economic cycles and come out on the better side. They possess built-in values that make them resilient during recessions, and thriving during economic boom times.
What Stocks are in the Nasdaq Dividend Achievers Index?
Readers can download a Microsoft Excel Spreadsheet of all stocks in the Nasdaq US Dividend Achievers Index, as licensed by the Vanguard Dividend Appreciation ETF with ticker symbol VIG. This is a very popular ETF that tracks the US Dividend Achievers and has almost $50 billion in assets under management.
The Excel Spreadsheet contains lots of useful metrics readers can use to research specific stocks, use this list as a starting point for further due diligence.
- Market Capitalization
- Dividend Yield
- Forward Price to Earnings (PE)
- Dividend Payout Ratio
- 5 Year Revenue Growth
- 5 Year Earnings Growth
- 5 Year Dividend Growth
- Return on Equity
- Return on Assets
- Price to Sales
- Price to Book
- Annual Revenues
- Operating Income
- Net Income
- Total Assets
The Excel file can be sorted, filtered and analyzed in various ways to come up with good investment ideas. As an example, the list can be filtered for the highest yielding dividend stocks, stocks with the highest market capitalization or annual revenues, or stocks with the lowest dividend payout ratios.
Here are the steps to work with the file.
Step#1: Highlight all the cells from Rows 1 to 168.
Step #2: On the Quick Access toolbar, select the “Data” tab and hit on “Sort.”
Step #3: In the Sort dialogue box, you can select Sort by: Dividend Yield, Sort on: Values and Order: Largest to Smallest.
Step #4: Click OK button once all these parameters are selected.
See attached screenshot on how to sort and filter the worksheet to achieve desired results.
Chart of the Nasdaq Dividend Achievers
Attached chart shows performance of the Vanguard Dividend Achievers ETF (VIG) over a 10 year period with the S&P 500 overlaid in yellow line. A $10,000 investment in the S&P 500 10 years ago would be worth $30,221.3 today.
Additionally, a $10,000 investment in the Vanguard Dividend Achievers ETF (VIG) 10 years ago would be worth $28,136.97 as of the time of this writing in May 2020.
It appears that the Vanguard Dividend Appreciation ETF has under performed the S&P 500 by about $2000 in nominal growth. To be fair, this performance is adjusted for fees while the S&P 500 line does not account fees.
The fees charged by Vanguard to manage this ETF is 0.06% which is among the lowest in the industry.
In percentage terms, the Vanguard Dividend Appreciation ETF has risen at a compounded annual growth rate (CAGR) of 10.9% over the last 10 years, 9.41% over 5 years and 9.59% over 3 years. As you can tell, this performance is consistent through out multiple time periods.
What Sectors Make up the Nasdaq Dividend Achievers?
8 sectors comprise the Nasdaq Dividend Achievers Index with the largest single sector being Industrials at 24.6%. Consumer Services is the second largest sector composing 19.9%. Consumer Services is third at 19.9% while Health Care is fourth at 13%. It is interesting to note that Technology makes up only 10.7% of the index because large cap Tech companies like Google, Salesforce, Adobe do not pay dividends.
Attached graphic shows equity sector diversification of the Dividend Achievers index.
Source: Vanguard VIG Portfolio
Top 10 Holdings of the Nasdaq Dividend Achievers Index
The top 10 stocks within the Vanguard Dividend Appreciation (VIG) ETF that represents the Nasdaq Dividend index are shown below. In total, they comprise almost 38% of the entire index. This means an investor buying this ETF will be highly exposed to the performance of the top 10 stocks in the index, with the likes of Microsoft, Walmart, Visa, Costco, McDonalds, etc.
1 Microsoft Corp.
2 Walmart Inc.
3 Procter & Gamble Co.
4 Visa Inc.
5 Johnson & Johnson
6 Comcast Corp.
7 Abbott Laboratories
8 McDonald’s Corp.
9 Costco Wholesale Corp.
10 Medtronic plc
Who Owns the Nasdaq Dividend Achievers Index?
The Nasdaq Dividend Achievers Index is owned and managed by the Nasdaq Exchange. It was initially formed in 1979 by Moody’s Investor Services and acquired by Nasdaq in 2012. There are many variations of the Nasdaq Dividend Achievers index including the following.
There is a dividend achievers index for each major geography including Canadian and UK, International and select buyback achievers.
- Nasdaq Dividend Achievers Select™ (DVG)
- Nasdaq Intl Dividend Select (DVGI)
- Nasdaq U.S. Broad Dividend Achievers (DAA)
- Nasdaq Dividend 50 (DAY)
- Nasdaq Broad Canadian Dividend (DACA)
- Nasdaq U.S. Buyback (DRB)
- Nasdaq Select Canadian Dividend (NQCADIV)
- Nasdaq UK Dividend (UKDA)
This list is provided by the Nasdaq.
Interesting Facts About the Dividend Achievers Components
Lets have some fun and report interesting facts about stocks in the Nasdaq Dividend Achievers Index using this Excel spreadsheet.
Fact#1: Top 10 Stocks with the highest revenues as of 2019 make up $1.7 trillion in annual revenues.
|Component Name||Annual Revenues (M)|
|Walgreens Boots Alliance||136,866.00|
|Comcast Corp A||108,942.00|
|Johnson & Johnson||82,059.00|
|Raytheon Technologies Corp.||77,046.00|
Fact #2: Top 10 highest dividend yield stocks in the Dividend Achievers index are:
|Component Name||Dividend Yield|
|Walgreens Boots Alliance||4.62%|
|Msc Industrial Direct Company||4.59%|
|Axis Capital Holdings||4.32%|
|Bok Financial Corp||4.30%|
|Genuine Parts Company||4.09%|
Fact #3: For readers searching for companies with the lowest dividend payout ratios and high potential for growth, the top 10 stocks are:
|Component Name||Dividend Payout Ratio|
|American Equity Investment Life||4.98|
|Globe Life Inc||9.91|