Dividend Aristocrats Underperform S&P 500 in May

The Dividend Aristocrats, a group of stocks with a history of consistently increasing dividends, have trailed the S&P 500 in May. The ProShares S&P 500 Dividend Aristocrat ETF (NOBL) is up 0.84% through May 23rd, while the S&P 500 has outperformed. Despite this, the Dividend Aristocrats remain a popular choice for income-focused investors due to their track record of stability and growth.

The Dividend Aristocrats, a group of stocks with a history of consistently increasing dividends, have trailed the S&P 500 in May 2025. Through May 23rd, the ProShares S&P 500 Dividend Aristocrat ETF (NOBL) is up 0.84%, while the S&P 500 has outperformed, gaining 4.43% over the same period [2]. Despite two consecutive months of underperformance, the Dividend Aristocrats find themselves marginally ahead of the S&P 500 index in 2025, with a year-to-date performance of -0.08% compared to the S&P 500's -0.89% [2].

The individual performances of the Dividend Aristocrats in 2025 range widely, with a handful of constituents experiencing double-digit gains, while others have seen double-digit losses. The top 10 best-performing Dividend Aristocrats as of May 23rd are Cardinal Health (CAH) +30.19%, Cintas (CTAS) +22.12%, International Business Machine (IBM) +19.22%, Consolidated Edison (ED) +18.69%, Abbott Labs (ABT) +17.25%, Coca-Cola (KO) +16.14%, Fastenal (FAST) +14.31%, Atmos Energy (ATO) +13.59%, Kenvue (KVUE) +13.22%, and Eversource Energy (ES) +11.94% [2].

Dividend growth remains a significant aspect of the Dividend Aristocrats' appeal. As of now, 41 out of the 69 Dividend Aristocrats have announced a dividend increase in 2025. For instance, Cardinal Health (CAH) increased its dividend rate from $0.5056 to $0.5107, a 1.01% increase, translating to 0.75% dividend growth for the stock in calendar year 2025 [2]. The average dividend growth rate for the Aristocrats in 2025 stands at 4.75%, indicating a potential for higher dividend growth compared to 2024, when the growth rate was 5.78% [2].

The Dividend Aristocrats continue to be a popular choice for income-focused investors due to their track record of stability and growth. However, not all Aristocrats are equally attractive investment opportunities. Promising Aristocrats in 2025, based on potential undervaluation and projected long-term total return, include ABT, ADM, BDX, BEN, CHRW, CLX, CVX, ES, HRL, JNJ, LOW, MDT, MKC, NDSN, NEE, NUE, O, PEP, PPG, SWK, TGT, WST, and XOM [2].

References:
[1] https://www.spglobal.com/spdji/en/indices/dividends-factors/sp-high-yield-dividend-aristocrats-index/
[2] https://seekingalpha.com/article/4790306-best-dividend-aristocrats-for-june-2025