Exceptional eight
The superheroes that have raised their dividends for more than 50 years
The Association of Investment Companies (AIC) has published its latest list of 18 dividend heroes, investment companies which have consistently increased their annual dividends for at least 20 years in a row.
Eight of the 18 dividend heroes have increased their dividends for 50 or more consecutive years. City of London Investment Trust, Bankers Investment Trust and Alliance Trust lead the pack with 56 years of dividend rises, followed by Caledonia Investments (55 years), The Global Smaller Companies Trust (52), F&C Investment Trust (52) and Brunner Investment Trust (51). The latest addition to the half-century club is JPMorgan Claverhouse, which announced its 50th year of increased dividends on 31 January.
Five dividend heroes have increased their dividends each year for between 40 and 49 years and a further five have increased their dividends consecutively for between 20 and 39 years. A full table of all 18 dividend heroes can be found at theaic.co.uk.
The next generation of dividend heroes are those that have increased their dividends for 10 or more years in a row but fewer than 20. Click here to see the full list of next generation of dividend heroes.
“Investment companies’ ability to hold back up to 15% of the income they receive each year gives them an edge when it comes to delivering dividends to investors."
Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC), said: “Investors are looking for ways to protect their income in a more inflationary environment. Investment companies’ ability to hold back up to 15% of the income they receive each year gives them an edge when it comes to delivering dividends to investors. It means investment companies can reserve income when times are good to pay out in leaner years, providing smoother, more consistent dividends to investors.
“It’s remarkable that there are now eight dividend heroes with at least half a century of consecutive annual dividend increases. These dividend heroes are no strangers to difficult times, having raised their payouts to investors through the high inflation of the 1970s, recession of the 1990s and the global financial crisis in 2008. While dividends are never guaranteed, these are track records to be proud of.”
William Meadon, Manager of JPMorgan Claverhouse, said: “Our approach avoids making large bets on stocks, sectors or styles. Instead we focus on running a diversified portfolio of attractively valued, high-quality stocks, that has the ability to generate consistent and growing dividends over the long-term. This balanced approach, alongside the investment trust structure, has allowed the company to hold back a proportion of payouts in good times, to supplement reliable income in difficult periods.
“We understand that stable and growing income is of upmost importance to our shareholders, and we are confident that we can maintain our record of dividend growth. To do that, we will continue to look for opportunities in predominantly large, well-diversified FTSE 100 stocks, many of which continue to pay growing dividends.”
Craig Baker, Manager of Alliance Trust, said: “We are one of a handful of investment trusts that have been able to increase their total ordinary dividend for 56 consecutive years. Our aim is to continue delivering a rising dividend year after year as well as capital growth. If you had invested £100 at the start of 1968, you would have £23,926 at the end of 2022 if you reinvested your dividends, and £5,643 if you did not.
“To continue to pay a progressive dividend, we make use of distributable reserves to support this policy. When we have higher levels of income, we may retain part of it or pay a special dividend.
“By selecting stock pickers with distinctive investment styles, we can continue to focus on both income and growth, with the aim of building on our 56-year plus track record of dividend growth.”
Job Curtis, Manager of City of London Investment Trust, said: “At the core of the portfolio have been companies that are consistent dividend growers. In addition, the investment trust structure has been a key factor behind our long dividend track record."
Job Curtis, Manager of City of London Investment Trust, continued: “We have drawn from revenue reserves in difficult years for dividends in the markets, such as 2020 and 2021, to enable us to increase our dividend.”
“In a high inflation environment, income from stocks is preferable to income from bonds or savings accounts.
Craig Baker, Manager of Alliance Trust, said: “In a high inflation environment, income from stocks is preferable to income from bonds or savings accounts. The former tends to pay a set rate of interest, and savings income rarely beats inflation. Our stock pickers look for companies which can grow their earnings and therefore dividends in line with inflation by raising prices, provided they have sufficient pricing power.”
Job Curtis, Manager of City of London Investment Trust, said: “Interest rates are higher than they have been since the global financial crisis but at a level that would have been seen as normal before 2009. Equities offer the prospect of dividend growth and will, in our opinion, continue to be attractive for those seeking income.”
William Meadon, Manager of JPMorgan Claverhouse, said: “Sentiment towards UK equities, particularly large cap companies, has improved in recent months on the back of the FTSE 100 index recently reaching an all-time high. Many UK companies are enjoying strong cashflows and are often passing these back to shareholders through either higher dividends or share buybacks.
“We think the outlook for traditional high dividend payers such as banks, energy companies and miners looks particularly encouraging despite this new era of higher interest rates.”
