By Ian Salisbury

Dividend aristocrats are supposed to be conservative blue chips. Lately, they've also been soundly beating the market.

With a slowing economy and the war in Iran, spooked investors have been moving to the perceived safety of hard-hat companies, many of which tend to be dividend aristocrats, companies with decadeslong records of making and raising dividend payments.

The S&P 500 Dividend Aristocrats Index has outperformed the broad market by 13.9 percentage points over the past 100 trading days, according to a note Tuesday by DataTrek Research, its most dramatic stretch of outperformance since 2010. (To put the in context, the S&P 500 is down 6.9% over that time frame, according to Dow Jones Markets Data.)

" Dividend-focused investing is certainly having its moment in the sun," wrote DataTrek co-founder Nicholas Colas, in a note Tuesday. "Capital is clearly leaving parts of the market where companies are investing heavily in uncertain projects (i.e., Tech) and moving to sectors and businesses with strong dividend-paying track records."

One thing that may be surprising: The dividend aristocrats index has only a slight tilt to the red-hot energy sector. Energy stocks represent about 4.8% of its constituents, compared with 4.2% of the broad market, according to DataTrek. Instead, its biggest overweights are in defensive sectors that have also held up well during the recent sell off. Utilities and consumer staples represent 33% of the index, compared with 7.9% of the S&P 500.

For investors that want to seek out the market's most reliable dividend payers, the simplest solution is probably the ProShares S&P 500 Dividend Aristocrats ETF, which tracks the benchmark. Launched in 2013, it boasts an expense ratio of 0.35%.

Looking for individual stocks? To come up with some names, Barron's screened the fund's holdings for consumer staples and utilities stocks that are expected to be profitable in 2026 and boast dividend yields of 3%. We also excluded stocks with dividend payout ratio above 90%, to ensure payouts are sustainable.

For utilities, we came up with two names: Consolidated Edison, with a 3.1% dividend yield; and Eversource Energy, yielding 4.6%.

In consumer staples there were four names: Kimberly-Clark, yielding 5.3%; McCormick & Co. (3.6%); Sysco (3.1%) and Target (3.4%).

While Target has struggled in recent years, lagging behind the S&P 500 and larger rival Walmart, the shares are up 23% so far in 2026, thanks to optimism surrounding new CEO Michael Fiddelke, who took the reins Feb. 1.

Write to Ian Salisbury at ian.salisbury@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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April 01, 2026 03:00 ET (07:00 GMT)

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