A Fully Franked Australian Dividend Aristocrat Analysis

The US really sets the standard when it comes to world-leading companies. And many of those companies have world-leading dividend track records.

There are 53 stocks in the US which are part of the prestigious ‘Dividend Aristocrat’ club. This exclusive club is reserved for companies that have consistently increased their dividends for at least 25 years in a row without fail!

Of those 53, a few have blessed their long-term shareholders with increasing dividends for 50 or more years! Global Gary might have more to say about some of these in the near future.

But as a Fully Franked Australian dividend investor, I’m more interested in the track record of our local stocks.

The big questions is – does an Australian Dividend Aristocrat Club even exist? Who would make it in? Is there anyone that even comes close to earning this prestigious title?

Let’s look at some answers to these questions, and many more (but be sure to read the very important disclaimer* at the end of this post!)…

The ASX

There are over 2,000 companies currently listed on the Australian Stock Exchange (or ASX).

Nearly 1,300 of those have NEVER paid a dividend.

So that shortens the list of potential Dividend Aristocrats very quickly already.

Below is a ‘heat-map’ analysis of the dividend history of the top 1,000 ASX stocks for the last 40 years, ranked by market capitalisation. Green indicated a dividend increase, red a dividend decrease, and grey is no dividend.

First Fund Dividends and Sustainability

If you’re been around since the very beginning, way, way back at the start of 2018, you might be familiar with my investment F’hilosophy by now:

  1. I’m a big Fan of Index Funds – so yes, I respect Indexing Ian for what he does, even though there will be no index investments in the Fully Franked Fund;
  2. I don’t think the market is fully eFFicient, and as a result it’s possible to find great individual stock opportunities where price and value diverge (although this is no easy task); and
  3. Fully-Franked dividends are a Fantastic Foundation.

A core part of my investment strategy is the Focus on Fully Franked dividends – as well as the Fantastic tax benefits they provide (of course, this might be impacted slightly if the Government is successful with its $59 billion tax grab on Franking cash refunds).

I’m just about to pull the trigger on Fund Investment #7, but before I do, let’s look at the Fully Franked dividend potential of the Fund so far…

Upcoming March Dividends

Most Australian shares pay dividends only twice a year – around March / April, and again in September / October.

Of our 6 Investments so far, 5 of them will catch the March / April round of dividends. Woodside Petroleum will have to wait a few months for its maiden dividend contribution to the Fund.

Let’s have a look at what is coming our way in March…