Dividend Investing : study of companies that were formerly dividend aristocrats

Abstract

The purpose of this thesis is to provide an overview of dividends as an investment target. The thesis also presents a unique group of dividend aristocrats that have been able to increase their dividends year after year. The actual research examines 10 companies that were previously dividend aristocrats but have since lost this prestigious status. The research examines the period preceding the removal of dividend aristocrats from the list to determine whether there is anything that could predict their removal from the list. The research also examines whether the company has subsequently been a good investment. Finally, it is possible to analyze whether these companies have anything in common. A general theoretical basis for dividend investing has been created using literature and other reliable sources. Company data is collected from their own websites, news reports, and other sources such as Morningstar, from which the companies' dividend histories were obtained. The study showed that most of the companies had been good investment targets even though they were no longer dividend aristocrats. The removal of companies from the list of dividend aristocrats was preceded by excessively high dividend yields, company spin offs, and financial challenges.