Australian Dividend Aristocrats on the ASX | Capitalistic Man (2023)

Australian companies have a history of being some of the best dividend payers in the world in part due to the Australian Government’s dividend imputation system, where Australian resident investors receive a tax credit in recognition that the company paying the dividend has already paid Australian corporate tax on that dividend (currently 30%). This incentivises companies to pay out dividends rather than buy back shares due to fully franked dividends being highly tax efficient for investors. For example, BHP has a dual listing structure so that BHP can distribute franked dividends only to Australian investors rather than distributing them to overseas investors who can’t use them. This has meant that BHP Group Limited (the Australian parent company) has historically traded at slightly higher valuations than BHP Group Plc (the UK parent company).

Compared to other countries, Australian investors tend to receive a higher proportion of their investment return in the form of dividends.

Australian Dividend Aristocrats on the ASX | Capitalistic Man (2)

Interestingly, when we look over a longer period capital gains make up a much larger percentage of total returns. This can in part be explained by the fact that franking credits were only introduced by the Hawke-Keating Labor Government in 1987 and refunding of excess franking credits were only introduced in 2000.

Australian Dividend Aristocrats on the ASX | Capitalistic Man (3)

Despite Australia’s dividend imputation system, Australia has no dividend aristocrats. A dividend aristocrat is a company who has continually raised its dividend every year for at least 25 years. These companies are typically associated with old American companies such as Colgate-Palmolive, 3M and Caterpillar. Australia does not have any dividend aristocrats which meet this strict definition, but if we lessen the requirement to at least 25 years of rising or stable dividends then Australia has four companies which meet this requirement.

This analysis relies heavily on the brilliant analysis conducted by ‘Frankie’ at Fully Franked Finance. Unfortunately, at the time of writing this article the Fully Franked Finance website is no longer active. Luckily, an archived version of their Australian Dividend Aristocrats article can be accessed using the Wayback Machine. My article aims to build on the Fully Franked Finance article. I highly recommend reading the Fully Franked Finance article before reading this one.

This article will give an overview of the best dividend paying companies on the ASX and their dividend streaks. I will also discuss their performance at the end of this article. This article should give you some ideas on which companies may warrant further research.

A Note on the Data

Before I start, I must make a note on the data used to undertake this analysis.

  1. This data is for ordinary cash dividends only (i.e. no special dividends);
  2. The data is usually adjusted for any bonus issues, splits, rights issues etc.
  3. The dividends are measured in the company’s reporting currency;
  4. The data is for the financial year 2019 end;
  5. Franking is not considered;
  6. There will be errors in the data due to information from the pre-internet era being harder to find.

I sourced this information from Morningstar DatAnalysis, company financials, IBISWorld and the Australian Dividend Aristocrats article which sourced its information from S&P CapitalIQ and other sources.

Data for during and after the 1980s is very difficult to find, with different sources having different information. For example, Washington H. Soul Pattinson has paid a dividend every year since 1903 (as per their website) but finding information about its per share dividends is difficult since I could not find annual reports for many years in the 1980s. There have also been many bonus issues/stock splits over the years which complicates things. Even within Morningstar DatAnalysis there is conflicting information around the value of some of the dividends paid in the 1980s and 1990s, probably due to the large of number of bonus issues during the period (shares outstanding increased from ≈ 14.77 million to ≈ 238.64 million in 2002). The same can be said for many of the old companies in this list. In this article I used the figure derived by Fully Franked Finance (I just added the 2018 and 2019 dividends).

Some companies are very outspoken about their long dividend history (in recent years Brickworks has had a presentation slide dedicated to it each year) whereas others only mention dividends paid in the last 5 to 10 years (ARB for example). Since I could not find reliable information for some of the older companies, this list is biased towards to those companies who provide information about their historical dividend payments in their latest investor presentations/annual reports. For example, I suspect that Soul Pattinson probably has a longer dividend streak than is listed below since they have a very similar asset exposure to Brickworks due the cross holding, yet they have very different dividend streaks (43 years for Brickworks versus 24 years for Soul Pattinson). Thus, for some companies the dividend streaks may be understated.

There will likely be errors. The main point of this article is to identify potential investment ideas, not to determine if a particular company’s dividend has increased in 23 vs 26 years; the point is that if a company has paid a stable dividend 23 or 26 years the company is a solid dividend payer regardless of the specifics.

The Best Dividend Payers on the ASX

Australian Dividend Aristocrats on the ASX | Capitalistic Man (4)

From the picture above we can see some interesting trends. Five of the 22 best dividend paying companies are old conservative LICs (Australian United Investment, Diversified United Investment, Whitefield, Australian Foundation Investment Company and Carlton Investments). This is likely due to how diversified they are, their low fees and their focus on paying a consistent income stream.

(Video) Dividend Aristocrats for Australia | VectorVest Australia

Sector/IndustryCompanies in Sector/Industry
LICsAustralian United Investment, Diversified United Investment, Whitefield, Australian Foundation Investment Company and Carlton Investments
HealthcareCSL, Sonic Healthcare, Ramsay Healthcare and Fisher & Paykel Healthcare
Diversified Non-LICBrickworks and Washington H. Soul Pattinson
PropertyUnited Overseas Australia and Tamawood
RetailPremier Investments and Super Retail Group
Hotels/EntertainmentEvent Hospitality and Entertainment and Transmetro Corporation
Auto PartsARB Corporation
RestaurantsDomino’s Pizza Enterprises
UtilitiesAPA Group

Australian Dividend Aristocrats on the ASX | Capitalistic Man (5)

Brickworks is the clear standout. This performance is likely due to Brickworks diversification strategy and high-quality building products business. Brickworks and Washington H. Soul Pattinson entered a share-swap in 1969 meaning that Brickworks owns shares in Soul Pattinson and Soul Pattinson owns shares in Brickworks. This gives both companies protection from takeovers and more importantly enables both companies to invest for the long term. A good example of this is Brickworks deciding to hold onto its extensive land portfolio around Western Sydney. A short term focussed manager would have sold this land decades ago, most likely to a farmer for pennies on the dollar. Brickworks didn’t do this and now that land is Brickworks’ industrial property portfolio. As a result of the share swap Brickworks is shielded from the downturns in the property cycle as Soul Pattinson’s dividend underpins Brickworks ability to pay stable and growing dividends through the cycle.

Four of the 22 companies in the list are healthcare companies. Blood products company CSL has the second longest streak at 27 years, while pathology lab operator Sonic Healthcare has never reduced its dividend in 26 years. Hospital operator Ramsay Healthcare has a 22-year streak; the healthcare company with the lowest streak is respiratory product manufacturer Fisher & Paykel with a 19-year streak. The strong representation from the healthcare sector is likely due to the healthcare sector being fairly recession resistant. Additionally, all these businesses are successful internationally.

The smallest company in this list is Transmetro Corporation with a market capitalisation of just $16 million, making it the 1572nd largest company on the ASX. The largest is CSL who is the second largest company on the ASX.

One of the deciding factors for a company to be on this list is its ability to resist takeover attempts. Companies such as Brickworks, Soul Pattinson, AUI, DUI, AFI and CSL appear high on the list because they have the ability to resist takeover attempts or are too large to be a possible acquisition target for most companies. Brickworks and Soul Pattinson have a cross-shareholding arrangement protecting them from hostile takeovers; AUI, DUI and AFIC are all large LICs making a takeover difficult; and CSL is currently the second largest company on the ASX. These factors all contribute to a company’s ability to pay stable and rising dividends over the long term as an independent entity. I will now give an overview of each company before discussing their performance.

Brickworks Limited (BKW) 43-year streak

Brickworks Limited has four divisions: Building Products Australia, Building Products North America, Land and Development, and Investments. The Building Products Australia division includes Austral Bricks, Austral Masonry, Bristile Roofing, Southern Cross Cement and Austral Precast. Austral Bricks is the largest brick manufacturer in Australia, Bristile Roofing is the second largest roofing business in Australia, Austral Precast is a major precast concrete panel manufacturer and Austral Masonry is the second largest masonry company in Australia. Southern Cross cement owns an import terminal which is used to import cement for the Austral Masonry and Bristile Roofing businesses.

Building Products North America owns Glen-Gery, the fourth largest brick manufacturer in the United States, which has a dominant presence in the North-East of the country.

The Property and Development division seeks to maximise value from land which is surplus to the company’s needs. This division includes an industrial property trust, which is a joint venture between Brickworks and Goodman Group.

The final division consists of Brickworks’ investment in Washington H. Soul Pattinson, a diversified investment house. Soul Pattinson’s major investments are TPG Telecom, New Hope Corporation and Brickworks. Brickworks and Soul Pattinson have a cross-shareholding arrangement where Brickworks owns 39.4% of Soul Pattinson and Soul Pattinson owns 43.9% of Brickworks. This provides Brickworks with a stable and growing source of dividends across the construction cycle. The Investments segment is the most substantial by asset value, with the property division being the second most important. Surprisingly, for a company called Brickworks brick manufacturing is actually a very small part of the business. This diversification is why Brickworks has been able to consistently pay dividends. I have done analysis of Brickworks which can be read here.

ARB Limited (ARB) 27-year streak

ARB Limited designs, manufacturers, imports, distributes and retails four-wheel drive components and accessories ranging from canopies and bull bars to air-locking rear differentials and leaf springs. Its largest market are large 4WDs such as the Toyota Land Cruiser and the Nissan Patrol, used by recreational drivers, mining companies, aid agencies and military customers.

ARB exports its products globally and domestically, although domestic sales in the Australian aftermarket segment accounts for most of the company’s revenue. The export segment is growing faster than the domestic segment and is expected to account for a larger portion of revenue in the coming years. ARB designs and manufactures their products in Australia and Thailand. The company’s competitive advantage is the ARB brand (well known amongst 4WD enthusiasts) and their design capability. At the time of writing ARB has a net cash balance sheet.

CSL Limited (CSL) 27-year streak

CSL Limited is the second largest company on the ASX and the world’s fifth largest biotechnology company. The company derives its revenue from the research, development, manufacture, marketing and distribution of biopharmaceutical and allied products. CSL employs over 25,000 people across more than 35 countries with production facilities across Australia, New Zealand, the United States, Europe, Asia and South America. CSL also has over 230 plasma collection centres around the world. The company’s two main business units are CSL Behring and Seqirus.

The CSL Behring business is a global leader in developing and delivering high quality medicines to treat diseases using the latest recombinant and plasma-derived technologies (i.e. blood derived treatments). CSL Behring develops solutions for treating rare and serious diseases such as haemophilia, von Willebrand disease, primary immune deficiencies, chronic inflammatory demyelinating polyneuropathy, hereditary angioedema and inherited respiratory disease. At present the United States supplies much of the world’s plasma, primarily because blood donors can be paid for donating. Within the global plasma industry, CSL Behring is widely regarded as the best in the world. CSL Behring accounts for 85% of CSL’s revenue.

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Seqirus is a leading provider of in-licensed vaccines and specialty pharmaceuticals throughout the world, particularly for influenza related products. Seqirus is also the world’s only supplier of a unique range of products made in the national interest for the Australian Government, including antivenoms and Q fever vaccine.

CSL is one of Australia’s most successful companies. Originally a government-owned and run entity, CSL was privatised and listed on the ASX in 1994. Corrected for share price splits, the IPO price was 76.7c per share, compared to the current share price of $280 it is fair to say that many people have made a lot of money from CSL.

Australian United Investment Company Limited (AUI) 26-year streak

Australian United Investment Company Limited (AUI) is a conservative listed investment company (LIC) which invests in a diversified portfolio of Australian equities for the medium to long term. The company focuses on investing in companies which have the potential to provide a growing stream of income and capital appreciation. AUI has a very lean operating model which has the effect of reducing management fees. AUI was listed on the ASX in 1974. I have written an article on AUI which can be read here.

Sonic Healthcare Limited (SHL) 26-year streak

Sonic Healthcare is a provider of medical diagnostic and administrative services. The company employs approximately 35,000 people and operates in Australia, New Zealand, Germany, Switzerland, the UK, Belgium, Ireland and the United States. With Sonic Healthcare’s recent acquisitions in the United States and Germany, Sonic Healthcare is now the third largest pathology company in the world. The company is the number one laboratory medicine player in Australia, Germany, Switzerland and the UK and is the number three player in the United States. Australia is Sonic Healthcare’s largest market, with the United States coming in second and Germany coming third.

Diversified United Investment Company Limited (DUI) 24-year streak

DUI is another conservative LIC which provides investors with low-cost access to a diversified portfolio of primarily large cap ASX stocks with up to 20% of the portfolio consisting of international equities. DUI is the sister company of AUI.

Washington H. Soul Pattinson Limited (SOL) 24-year streak

Washington H. Soul Pattinson (Soul Pattinson) is the second-oldest company listed on the ASX. Soul Pattinson’s history dates to 1872 when Caleb Soul and his son Washington opened a pharmacy in Sydney. The company listed on the stock exchange in 1903. Since then Soul Pattinson has become a diversified investment house, with pharmaceutical operations now only accounting for a small proportion of the company’s assets. Soul Pattinson’s major investments are TPG Telecom, New Hope Corporation and Brickworks. As described above, Soul Pattinson and Brickworks have a cross-shareholding which was established in 1969.

In addition to the company’s three major investments, Soul Pattinson has a substantial portfolio of financial services companies, pharmaceutical interests and owns Round Oak Minerals – a copper and gold mining and exploration company. Soul Pattinson has paid a dividend every year since the company’s listing in 1903, including during the Great Depression. The company is primarily controlled by the descendants of the company’s founders.

Only two companies in the All Ordinaries Index have increased their ordinary dividend every year since 2000 – Washington H. Soul Pattinson and Ramsay Healthcare. The compound annual growth rate of Soul Pattinson’s ordinary dividends over the last 20 years is 10.8%.

Whitefield Limited (WHF) 23-year streak

Whitefield is another LIC. Whitefield aims to provide investors with the potential for capital growth and regular franked income through a diversified portfolio of ASX listed industrial shares (i.e. excluding mining companies). When selecting investments Whitefield emphasises quality of return, reliability and cost efficiency. Whitefield has been listed since 1923.

Australian Foundation Investment Company Limited (AFI) 22-year streak

Australian Foundation Investment Company (AFIC) is Australia’s largest LIC and has been around since 1928. AFIC invests in Australian and New Zealand businesses. AFIC aims to provide shareholders with attractive investment returns through access to a growing stream of fully franked dividends and growth in capital investment. AFIC is another conservative LIC which generally performs in line with the ASX 200 index. The main difference is that AFIC holds onto some of its cash so that it can continue paying a steady stream of dividends during recessions.

Ramsay Healthcare Limited (RHC) 22-year streak

Ramsay Healthcare is a multinational operator of over 500 private hospitals across Australia, the United Kingdom, France, Sweden, Norway, Denmark, Germany, Indonesia, Malaysia, Hong Kong and Italy. The company treats 8.5 million patients annually and employs 80,000 people. In Scandinavia, France and Australia Ramsay Healthcare has a market leading position. The company has been listed on the ASX since 1997.

Over the years Ramsay has made some big acquisitions. In November 2007 Ramsay acquired Capio UK and its portfolio of hospitals in England and made several acquisitions in France. In 2010 the company purchased 57% of Group Proclif SAS and in 2014 Ramsay acquired a controlling stake in Générale de Santé. Ramsay merged the Group Proclif and Générale de Santé businesses into a single entity. This merged entity then bought nine more hospitals in Lille, France in 2015. Then in 2018 Ramsay Générale de Santé acquired Capio AB, a European healthcare provider operating in Sweden, Denmark, France and Germany. Ramsay has also expanded into Asia. In 2013 Ramsay entered into a joint venture with Sime Darby Berhad of Malaysia. This joint venture combined Ramsay’s hospitals in Indonesia with Sime Darby’s hospitals in Malaysia.

United Overseas Australia Limited (UOS) 19-year streak

Note: on further research UOS decreased their dividend in the 2018/2019 financial year so technically should not be on this list. I have kept it in the list since it is such an interesting company.

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United Overseas Australia Limited is a an ASX-listed Malaysian property developer. The company is largely unknown to most Australian investors but has one of Australia’s most impressive investment records which even rivals market darling CSL! Not much has been written about this company by analysts. Perhaps the best summary I have found of this company is from small-caps fund manager EGP Capital. Below is an extract from their FY2015 Performance Letter which gives on overview of UOS when explaining their investment thesis (the full letter can be read here).

In 1988, UOS launched an IPO, raising $2.62 million of equity including the founders’ contributions; they were initially called United Overseas Securities Limited, becoming United Overseas Australia in 1990. CS Kong and Jim Kong are the founding shareholders, and own over 70% of UOS stock. CS and Jim are unrelated, they just happen to share a surname. CEO, CS Kong was educated at Curtin University in Perth and fellow founder Jim Kong was educated at University of Western Australia.

The less mature Malaysian stock exchange at that point probably assisted the decision to list in Australia and UOS may have expected to do more investing/developing in Australian than they have so far done. So Australia came to be the destination where the capital that created United Overseas was raised. UOS initially traded on the ‘second board’ of the ASX, where the market tiddlers played in the 1980’s and early 1990’s.

They began by building a factory that manufactured latex products, but in 1990, issued some shares to acquire the assets of Hoong Ken Housing Sdn Bhd, which had 6.5 acres of land in Setapak, Kuala Lumpur and approval to undertake a $15m development on the site. In 1990, there was another small issuance of stock for an acquisition and finally in June 1990, a swathe of options was converted, injecting the last external capital the company would ever take (saving a small issuance as a consequence of the 2007 Singapore dual-listing). In 1992, having grown the issued capital to $5.6m, they commenced quotation on the main board of the ASX, where they remain listed until this day.

UOS has never since taken another penny of shareholder capital they didn’t first create themselves, with the only ‘new’ capital coming via the Dividend Reinvestment Plan (DRP)… By way of comparison, had you purchased Berkshire Hathaway shares in 1965, when Warren Buffet took control, in the first 27 years, the book value per share grew by 23.9% annually. UOS has not fallen meaningfully short of this mark to date (0.4% annually).

You may well be thinking “but buying shares is a forward looking exercise…” Well despite what all the literature, and your financial advisors may tell you about ‘the past being no indicator of future results’, much experience shows, particularly when evaluating managements, the past is among your most valuable indicators of how things are likely to be in the future. The buyer of Berkshire Hathaway at $9,050 in 1992, after Warren Buffett already had 27 years of Berkshire Hathaway road behind him did ok, though admittedly at a slowing rate of return, to the tune of:

    • 5 year return – 30.4% annually – A-share price $34,100
    • 10 year return – 23.6% annually – A-share price $75,600
    • 15 year return – 18.1% annually – A-share price $109,990
    • 23 year return – 15.0% annually – A-share price $226,000

In 1992, Buffett was 62 years old. CS and Jim Kong are 73 and 62 respectively (2014 UOS annual report). If they have good health, and decide to stick at it, they will have sufficient time left to ensure their record continues to be among the best ever established.

If they want to compete with Buffett’s later record, they have a chance too. In 1992, Berkshire Hathaway was a conglomerate with a market capitalisation exceeding $10 billion. UOS is a laser-focused property developer/owner with a current market capitalisation of less than $700m and a huge cash war chest.

It beggars belief (to your author at least) that a company with a 27 year long track record of growing tangible shareholders’ equity at a rate exceeding 23% annually trades at a discount to book valuation, much less the 33 or 34% discount that it currently trades. In 1992, after 27 years of near 24% annual book value growth, Berkshire Hathaway traded at a meaningful premium to book valuation. That premium has averaged more than 30% over the last 23 years (even as the levels of return being generated slowed).

CS and Jim Kong between them control about 70% of the equity of UOS, so what they choose to do is what will happen when it comes to UOS. If you decide to join them as a shareholder, you need to make peace with that. If you join EGP, that peace has been made on your behalf!

If the example above isn’t the best indicator that efficient market hypothesis fails, and fails in investable scale, then I’d love to hear from anyone who thinks they have a better example.

Fisher & Paykel Healthcare Corporation Limited (FPH) 19-year streak

Fisher & Paykel Healthcare is a designer, manufacturer and marketer of products and systems for use in respiratory care, acute care, surgery and thetreatment of obstructive sleep apnea. The company is listed on the ASX and NZX. Fisher & Paykel manufactures two thirds of its products in New Zealand and the other third in Mexico. Fisher & Paykel has an enviable 19-year dividend streak.

APA Group Limited (APA) 19-year streak

APA Group is an energy infrastructure company which operates over 15,000 km of gas transmission pipelines, 29,000 km of gas mains and pipelines, 418 MW of gas-fired electricity generation, 150 MW of solar power generation capacity, 340 MW of wind power generation and has 12,000 tonnes of LNG storage capacity. The company has performed strongly, with APA Group’s market capitalisation increasing from $0.6 billion in 2000 to $13.4 billion in early 2020. The dividends have flowed strongly over this period resulting in an impressive 19-year dividend streak.

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Tamawood Limited (TWD) 18-year streak

Tamawood is a small Queensland-based contract home builder which also designs homes and trades solar power renewable energy certificates. The company has an 18-year dividend streak, which is impressive considering the cyclical nature of home building.

Carlton Investments Limited (CIN) 18-year streak

Carlton Investments is the fifth LIC on this list. Unlike all the other LICs in this list, Carlton Investments holds approximately 40% of its investment in one company – Event Hospitality and Entertainment Limited. This is not a coincidence – the billionaire Alan Rydge is chairman of both Carlton Invesments and Event Hospitality and Entertainment. Carlton Investments is effectively a publicly listed holding company of the Rydge family. Shares in Carlton are relatively illiquid and trade a discount to their pre-tax net asset value and occasionally even to their post-tax net asset value. The 60% of the company’s investments which are not invested in Event Hospitality are invested in companies such as NAB, Commonwealth Bank, Westpac, BHP and AGL Energy. Despite the company’s concentrated portfolio, Carlton Investments has an 18-year dividend streak.

Iress Limited (IRE) 18-year streak

IRESS Limited is a supplier of technology solutions for clients in the financial markets, wealth management, superannuation, insurance and mortgage sectors. IRESS has operations in Australia, New Zealand, the United Kingdom, South Africa, Canada, Africa and the Asia-Pacific region. The company’s revenue is primarily subscription-based and recurring. Iress has come along way from its beginnings in Melbourne in 1993 and now has a market capitalisation in excess of $2 billion. Iress hasn’t decreased their dividend in the last 18 years.

Event Hospitality and Entertainment Limited (EVT) 18-year streak

Event Hospitality and Entertainment Ltd is an Australian provider of entertainment, hospitality and leisure services. EVT has four main operating divisions – Entertainment, Hotels & Resorts, Entertainment Technology, and Property & investments. EVT conducts its operations in Australia and New Zealand. The three main business segments are operation and ownership of cinemas, hotels and the Threbo Ski Resort. The value of Event Hospitality and Entertainment is underpinned by its $2 billion property portfolio. Like its major shareholder Carlton Investments, the company has an 18-year dividend streak.

Premier Investments Limited (PMV) 17-year streak

Premier Investments owns several specialty retail fashion chains including Smiggle, Peter Alexander, Dotti, Portmans, Jacqui E, Just Jeans and Jay Jays. The company operates these chains throughout Australia, New Zealand, Asia and Europe. The company has performed very well over the last decade which is evident from their 17-year dividend streak.

Transmetro Corporation Limited (TCO) 15-year streak

Transmetro Corporation is by far the smallest company on this list with a market capitalisation of just under $17 million. The company operates a network of accommodation hotels and pubs in key locations and major cities across Australia including Sydney, Melbourne, Perth, Gladstone, Darwin and Groote Eylandt (Northern Territory). The company is controlled by John McEvoy who has served as Chairman and Managing Director of Transmetro Corporation since it was incorporated in 1979 (although Peter Frawley is Managing Director at present). Shares in Transmetro rarely change hands and as a result the company trades at a PE ratio of 3. The company has an impressive 15-year dividend streak.

Super Retail Group Limited (SUL) 15-year streak

Super Retail Group operates four retail brands: Supercheap Auto, Rebel, BCF and Macpac. Supercheap Auto is Australia and New Zealand’s largest specialty automotive parts and accessories retail business while BCF is the leading outdoor product retailer in Australia. Rebel is a retailer of sporting goods while Macpac is an outdoor apparel and equipment retailer in New Zealand and Australia. Super Retail Group has an impressive 15-year dividend streak.

Domino’s Pizza Enterprises Limited (DMP) 15-year streak

Domino’s Pizza Enterprises Limited operates Domino’s Pizza stores. The Company holds the exclusive master franchise rights for the Domino’s brand and network in Australia, New Zealand, France, Belgium, the Netherlands, Japan and the Principality of Monaco. Domino’s shareholders have been handsomely rewarded over the past few decades with Domino’s giving shareholders the highest total returns since 2001 of all companies in this article. The company has a 15-year dividend streak.

Challenger Limited (CGF) 15-year streak

Challenger Limited is an investment management firm focusing on providing Australians with financial security in retirement. Challenger operates two core investment businesses – the Life division and the Funds Management division. The life division focuses on providing retirees with annuities and the funds management division focuses on active funds management. The company has an impressive 15-year streak.

Total Returns 2001-2019 (source: Sharesight)

If an investor allocated $1000 to each of the 22 dividend aristocrats (i.e. $22,000 total) on 1 November 2001 (18 years from when I wrote this article) that investor would have made a total return of $199,487 as of November 2019 from an initial investment of $22,000. This return consists of $62,858 of dividends, including the benefit of franking credits, and $136,621 of capital gains. The portfolio’s current value would be $156,721, even after receiving $62,858 worth of dividends! In this example dividends are not reinvested, and personal income taxes are not considered.

The best performing company in the portfolio by total return was Domino’s Pizza, giving an investor $25,722 in total returns over the period. Number two was United Overseas Australia with $22,893. The best dividend payer over this period was Tamawood, paying out $6569 (inclusive of franking credits) over the 18-year period. United Overseas was second, paying out $5939 in dividends while Premier Investments paid out $5644 in dividends. CSL paid out the least dividends ($993 – almost equal to the initial $1000 investment) but this was more than made up for by the $16,158 in capital gains accumulated over the period. It should be noted that for all the high performing companies, capital gains constituted the majority of investor returns.

CompanyCurrent PriceQuantityValueCapital GainsDividendsReturn
Domino’s Pizza Enterprises$52.82434 $22,923.00 $22,110.00 $3,612.00 $25,722.00
United Overseas Australia$0.84519410 $16,401.00 $16,954.00 $5,939.00 $22,893.00
Ramsay Healthcare$72.98200 $14,596.00 $13,598.00 $3,317.00 $16,915.00
Premier Investments$19.64600 $11,784.00 $10,784.00 $5,644.00 $16,428.00
57 $16,158.00 $15,193.00 $993.49 $16,187.00
ARB Corporation$19.00535 $10,165.00 $9,170.00 $4,173.00 $13,343.00
Event Hospitality$13.37550 $7,353.00 $6,353.00 $4,934.00 $11,287.00
Tamawood$3.351253 $4,197.00 $3,197.00 $6,569.00 $9,767.00
Fisher & Paykel Healthcare$20.93405 $8,476.00 $7,482.00 $1,015.00 $8,497.00
Iress$13.01450 $5,854.00 $4,854.00 $3,329.00 $8,183.00
Soul Pattinson$22.32230 $5,133.00 $4,152.00 $2,490.00 $6,643.00
Super Retail Group$9.99423 $4,225.00 $3,226.00 $2,680.00 $5,906.00
APA Group$11.00399 $4,389.00 $3,465.00 $2,375.00 $5,841.29
Carlton Investments$32.28123 $3,970.00 $2,976.00 $2,532.00 $5,508.00
Sonic Healthcare$30.12116 $3,493.00 $2,497.00 $1,416.00 $3,914.00
Brickworks$18.85166 $3,129.00 $2,131.00 $1,662.00 $3,793.00
Challenger$8.14389 $3,166.00 $2,166.00 $1,557.00 $3,723.00
DUI$4.93550 $2,711.00 $1,711.00 $1,701.00 $3,412.00
Transmetro Corporation$1.211800 $2,169.00 $1,169.00 $2,082.00 $3,251.00
AUI$9.88254 $2,509.00 $1,511.00 $1,692.00 $3,204.00
AFIC$6.88344 $2,366.00 $1,368.00 $1,831.00 $3,200.00
$5.18300 $1,554.00 $554.00 $1,315.00 $1,870.00
Totals: $156,721.00 $136,621.00 $62,858.49 $199,487.29

The LICs were all generally near the bottom or middle of the pack in terms of returns, but this is to be expected given their highly diversified portfolio. Whitefield performed the worst. Given the level of risk an investor incurs, the performance of the LICs is very respectable. Brickworks and Soul Pattinson had better performance than the LICs and their total returns were somewhere in the middle of the pack.

Note: For companies not listed in November 2001 the earliest available trade date post-IPO was used as the purchase date. 2001 was chosen because this date maximises the number of companies available to measure (i.e. which were listed). Results may not add up to due rounding. The portfolio was never re-balanced. Based on information from Sharesight.

(Video) 6 Top Dividend ETFs In Australia (Make $1,000 Per Month of Passive Income)


Clearly anyone who invested and held onto these 22 companies would be happy with their performance. But investing is primarily a forward-looking exercise. The best question to ask is not what a company’s dividend streak has been, but what will a company’s dividend streak be in the future and what will the dividend growth rate be? These companies are a starting point.

It should be noted that there are many companies on the ASX who used to have long dividend streaks only to lose them due to mismanagement, a downturn in commodity prices, a recession or other company specific reasons. Santos, CIMIC Group, Elders and Woolworths have all had very respectable dividend streaks in the past. For interested readers, BKI Limited published an overview of the Australian dividend aristocrats in 2015 which can be read here. Note that Carindale Property Trust, Woolworths and Blackmores have all decreased their dividends since that article was written.


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