Dividend Contenders: Better Choice Than Dividend Aristocrats?

In a recent article on the Dividend Aristocrats, I found that through back-testing the current list of Aristocrats led to finding that their historical outperformance seems to have disappeared. Once lauded as an easy way to outperform benchmarks, those Aristocrats have not meaningfully outperformed the S&P 500 Index (NYSEARCA: SPY) over the past three years. Some chalked this up to the bull market we are in, but since that article's publication, we've experienced the worst opening start to January in the market's history, and NOBL (the Dividend Aristocrat ETF) has not had an inspiring start to 2016, outperforming SPY by just a hair over 1% at time of this writing. This does little to inspire confidence in the strategy.
Many contributors echoed my sentiments and thought that perhaps the Aristocrat trade was becoming too crowded, a premise that I largely agreed with. However, what if we shift to David Fish (an author I highly recommend following here on Seeking Alpha) and his Dividend Contenders list?
These companies have raised dividends for between 10 and 24 consecutive years, a staging ground before hopefully moving to his Dividend Champions list (analogous to the Dividend Aristocrats). While there are differences between these two lists, performance for the Champions has historically run similar to the Dividend Aristocrats.
Contenders are less followed by mainstream investors, and there are more diverse options to choose from within its ranks. In this... Read more