Stocks with more than 25 years of dividend increases.
Dividend aristocrats are unique stocks that have raised their dividend payments at least once per year dating back 25 years. For those with a short memory who are fixated on recent COVID-19 disruptions, that means these are companies that increased their payouts across a host of challenges, including the dot-com bubble; the uncertainty in the wake of Sept. 11, 2001; and the 2008 financial crisis. For a firm to keep its dividend constantly growing amid everything we’ve seen over 25 years is no mean feat — and can provide tremendous peace of mind for shareholders. The following nine names are all dividend aristocrats to buy that stand out in the current environment.
AbbVie Inc. (ticker: ABBV)
AbbVie is as reliable as income investments come, with a track record of 49 consecutive years of dividend increases — after you account for its history as Abbott Laboratories (ABT) before a 2013 spinoff, of course. It’s also paying out a juicy yield right now that’s more than three times the current S&P 500 dividend yield. Shares have surged more than 26% in the last three months thanks to strong financial performance and improved guidance. But the real appeal to income investors, of course, are the generous and growing paydays from this dividend aristocrat.
One-year total return, which includes dividends: 27.9%
Dividend yield: 4.1%
Albemarle Corp. (ALB)
In February of last year, Albemarle hiked its dividend a hair from 38.5 cents to 39 cents per share quarterly. That’s not a massive increase, and it didn’t raise the yield of ALB to a much higher level. But Albemarle has a lot to offer investors this year based on its unique business that focuses on specialty chemicals supporting both clean energy technologies and pharmaceuticals. Most interestingly, ALB is a major player in lithium batteries used for electric vehicles. In large part because of this business line, analysts expect revenue to jump about 20% in 2022 and shares have surged more than 30% in the last six months compared to a modest 8% for the S&P 500 index in the same period. And given its cycle of announcements early in the year, you may want to buy into this dividend aristocrat soon, before its 2022 payday is increased.
One-year total return: 34.6%
Dividend yield: 0.65%
Archer-Daniels-Midland Co. (ADM)
Next on the list of dividend aristocrats to buy now is ADM, one of the biggest agricultural players on the planet; it operates a business that spans various grains, vegetable oils, refined food products and more. The company was founded in 1902, and has a rich history of dividend growth including more than 350 consecutive quarters of payments and 48 straight years of increases after its latest boost back at the beginning of 2021. After inflationary pressures have been lifting prices and increasing margins, analysts expect 2022 revenue growth of about 30% over 2021. That bodes well for share prices after an already impressive run of nearly 40% for ADM stock in the last 12 months.
One-year total return: 39.3%
Dividend yield: 2.1%
Exxon Mobil Corp. (XOM)
One of the top-performing S&P 500 stocks in 2021 was Exxon, which rode two important megatrends: a strong recovery in demand thanks to the re-opening of the global economy, and rising crude oil prices that jumped from a low of around $50 to start the year to roughly $85 per barrel presently. As a result, share prices have climbed about 50% in the last 12 months. But more importantly from an income perspective is the fact that Exxon has increased its payouts for 39 straight years and currently yields about four times more than the typical stock in the S&P index.
One-year total return: 55.9%
Dividend yield: 4.9%
Kimberly-Clark Corp. (KMB)
Paper products giant Kimberly-Clark marked its 49th consecutive year of dividend increases after its January 2021 distribution. There’s no secret as to why KMB is so reliable, as it makes everything from Huggies diapers to Kleenex tissues and Cottonelle toilet paper. These consumer staples are in constant demand regardless of the broader economic environment, and that means KMB shareholders can depend on stable sales patterns regardless of the macroeconomic picture. Share prices are a bit sleepy, but this $48 billion dividend aristocrat definitely delivers when it comes to income potential and future payout growth.
One-year total return: 12.4%
Dividend yield: 3.2%
Nucor Corp. (NUE)
Nucor is a $33 billion steel company that has had a heck of a year amid inflationary pressures that have boosted the price for many commodities and raw materials. Furthermore, a global economic recovery has created strong demand for everything from plate steel to concrete reinforcement products to steel tubing. In December, NUE increased its dividend for the 49th consecutive year, and it is riding 195 consecutive quarterly dividend payments. Shares have roughly doubled in the last 12 months and continue to show strong momentum at the beginning of 2022.
One-year total return: 105.9%
Dividend yield: 1.7%
Old Republic International Corp. (ORI)
Not all the top dividend aristocrats to buy are household names. Old Republic is one of the most reliable income investments out there after raising payouts at least once per year for 40 years running. Its general insurance segment includes automobile, aviation, general liability and travel insurance. It also operates a sizable title insurance segment that offers lenders and owners title policies to cover real estate transactions. The rising interest rate environment adds a sweetener to ORI, too, as insurance stocks typically invest the “float” of their finances in low-risk Treasury markets to put idle cash to use between premium payment and claim drawdown. Share prices are up more than 40% in the last 12 months to outperform the broader market on top of a generous and growing yield.
One-year total return: 53.6%
Dividend yield: 3.4%
Sysco Corp. (SYY)
Sysco is a $41 billion food service giant that was hit fairly hard by the pandemic, but today shares are back to early 2020 levels. The pandemic brutalized its global business focused on supplying frozen foods, produce, beverages and other items to restaurants and institutional kitchens. With the economy beginning to normalize, investors have been encouraged by predictions of more than 25% revenue growth in 2022. Sysco has paid a dividend every quarter since the early ’70s, and has increased its payout once per year since then for a tremendous track record of more than 50 years of consecutive increases.
One-year total return: 5.1%
Dividend yield: 2.4%
West Pharmaceutical Services Inc. (WST)
West is a nearly 100-year-old operation and is a unique play in 2022 thanks to its business model of designing and manufacturing systems for injectable drugs. Not only is this lucrative during the age of COVID-19, but it’s also a great long-term business as health care costs reliably rise year after year and people continue to need health care services during economic downturns. West just raised its quarterly payout from 17 cents to 18 cents per share in November, marking the 29th consecutive year of increases for this dividend aristocrat. The payout is admittedly fairly meager at present from a yield perspective and the smallest on this list, but shares have outperformed nicely over the last year and are looking up in 2022. The track record of dividend increases bodes very well for future payouts.
One-year total return: 34.9%
Dividend yield: 0.18%
9 dividend aristocrats to buy now:
— AbbVie Inc. (ABBV)
— Albemarle Corp. (ALB)
— Archer-Daniels-Midland Co. (ADM)
— Exxon Mobil Corp. (XOM)
— Kimberly-Clark Corp. (KMB)
— Nucor Corp. (NUE)
— Old Republic International Corp. (ORI)
— Sysco Corp. (SYY)
— West Pharmaceutical Services Inc. (WST)
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