Income investors can count on these dividend aristocrat stocks.
When a company can avoid cutting its dividend even during recessions and economic crises, investors know it’s a reliable investment. However, there’s a special breed of dividend stock that takes reliability, consistency and dependability to another level. The “dividend aristocrats” are a group of 65 S&P 500 stocks that have somehow managed to raise their dividend payments each year for at least 25 consecutive years. For decades, each dividend aristocrat has rewarded its investors for loyalty and demonstrated its commitment to shareholder returns. Here are nine of the best dividend aristocrat stocks to buy now, according to CFRA analysts.
Dover Corp. (ticker: DOV)
Dover is an industrial machinery company that produces specialized industrial products and manufacturing equipment. Dover has also raised its dividend for 67 consecutive years, a longer track record of dividend hikes than any other dividend aristocrat. Analyst Jonathan Sakraida says Dover’s decision to shift its portfolio to higher-margin, less capital-intensive products has improved profitability. He says cost-cutting measures will help drive long-term earnings growth for Dover and help the stock outperform peers. He projects 8% revenue growth in 2023. Dover pays a 1.4% dividend. CFRA has a “buy” rating and $155 price target for DOV stock, which closed at $143.49 on Dec. 2.
Procter & Gamble Co. (PG)
Procter & Gamble produces household products and owns popular brands such as Pampers, Tide and Bounty. Analyst Ana Garcia says Procter & Gamble was generating impressive cash flow and solid sales growth even before the COVID-19 pandemic, but its best-in-class supply chain and significant pricing leverage has helped it maintain its competitive advantages in the past couple of years. Garcia says the company is well positioned to gain market share in an inflationary environment. Procter & Gamble has a 2.4% dividend and has raised its payout for 66 consecutive years. CFRA has a “buy” rating and $163 price target for PG stock, which closed at $150.61 on Dec. 2.
Coca-Cola Co. (KO)
Coca-Cola is one of the world’s most valuable brands and is the largest manufacturer of soft drinks and syrups. Analyst Garrett Nelson says Coca-Cola lagged competitor PepsiCo Inc. (PEP) in 2020 and 2021, but Coca-Cola has outperformed both PepsiCo and the S&P 500 in 2022 and has a positive outlook for 2023. Nelson says a resolution to Coca-Cola’s ongoing $12 billion tax dispute with the Internal Revenue Service could be a bullish catalyst. Coca-Cola has a 2.7% dividend and has raised its payout for 60 consecutive years. CFRA has a “buy” rating and $68 price target for KO stock, which closed at $64.35 on Dec. 2.
Federal Realty Investment Trust (FRT)
Federal Realty Investment Trust is a retail real estate investment trust, or REIT, that owns and manages community and neighborhood shopping centers. Federal Realty has a 4% dividend, the highest of any stock on this list. Analyst Michael Elliott says he is bullish on the REIT’s management team and asset portfolio and says the post-pandemic U.S. economic recovery has benefited tenants and increased lease demand. Federal Realty reported impressive 92.1% occupancy in the third quarter. Federal Realty has raised its payout for 55 consecutive years. CFRA has a “buy” rating and $118 price target for FRT stock, which closed at $109.44 on Dec. 2.
W.W. Grainger Inc. (GWW)
W.W. Grainger provides industrial and commercial supplies, such as electric motors, hand tools and light bulbs. W.W. Grainger has demonstrated its value as a defensive investment in 2022. On a total return basis, which includes the impact of dividends, the stock is up 17.7% year to date through Dec. 2. Sakraida says W.W. Grainger has key competitive advantages, including a global supplier network, an efficient inventory management system and a positive reputation among its customers. The dividend aristocrat has a 1.1% dividend and has raised its payout for 51 consecutive years. CFRA has a “buy” rating and $608 price target for GWW stock, which closed at $602.08 on Dec. 2.
Abbott Laboratories (ABT)
Abbott Laboratories is a diversified global health care company that produces branded generic pharmaceuticals, medical devices and other nutritional and diagnostic products. Analyst Colin Scarola says Abbott’s innovative, diversified business model and strong balance sheet will help the stock outperform peers in the long term. In 2023, Scarola says investors should anticipate falling COVID-19 testing demand will drag Abbott’s sales down 4%, but he projects earnings and revenue will rebound to new highs in 2024. Abbott has a 1.7% dividend and has raised its payout for 50 consecutive years. CFRA has a “buy” rating and $110 price target for ABT stock, which closed at $108.09 on Dec. 2.
PepsiCo Inc. (PEP)
PepsiCo is a global beverage and snack company. Nelson says PepsiCo is a defensive, blue-chip stock with a strong balance sheet and high earnings stability. He says the company also owns valuable brands, such as Frito-Lay, Gatorade and Mountain Dew. Brand loyalty allows PepsiCo to successfully pass through rising costs to consumers via price hikes in an inflationary environment. Nelson says Frito-Lay and international sales will be PepsiCo’s largest growth drivers. PepsiCo pays a 2.5% dividend yield and has raised its payout for 49 consecutive years. CFRA has a “strong buy” rating and $190 price target for PEP stock, which closed at $185.69 on Dec. 2.
S&P Global Inc. (SPGI)
S&P Global provides credit ratings, benchmarks, research and analytics for investors and other market participants. Analyst Alexander Yokum says investors don’t fully appreciate how much S&P Global’s acquisition of IHS Markit has improved the company’s diversification and reduced the volatility of its business model. Yokum says S&P Global’s transition to a recurring-revenue model will serve it well, but it could face near-term headwinds in its ratings segment. S&P Global has a 0.9% dividend and has raised its payout for 49 consecutive years. CFRA has a “buy” rating and $400 price target for SPGI stock, which closed at $359.80 on Dec. 2.
Walmart Inc. (WMT)
With a chain of nearly 11,000 stores, Walmart is the world’s largest discount retailer. Analyst Arun Sundaram says excess inventories and cost inflation have been headwinds for Walmart in 2022. However, Sundaram says Walmart’s omnichannel business model and innovative growth initiatives, such as Walmart Connect and Walmart+, have positioned the stock for brighter days ahead. He projects higher prices and market share gains will drive 6.5% sales growth in fiscal 2023. Walmart has a 1.5% dividend and has raised its payout for 49 consecutive years. CFRA has a “buy” rating and $160 price target for WMT stock, which closed at $153.22 on Dec. 2.
9 best dividend aristocrat stocks to buy now:
Dover Corp. (DOV) Procter & Gamble Co. (PG) Coca-Cola Co. (KO) Federal Realty Investment Trust (FRT) W.W. Grainger Inc. (GWW) Abbott Laboratories (ABT) PepsiCo Inc. (PEP) S&P Global Inc. (SPGI) Walmart Inc. (WMT)
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Update 12/05/22: This story was published at an earlier date and has been updated with new information.