The Dividend Aristocrats are a group of 65 firms in the S&P 500 Index that have increased their dividends for 25 years or more. The Dividend Aristocrats are one of the greatest dividend stocks to buy and hold for the long term, according to us.
Walmart Inc. (WMT), a retail behemoth, is one of the more well-known Dividend Aristocrats. It is well-known not just for its strong brand and domination in the business, but also for its long dividend history.
By clicking on the link below, you can see a full downloadable spreadsheet of all 65 Dividend Aristocrats, as well as numerous key financial measures like price-to-earnings ratios and dividend yields:
What makes a dividend aristocrat?
A Dividend Aristocrat is a publicly traded corporation that has paid annual dividends to its shareholders for the past 25 years. The Dividend Aristocrat list presently has 65 companies on it. Every year, when a company reaches the 25-year mark, it is added to the list. If a firm fails to boost its dividend, it must wait another 25 years to be reinstated on the list. A corporation must be a Dividend Aristocrat if it is a member of the S&P 500, which is an index that measures the 500 largest publicly traded companies.
Dividend Aristocrats can be purchased through both traditional and online brokerage accounts. Dividend Aristocrats are also available as exchange-traded funds (ETFs). Rather than individual aristocrats, this ETF includes all of them.
Is a dividend aristocrat?
A dividend aristocrat is a stock in the S&P 500 index that not only pays a dividend every year, but also increases the size of the distribution every year.
If a corporation has continuously raised its dividends for at least the past 25 years, it is dubbed a dividend aristocrat. Some dividend aristocrats rank them based on additional variables including firm size and liquidity, such as having a market capitalization of more than $3 billion.
Is Kinder Morgan a dividend aristocrat?
This Aristocrat will almost certainly continue to provide a healthy dividend. The oil and gas transportation industry is expected to develop at a compound annual growth rate of 6% through 2026, owing to increased demand. Pipeline projects that were put on hold during the pandemic are now ramping up and running at full capacity. This could give Enbridge with revenue growth to fund dividends, as well as a boost to the stock price as it recovers from a 35% decline in 2020. The stock dropped from $42 to $27 before regaining momentum and reaching the $40 barrier once more.
Is JNJ a dividend aristocrat?
Atmos Energy plans to raise its adjusted earnings-per-share by 6% to 8% annually in the future as a result of customer additions and rate base expansion.
Atmos Energy has a number of competitive advantages that have helped it to maintain a strong dividend growth track record. For starters, As a regulated utility, Atmos Energy’s revenues are predictable, with a blended allowable return on equity of 9.8%. This ensures that the business remains profitable. For the past 18 years, Atmos Energy has increased its earnings-per-share.
Atmos Energy also has a competitive advantage in that, as a utility, it has a highly recession-resistant business model. Even in a severe recession, people will require utility services, which helps to maintain consistent demand and fuel the company’s dividend payout. The company’s assets include 72,000 miles of distribution and transmission pipes, 5,700 miles of interstate pipelines, and five storage facilities with a total working capacity of 46 billion cubic feet of natural gas.
Due to its regulated business model, substantial assets, and long-term growth, Atmos Energy appears to have a very high level of dividend safety. For the past 37 years, the corporation has grown its dividend.
The corporation aims for a 50 percent dividend payout ratio over the long run. This is a good long-term payout ratio since it ensures that adequate money is accessible for growth initiatives while still leaving enough cash flow for dividends.
Atmos Energy is on track, with projected EPS of $5.00 at the midpoint of its fiscal 2021 guidance and a current annualized dividend distribution of $2.50 per share.
The stock presently trades at a somewhat higher price-to-earnings ratio than our fair value estimate of 19. While today’s shares may be a little expensive, a premium multiple is usual for a good blue chip company. As a result, we do not expect a significant change in the valuation multiple in the near future.
At the same time, we estimate the company to expand its EPS by 6% annually over the next five years. When combined with the 2.5 percent dividend yield, total predicted returns over the following five years are in the range of 8% per year.
Dividend Aristocrat #3: Johnson & Johnson (JNJ)
With a market valuation of more than $400 billion, Johnson & Johnson is the largest healthcare corporation in the United States. Its enormous size is the consequence of years of steady expansion and a diverse business plan that includes major companies across the healthcare industry. J&J is a market leader in medical devices, pharmaceuticals, and consumer healthcare products.
In 2020, these companies will earn over $82 billion in revenue. Despite the fact that the coronavirus pandemic sent the US economy into recession, J&J’s income increased last year.
As the economy improves, the company will continue to thrive in 2021. J&J increased revenue by 8% to $22.3 billion in the first quarter of 2021. In comparison to the same quarter the previous year, adjusted earnings-per-share climbed by 13%.
Last quarter, J&J’s pharmaceutical division had a 10% increase in revenue, owing to a 19% increase in oncology revenue. Darzalex, which treats multiple myeloma, and Imbruvica, which treats lymphoma, are two of the company’s most important individual medications. J&J’s Immunology revenue grew 8% as Stelara continues to gain market share.
Meanwhile, sales in the medical device industry increased by 11%, led by a 30% increase in revenue from International Solutions.
Since the 1880s, J&J has been in operation. Its massive efforts in research and development have helped it become the industry leader in healthcare. To that goal, J&J spent more than $12 billion on research and development just last year. This funding aids the organization in developing innovative cures that will help it flourish in the future.
J&J’s investment has paid off, as the company currently has 28 platforms or specific goods with annual sales of more than $1 billion each. J&J has developed a huge business by offering such a diverse range of industry-leading products, as well as the diversification benefits of not being unduly vulnerable to any single product line.
2021 is expected to be another year of consistent growth for the corporation. Along with the first-quarter results, J&J boosted its full-year estimate, now expecting adjusted earnings per share of $9.42 to $9.57, up from $9.40 to $9.60 before. At the midpoint, J&J’s adjusted EPS would have increased by 18 percent year over year.
Over the next five years, we predict the company’s adjusted EPS to expand at a rate of 6% each year. Furthermore, today’s stock market does not appear to be inflated. J&J stock has a price-to-earnings ratio of 17.9 based on 2021 projection.
Although we believe this is slightly above fair value, which we estimate to be 17 times EPS, J&J stock is not unduly expensive. Premium firms rarely trade at discounted valuation multiples, and in the case of J&J, paying a modest premium for a blue-chip corporation is more than justifiable.
Despite the fact that a growing P/E multiple may not improve future returns, future EPS growth and the dividend yield (now at 2.5 percent) should generate high-single digit total returns. For the past 59 years, Johnson & Johnson has grown its dividend. Due to its long history of dividend growth, it is both a Dividend Aristocrat and a Dividend King.
Dividend Aristocrat #2: AbbVie Inc. (ABBV)
Abbott Laboratories (ABT) spun off AbbVie in 2013, and it is a pharmaceutical company. From 2013 to 2020, AbbVie claims to have grown yearly sales and adjusted earnings-per-share by 13.5 percent and 18.8 percent, respectively.
AbbVie will confront a huge challenge in the future. Humira, the company’s most important product, is already facing biosimilar competition in various international markets, including Europe, and its patent exclusivity in the United States will expire in 2023.
To refill its pipeline, AbbVie has aggressively invested in its own research and development infrastructure. In 2020, AbbVie’s R&D costs were $6.5 billion. It currently has various growth prospects to replace Humira, particularly in the immunology, hematology, and neuroscience therapeutic domains. These efforts are paying off, as AbbVie has a slew of new drugs on the way that might be blockbusters in the future. Skyrizi, which raised sales by 89 percent in the most recent quarter, and Rinvoq revenue more than doubled year over year, have both been great performers for AbbVie.
Then there’s AbbVie’s $63 billion acquisition of Allergan, which offers them access to the growing global aesthetics segment. Botox is Allergan’s most well-known product. In the first quarter, AbbVie’s aesthetics portfolio earned $1.1 billion in revenue, up 35% year over year.
AbbVie generated $13 billion in revenue in the first quarter of 2021, up 51% from the same quarter last year. Year-over-year, earnings-per-share increased by 22%. AbbVie increased its full-year guidance when it announced its first-quarter results, reflecting its improved prospects. For 2021, AbbVie now forecasts adjusted earnings-per-share in the $12.37 to $12.57 range. AbbVie’s adjusted EPS is forecast to jump 18 percent this year, putting the company on track for another year of significant growth in 2021.
Over the next five years, we predict the company to grow its earnings per share by 3%. This could turn out to be a very conservative forecast, which we attribute to the increased R&D spending required to keep the pipeline growing.
The stock is also attractively valued, in our opinion. Based on predicted 2021 adjusted EPS, AbbVie stock has a price-to-earnings ratio of just 9.3. For a highly profitable and growing company like AbbVie, this is a rather modest valuation multiple.
We believe AbbVie’s low value multiple reflects investor skepticism about the company’s prospects, particularly in relation to Humira. Nonetheless, we consider a price-to-earnings ratio of at least 10 to be good value. Expansion of the valuation multiple could result in a small increase in shareholder returns in the future.
Finally, AbbVie’s stock currently yields 4.5 percent, which is a very favorable payment when compared to the S&P 500 Index’s current yield of just 1.4 percent. When you add it all up—future EPS growth, a growing valuation multiple, and dividend payouts—we’re looking at total returns of more than 9% a year.
AbbVie is a dividend-paying company with a growing dividend. Since its spin-off from Abbott, it has announced significant dividend hikes. According to AbbVie, the company’s quarterly dividend increased by 225 percent from 2013 to 2020.
Dividend Aristocrat #1: Becton, Dickinson & Company (BDX)
In the medical supply industry, Becton, Dickinson & Company is a global leader. The corporation has a revenue of more than $19 billion each year, with around 45 percent of revenue originating from outside the United States.
Medical Devices, Life Sciences, and Intervention are the three business segments that BDX operates today. Supplies such as needles for drug delivery systems and surgical blades are sold in the Medical Devices segment.
Despite the global economic impact of the coronavirus pandemic, BDX has continued to perform strongly over the past year. BDX increased sales by 15% in the most recent quarter compared to the same quarter the previous year.
The Medication Delivery Solutions business continued to drive revenue growth in the Medical segment, which increased by 4.7 percent to $2.3 billion. Meanwhile, Life Science revenue increased by 38%, with biosciences growing by double digits due to increased lab activity. Finally, interventional revenue remained stable at about more over $1 billion.
In addition to reporting quarterly financial results, the company confirmed its fiscal 2021 outlook. The company’s management expects adjusted EPS to be in the $12.75 to $12.85 range. On a currency-neutral basis, revenue is expected to increase by 10% to 12% in fiscal 2021. Overall, the company is predicted to grow strongly in 2021, thanks to two important growth catalysts: the aging population and expansion in new countries.
For starters, many wealthy countries, such as the United States, have aging populations. For example, the Baby Boomer generation in the United States is a sizable group, implying that demand for healthcare products and services will continue to rise. This is a significant fundamental tailwind for BDX, which will help it develop domestically.
Second, BDX’s international development is a crucial growth driver, particularly in emerging markets, which are rising at a faster rate than developed markets. For example, in the most recent quarter, BDX’s foreign expansion was predominantly driven by developing countries. The company’s foreign revenue increased by 26%, with developed countries accounting for 10% of the rise and developing markets accounting for 24%, with China accounting for 62 percent of the increase.
BDX stock presently trades at a price-to-earnings ratio of 19.1 based on predicted adjusted EPS of $12.80 for fiscal 2021, which represents the midpoint of management projection. Our target price-to-earnings ratio is 18.6, which is in line with the stock’s 10-year average. While this indicates that the stock is slightly expensive, it will have a minor impact on future shareholder returns.
As a result, if the current P/E multiple of 19.1 falls to 18.6 in the following five years, yearly shareholder returns will only be lowered by 0.5 percent per year. Future earnings-per-share growth and dividends would also improve shareholder returns.
Over the next five years, we predict BDX to achieve 10% annual EPS growth, indicating the company’s competitive advantages and growth potential from the different catalysts outlined previously. Finally, the current dividend yield on the stock is 1.4 percent.
Taking everything into account, we predict BDX to provide annual total returns of 10.9 percent over the next five years. This is a high projected rate of return, especially for a dividend stock that pays out consistently. BDX is currently our top-ranked Dividend Aristocrat, with a strong projected rate of return.
Is Walmart a good dividend stock?
Walmart’s dividend yield is 1.6 percent at current share prices, which is similar to the S&P 500 index’s 1.5 percent yield.
Despite the fact that income investors prefer equities with greater yields than the overall market average, Walmart’s strong track record, extended run of yearly payment raises, and ability to continue investing in its business make this a solid choice for them.
How often do Walmart pay dividends?
What Is The Frequency Of Walmart Dividend Payments? Walmart distributes its dividend four times a year. However, they do not pay dividends in the traditional quarterly manner. Because most corporations in the United States do not pay dividends every three months.
Does Walmart have preferred dividends?
A preferred dividend is a dividend that is paid on a company’s preferred stock. Walmart’s preferred dividends were $0 million for the three months ending in October 2021.
Is Home Depot a dividend aristocrat?
The financial crisis caused the dividend freeze 12 years ago, which is why the company is “nearly” a dividend aristocrat. The company pays a safe dividend with a payout ratio below 50%, and the current dividend yield is just under 2%, about 50% greater than the S&P 500’s dividend yield.
