In this article, we discuss best dividend aristocrats according to analysts. You can skip our detailed analysis of dividend stocks and their performance, and go directly to read 10 Best Dividend Aristocrats According to Analysts.
With the stock market facing ongoing fluctuations, investors are experiencing the frustration of seeing their profits disappear. For instance, the S&P 500 increased by 19.5% from January to July 2023 but has since fallen by 6%. Considering the Federal Reserve's inclination to maintain higher interest rates for an extended period, negative investor sentiment, and the typical seasonal decline, it appears that the momentum of this summer's market rally might continue to weaken as we enter the fall season. According to analysts, investors can mitigate their losses by investing in dividend stocks.
Dividend stocks are already a popular choice among investors due to their reliability in providing a steady stream of income. Between 1993 and the end of last year, the S&P 500 index increased by 777%. But with dividends included, the S&P 500 grew by over 1,400% during that same time frame. In addition to this, when we examine the performance of the S&P 500 on a decade-by-decade basis, we can see that the role of dividends in contributing to the total return has fluctuated over time. From 1930 to 2021, dividends accounted for an average of 40% of the S&P 500's total return.
A recent study conducted by Morgan Stanley's chief investment officer, Mike Wilson, found that stocks that pay dividends tend to perform better in the long run and are more resilient during market downturns. Here are some comments from the analyst, taken from his interview with Business Insider this month.
"Our economists are of the view that inflation will continue to slow from elevated levels over the next 12 months. That backdrop is supportive of owning dividend-related factors and defensive dividend payers, in particular."
He further said:
"Dividends provide a positive return cushion with a notable portion of outperformance for payers versus non-payers coming during periods of market volatility. Specifically, the majority of outperformance comes during large market pullbacks such as 2000, 2008, 2015, and 2020."
The Business Insider report also revealed that stocks that started paying dividends in 2000 have outperformed the market since then. The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) have been raising their dividends for decades, becoming top choices for investors. In this article, we will discuss some of the best dividend stocks to buy according to analysts.
For our list, we scanned a list of the S&P 500 Dividend Aristocrats, companies that have raised their dividends for 25 consecutive years or more. We then ranked these stocks according to their average analyst ratings from Yahoo Finance, where a lower score signifies a better rating. The "Recommendation Rating" is a way to assess stocks. It uses a scale from 1 to 5, with each number indicating a different recommendation:
Strong Buy
Buy
Hold
Underperform
Sell
From this ranking, we selected the stocks with scores of 2.4 or less.
Federal Realty Investment Trust (NYSE:FRT) is an American real estate investment trust company that specializes in the ownership, management, development, and operation of retail and mixed-use properties. The company currently pays a quarterly dividend of $1.09 per share, having raised it by 0.9% in August this year. As of October 9, the stock has a dividend yield of 4.95%. It is among the best dividend stocks on our list.
At the end of Q2, 15 hedge funds tracked by Insider Monkey reported having stakes in Federal Realty Investment Trust (NYSE:FRT), compared with 21 in the previous quarter. The collective value of these stakes is roughly $125 million.
Sysco Corporation (NYSE:SYY) is a multinational corporation that specializes in food distribution and related services. It is one of the world's largest foodservice distributors, serving a wide range of customers in the food service industry.
On August 24, Sysco Corporation (NYSE:SYY) declared a quarterly dividend of $0.50 per share, which was in line with its previous dividend. It is one of the best dividend stocks on our list as the company has been raising its dividends consistently for the past 54 years. The stock's dividend yield on October 9 came in at 3.15%.
The number of hedge funds tracked by Insider Monkey owning stakes in Sysco Corporation (NYSE:SYY) grew to 39 in Q2 2023, from 34 in the previous quarter. The overall value of these stakes is over $703 million. With over 1.5 million shares, Yacktman Asset Management was the company's leading stakeholder in Q2.
Dover Corporation (NYSE:DOV) is an American diversified industrial manufacturing company that operates across a range of industries. The company has been increasing its dividends for over 67 years, which is one of the longest streaks in the market. It currently pays a quarterly dividend of $0.51 per share. With a dividend yield of 1.45% as of October 9, DOV is one of the best dividend stocks on our list.
As of the close of Q2 2023, 34 hedge funds tracked by Insider Monkey owned investments in Dover Corporation (NYSE:DOV), up from 30 in the previous quarter. The collective value of stakes owned by these hedge funds is over $387.4 million.
PPG Industries, Inc. (NYSE:PPG) is a global industrial company that specializes in the production and distribution of paints, coatings, and specialty materials. The company was a popular stock among hedge funds in the second quarter of 2023, as 48 funds in Insider Monkey's database owned stakes in the company, up significantly from 34 in the previous quarter. The total value of these stakes is over $1.3 billion.
On July 20, PPG Industries, Inc. (NYSE:PPG) announced a 4.8% hike in its quarterly dividend to $0.65 per share. The company has been rewarding shareholders with regular dividends for 124 years and has raised its payouts for 51 consecutive years. The stock has a dividend yield of 2.02%, as of October 9.
ClearBridge Investments mentioned PPG Industries, Inc. (NYSE:PPG) in its Q2 2023 investor letter. Here is what the firm has to say:
“We were fairly active in the quarter as market dislocations allowed us to be opportunistic, while focusing on companies with stronger moats, better pricing power, more predictable long-term growth and higher returns. In the materials sector we exited PPG Industries, Inc. (NYSE:PPG) and initiated a position in Sherwin-Williams. While both companies operate in the paint and coating industry and are benefiting from improving margins as raw material prices have come down of late, we believe Sherwin-Williams’ dominant retail footprint affords it better pricing power through the cycle. The company provided conservative 2023 guidance and has been successfully gaining market share in the pro segment. While PPG has more European and industrial exposure, Sherwin-Williams’ residential and more domestic focus should also benefit the company as housing indicators appear to be troughing. Weak housing in the face of higher mortgage rates caused Sherwin-Williams stock to sell off in the first quarter, creating a compelling investment opportunity for long-term focused fundamental investors.”
An American multinational consumer goods company, The Procter & Gamble Company (NYSE:PG) is next on our list of the best dividend stocks. The company's dividend growth streak currently stands at 67 years and it pays a quarterly dividend of $0.9407 per share. The stock has a dividend yield of 2.62%, as of October 9.
At the end of June 2023, 74 hedge funds in Insider Monkey's database reported having stakes in The Procter & Gamble Company (NYSE:PG), compared with 75 in the previous quarter. The consolidated value of these stakes is over $5.3 billion.
Air Products and Chemicals, Inc. (NYSE:APD) is an American global industrial gases and chemicals company that specializes in providing a wide range of products and services to various industries. The company pays a quarterly dividend of $1.75 per share and has a dividend yield of 2.46%, as of October 9. It has been growing its dividends consistently for the past 41 years, which places it as one of the best dividend stocks on our list.
The number of hedge funds tracked by Insider Monkey owning stakes in Air Products and Chemicals, Inc. (NYSE:APD) stood at 43 in the second quarter of 2023. The consolidated value of these stakes is over $657.5 million.
Chubb Limited (NYSE:CB) is a global insurance company that offers a wide range of insurance and reinsurance products and services to individuals, businesses, and other organizations. On August 10, the company declared a quarterly dividend of $0.86 per share, which was in line with its previous dividend. It has been raising its dividends consistently for the past 30 years. The stock has a dividend yield of 1.63%, as of October 9.
Insider Monkey's database of Q2 2023 indicated that 50 funds owned stakes in Chubb Limited (NYSE:CB) in Q2 2023, growing from 45 in the previous quarter. The consolidated value of these stakes is over $1.73 billion. With over 1.5 million shares, Millennium Management was the company's leading stakeholder in Q2.
Cintas Corporation (NASDAQ:CTAS) is an American company that provides a range of products and services primarily focused on workplace essentials, including uniform rental and facility services. The company offers a quarterly dividend of $1.35 per share, having raised it by 17.4% in July this year. This marked the company's 40th consecutive year of dividend growth. The stock has a dividend yield of 1.08%, as of October 9.
As of the end of Q2 2023, 40 hedge funds tracked by Insider Monkey's database owned stakes in Cintas Corporation (NASDAQ:CTAS), compared with 39 in the previous quarter. The collective value of these stakes is over $1.36 billion.
An American energy company, Chevron Corporation (NYSE:CVX) has been raising its dividends consistently for the past 36 years. The company pays a quarterly dividend of $0.40 per share and has a dividend yield of 3.62%, as of October 9. It is among the best dividend stocks on our list.
As of the close of Q2 2023, 73 hedge funds in Insider Monkey's database owned investments in Chevron Corporation (NYSE:CVX), up from 64 in the previous quarter. With stakes worth over $19.3 billion, Berkshire Hathaway was the company's largest stakeholder in Q2.
The Sherwin-Williams Company (NYSE:SHW) is a global leader in the manufacturing, distribution, and sale of paints, coatings, and related products. The company pays a quarterly dividend of $0.605 per share and has a dividend yield of 0.96%, as of October 9. It is one of the best dividend stocks on our list as the company maintains a 44-year streak of consistent dividend growth.
The number of hedge funds tracked by Insider Monkey owning stakes in The Sherwin-Williams Company (NYSE:SHW) grew to 78 in Q2 2023, from 68 in the previous quarter. Their collective stake value is over $4.5 billion.
Archer-Daniels-Midland Company (NYSE:ADM) is an American food processing and commodities trading company. It is also involved in the processing of agricultural commodities such as soybeans, corn, wheat, and other grains. The company has a dividend growth streak spanning over 50 years, which makes ADM one of the best dividend stocks on our list. It offers a quarterly dividend of $0.45 per share for a dividend yield of 2.44%, as of October 9.
As of the end of June 2023, 32 hedge funds tracked by Insider Monkey reported having stakes in Archer-Daniels-Midland Company (NYSE:ADM), worth collectively over $676 million.
Lowe's Companies, Inc. (NYSE:LOW) is an American retail corporation with a dividend growth track record of 59 years. The company pays a quarterly dividend of $1.10 per share and has a dividend yield of 2.19%, as of October 9. It is among the best dividend stocks on our list.
At the end of Q2 2023, 64 hedge funds owned stakes in Lowe's Companies, Inc. (NYSE:LOW), according to Insider Monkey's database. The collective value of these stakes is over $3.7 billion. With over 7.4 million shares, Pershing Square was the company's leading stakeholder in Q2.
Albemarle Corporation (NYSE:ALB) is an American chemical manufacturing company, based in North Carolina. In 2023, the company stretched its dividend growth streak to 29 years, which makes it one of the best dividend stocks on our list. It currently pays a per-share dividend of $0.40 every quarter and has a dividend yield of 1.03%, as of October 9.
At the end of Q2 2023, 41 hedge funds in our database owned stakes in Albemarle Corporation (NYSE:ALB), which remained unchanged from the previous quarter. The collective value of these stakes is over $436.4 million.
Aristotle Capital Boston, LLC mentioned Albemarle Corporation (NYSE:ALB) in its Q2 2023 investor letter. Here is what the firm has to say:
“Albemarle Corporation (NYSE:ALB), the world’s largest lithium producer was sold from the portfolio amidst the announcement from Chile’s president that he would nationalize the country’s lithium industry and in time transfer control from SQM and Albemarle to a separate state-owned company effectively changing long-term risk/reward ratio of the stock, in our view.”
Emerson Electric Co. (NYSE:EMR) ranks 12th in our list of the best dividend aristocrats according to analysts. It is a Missouri-based manufacturing and technology company that operates in various industrial and commercial sectors. The company has been raising its dividends consistently for the past 66 years and pays a quarterly dividend of $0.52 per share. Its dividend yield on October 9 came in at 2.17%.
As of the close of Q2 2023, 49 hedge funds tracked by Insider Monkey owned stakes in Emerson Electric Co. (NYSE:EMR), up from 47 a quarter earlier. The overall value of these stakes is over $1.77 billion.
NextEra Energy, Inc. (NYSE:NEE) is one of the best dividend aristocrats. It is an American energy company primarily involved in the generation, transmission, distribution, and sale of electric energy. The company has grown its dividends for 27 consecutive years and pays a quarterly dividend of $0.4675 per share. The stock has a dividend yield of 3.79%, as of October 9.
NextEra Energy, Inc. (NYSE:NEE) was a part of 59 hedge fund portfolios, the same as in the previous quarter, as per Insider Monkey's database. The collective value of stakes owned by these hedge funds is over $918.3 million.
