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Dividend Aristocrats are great places to be when the market waters get really rough. While they still get knocked down during bear markets, their dividends tend to offer a glimmer of certainty amid turbulent times.
The payouts of Dividend Aristocrats have held up during past crashes, crises, and everything in between. With growing fear that we'll fall into a bear market and recession, insisting on quality may prove a wise decision.
In this piece, we used TipRanks' Comparison Tool to evaluate three of the most enticing Dividend Aristocrats that have outpaced the broader S&P 500 on a year-to-date basis.
Chevron (CVX)
Chevron is a big oil company that Warren Buffett has been loading up lately. Following the Oracle of Omaha's latest helping, Chevron is now a top-four holding in Berkshire Hathaway's portfolio.
Year-to-date, shares of Chevron are up over 40%, much higher than the S&P 500, which is down around 18%. With the stock fluctuating at around $165 per share, the stock could be at risk of a pullback if the broader markets are able to find their footing.
In any case, the reality of higher oil prices seems to be sinking in for many. With Russia's invasion of Ukraine, $100 per barrel of oil may be here to stay. If that's the case, Chevron will be rich with cash flow over the next 18 months.
Though it's hard to chase a stock that's already taken off, it's worth noting that the valuation is still incredibly cheap. The stock trades at just 15.12 times trailing earnings, with a 3.5% dividend yield. It's not a mystery why Buffett likes the big oil firm. Energy stocks are one of the few places to hide from broader volatility, and Chevron is arguably one of the best of the bunch.
With a healthy balance sheet and top-tier production growth, Chevron appears to be one of the Dividend Aristocrats that can keep powering higher, even in the face of a recession.
Overall, CVX holds a Moderate Buy rating from the analyst consensus view, based on 15 Buys, 8 Holds and 1 Sell. The stock’s $171.58 average price target indicates room for only 4% upside from the current share price of $164.71. (See CVX stock forecast on TipRanks)
International Business Machines (IBM)
IBM is an old-time technology company that's also held its own relatively well amid the market correction. Shares of IBM are up 2% year-to-date. While IBM's innovative capabilities may be subject to scrutiny, there's no denying the value and dividend yield—currently at 5.1%—to be had in the name.
It's been years since Berkshire Hathaway has thrown in the towel on IBM. Though the low valuation metrics and high yield were present, the stock had continued to be a perennial underachiever - and it continues to be to this day. Shares are still down from their 2013 highs, even when adjusting for dividends. It's been around nine years, and the stock has still yet to recover.