10 Best Dividend Aristocrats According to Wall Street Analysts

6. Parker-Hannifin Corporation (NYSE:PH)

Analyst Upside Potential as of August 7: 17.4%

Parker-Hannifin Corporation (NYSE:PH) is an Ohio-based manufacturing company that mainly specializes in motion and control technologies. The company has experienced steady growth in recent years by acquiring new companies and focusing more on products with longer life cycles that benefit from long-term trends such as electrification and digitalization. In the past five years, the stock has gained over 211%, outperforming the broader market, which returned a little over 78% during this period. That said, the industrial sector is facing headwinds currently, which is a cause of concern for investors. This was also mentioned by Madison Investments in its Q2 2024 investor letter. Here is what the firm has to say:

“Parker-Hannifin Corporation (NYSE:PH) is a leading diversified industrial manufacturer. The company continues to execute well with respect to improving margins and integrating the recent acquisition of Meggitt. However, the industrial economy is slowing, which weighed on investor sentiment.”

Parker-Hannifin Corporation (NYSE:PH) is a strong dividend payer with impressive cash flow generation. For fiscal 2024, year-to-date cash flow from operations rose by 20% to a record $2.1 billion, representing 14.6% of sales, up from $1.8 billion or 12.8% of sales the previous year. The company achieved notable improvements in adjusted segment operating margins, with the Aerospace Systems Segment having an exceptional quarter. This strong performance resulted in record year-to-date operating cash flow. Moreover, the company expects a 50% increase in its free cash flow and aims to double its dividend over the next five years. This growth is expected to result in larger dividends for shareholders each year, which should also positively impact the stock’s price. According to Street analysts, the stock has an upside potential of 17.4%.

Parker-Hannifin Corporation (NYSE:PH) pays a quarterly dividend of $1.63 per share, having raised it by 10.1% in April this year. This marked the company’s 68th consecutive year of dividend growth, which makes PH one of the best dividend aristocrat stocks on our list. The stock has a dividend yield of 1.68%, as recorded on August 7.

Of the 920 hedge funds tracked by Insider Monkey at the end of Q1 2024, 63 funds owned stakes in Parker-Hannifin Corporation (NYSE:PH), which remained unchanged from the previous quarter. These stakes are collectively valued at nearly $2.3 billion. Among these hedge funds, Diamond Hill Capital was the company’s leading stakeholder in Q1.