10 Best Dividend Aristocrats According to Wall Street Analysts

2. Emerson Electric Co. (NYSE:EMR)

Analyst Upside Potential as of August 7: 27.4%

Emerson Electric Co. (NYSE:EMR) ranks second on our list of the best dividend aristocrat stocks. The American multinational manufacturing company offers products and services related to commercial, industrial, and consumer markets. The company is making significant moves to streamline its portfolio and strengthen its position as a global leader in automation by finalizing an agreement to exit the Copeland business entirely. In addition, it is working to create value for its shareholders by focusing on its higher growth and higher margin automation portfolio.

Emerson Electric Co. (NYSE:EMR) is up by 8.4% in the past 12 months and the stock reached its 52-week high in July this year, when it was trading at around $119 per share. The stock is currently trading at a forward P/E multiple of roughly 17x, which makes it look a bit undervalued. We believe that the optimal time to buy this stock was in November 2023 when several insiders were purchasing shares at prices ranging from $85 to $88.

In fiscal Q3 2024, Emerson Electric Co. (NYSE:EMR) reported an operating cash flow of $1.06 billion, up from $842 million in the same period last year. Its free cash flow for the period also grew to $975 million, from $769 million in the prior-year period. The company expects to return approximately $1.2 billion to shareholders through dividends in FY24. Its current cash position also suggests strong dividend growth in the near future. The company is already maintaining a 67-year track record of consistent dividend growth, which is one of the longest streaks in the market. It offers a quarterly dividend of $0.525 per share and has a dividend yield of 2.01%, as of August 7.

Emerson Electric Co. (NYSE:EMR) was a part of 53 hedge fund portfolios at the end of Q1 2024, up from 50 in the previous quarter, according to Insider Monkey’s database. The stakes held by these hedge funds have a collective value of nearly $1.5 billion. With nearly 3.5 million shares, Adage Capital Management was the company’s leading stakeholder in Q1.