In this article, we will be looking at the 10 best dividend aristocrats with over 4% yield. If you want to skip our detailed analysis of dividend investing, you can go directly to the 5 Best Dividend Aristocrats with Over 4% Yield.
According to data from a book called Active Value Investing: Making Money in Range-bound Markets, by Vitaliy Katsenelson, dividends not only contribute significantly to investor income but also to the overall market’s total return when studied over longer time periods. For instance, between 1900 and 2000, the S&P 500’s total return was about 10.4%, of which about 5.5% was made up entirely by returns from dividends. Hence, dividends and dividend stocks are some of the most vital components of the stock market. As such, these stocks, like Medtronic plc (NYSE: MDT), AT&T Inc. (NYSE: T), Exxon Mobil Corporation (NYSE: XOM), and AbbVie Inc. (NYSE: ABBV), have proven to be popular investment options among investors, especially income investors. And with the growing popularity of dividend investing, more focus is being shifted towards dividend stocks that offer safer incomes and returns because of their reliable and impressive track records of dividend growth. Case in point: the dividend aristocrats.
What are Dividend Aristocrats?
Any S&P 500 company that has consistently increased its dividend yield for 25 years or more makes the cut to be considered a dividend aristocrat. The stocks on the dividend aristocrats list are among the most stable and reliable dividend investment options out there.
According to Post Oak Private Wealth Advisors in a report on dividend investing, any good dividend investment strategy will take into account a range of factors that impact dividend stock performance and would then approach buying or selling these stocks on the basis of certain rules. The first of these rules is that investors must look first to invest in stocks that have a record of dividend growth for at least 25 years. In quantifying the importance of this claim, the report mentioned that the S&P Dividend Aristocrats Index has managed to consistently outperform the S&P 500 Index between 2006 and 2015 by almost 3% each year. The second rule laid down by the report was that investors should consider investing in higher-yielding stocks as compared to lower-yielding stocks. For this claim as well, data presented showed that between 1928 and 2003, stocks with higher dividend yields managed to outperform stocks with lower yields by about 1.7% each year.
Keeping the above in mind, we have compiled a list of the best dividend aristocrats with a yield of 4% or over. This is to remain in line with Post Oak Private Wealth Advisors’ assertion that dividend stocks with stable dividend growth for at least 25 years and with higher yields than others in their category are prone to outperform the market at large.
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Let’s now look at the 10 best dividend aristocrats with over 4% yield.
We have tracked the data of 866 hedge funds here at Insider Monkey and analyzed it to pick those stocks that are most popular among hedge funds today. We also took into account each stock’s analyst ratings and fundamentals as an indicator of financial health and growth potential. Finally, we made sure that each stock added to our list below had a dividend yield of at least 4%, and ranked them from the lowest to the highest dividend yield.
We have also mentioned the number of hedge fund holders, the dividend yield, and the number of years of dividend increases for each stock.
Best Dividend Aristocrats with Over 4% Yield
10. Walgreens Boots Alliance, Inc. (NASDAQ: WBA)
Number of Hedge Fund Holders: 41
Dividend Yield: 4.04%
Number of Years of Consistent Dividend Growth: 46
Walgreens Boots Alliance, Inc. (NASDAQ: WBA), a drug retail company, operates through its Retail Pharmacy USA, Retail Pharmacy International, and Pharmaceutical Wholesale segments. The company provides health and beauty products and ranks 10th on our list of the best dividend aristocrats with over 4% yield.
Baird’s Eric Coldwell holds an Outperform rating on Walgreens Boots Alliance, Inc. (NASDAQ: WBA) shares, while Barclays analyst Steve Valiquette holds an Equal Weight rating on the stock.
In the fiscal third quarter of 2021, Walgreens Boots Alliance, Inc. (NASDAQ: WBA) had an EPS of $1.38, beating estimates by $0.23. The company’s revenue was $34.03 billion, also beating estimates by $526,60 million. Walgreens Boots Alliance, Inc. (NASDAQ: WBA) has also gained 14.13% year to date and 18.6% in the past year.
By the end of the first quarter of 2021, 41 hedge funds out of the 866 tracked by Insider Monkey held stakes in Walgreens Boots Alliance, Inc. (NASDAQ: WBA) worth roughly $1.13 billion. This is compared to 36 hedge funds in the previous quarter with a total stake value of approximately $609 million.
Like Medtronic plc (NYSE: MDT), AT&T Inc. (NYSE: T), Exxon Mobil Corporation (NYSE: XOM), and AbbVie Inc. (NYSE: ABBV), Walgreens Boots Alliance, Inc. (NASDAQ: WBA) is a good dividend stock to invest in.
Ariel Investments, an investment management firm, mentioned Walgreens Boots Alliance, Inc. (NASDAQ: WBA) in its fourth-quarter 2020 investor letter. Here’s what they said:
“Walgreens Boots Alliance, Inc. has been essentially flat during our brief holding period. We have successfully owned Walgreens in the past. Recently, its share price has been pressured on concerns that Amazon may enter the prescription drug distribution business. As recently as 2015, Walgreens was a market favorite, trading at more than 20 times forward earnings. The company was expected to grow in good times and bad. Walgreens’ new clinics, designed to treat day-to-day healthcare needs such as flu shots and children’s ear infections, could be part of the solution for expensive emergency room overcrowding. Finally, trends toward generic pharmaceutics that began in 2015 are still considered a positive, as pharmacies have more influence in directing customers toward particular generics than with a patient seeking a patented drug prescribed by a doctor. Walgreens will face new competition going forward, but with its current depressed valuation, we believe the threats are more than discounted in an attractive stock price.”
9. Amcor plc (NYSE: AMCR)
Number of Hedge Fund Holders: 17
Dividend Yield: 4.07%
Number of Years of Consistent Dividend Growth: 38
Amcor plc (NYSE: AMCR), a paper packaging company, develops and sells a range of packaging products for food, beverage, medical, and other industries across the world. The company ranks 9th on our list of the best dividend aristocrats with over 4% yield.
Macquarie’s John Purtell just this July upgraded Amcor plc (NYSE: AMCR) shares from Neutral to Outperform. Purtell also has a $12.17 price target on the shares.
In the fiscal third quarter of 2021, Amcor plc (NYSE: AMCR) had an EPS of $0.18, beating estimates by $0.01. The company’s revenue was $3.21 billion, up 2.10% year over year and crossing the previous quarter’s revenue of $3.10 billion. Amcor plc (NYSE: AMCR) has also gained 3.89% in the past 6 months and 0.97% year to date.
By the end of the first quarter of 2021, 17 hedge funds out of the 866 tracked by Insider Monkey held stakes in Amcor plc (NYSE: AMCR) worth roughly $226 million. This is compared to 19 hedge funds in the previous quarter with a total stake value of approximately $247 million.
Like Medtronic plc (NYSE: MDT), AT&T Inc. (NYSE: T), Exxon Mobil Corporation (NYSE: XOM), and AbbVie Inc. (NYSE: ABBV), Amcor plc (NYSE: AMCR) is a good dividend stock to invest in.
8. Consolidated Edison, Inc. (NYSE: ED)
Number of Hedge Fund Holders: 22
Dividend Yield: 4.19%
Number of Years of Consistent Dividend Growth: 47
Consolidated Edison, Inc. (NYSE: ED) is a utility company that operates as part of the regulated electric, gas, and steam delivery businesses in the US. It serves about 3.5 million customers in New York and Westchester County alone, providing electric services. The company also serves other consumers across the US providing gas and steam and ranks 8th on our list of the best dividend aristocrats with over 4% yield.
Anthony Crowdell, an analyst at Mizuho, raised his price target on Consolidated Edison, Inc. (NYSE: ED) shares just this June. The new price target is $78, versus the previous target of $68, and Crowdell has also kept his Neutral rating on the company’s shares.
In the first quarter of 2021, Consolidated Edison, Inc. (NYSE: ED) had an EPS of $1.44, beating estimates by $0.08. The company’s revenue was $3.68 billion, up 13.70% year over year and beating estimates by $236.96 million. Consolidated Edison, Inc. (NYSE: ED) has also gained 3.38% in the past 6 months and 4.67% year to date.
By the end of the first quarter of 2021, 22 hedge funds out of the 866 tracked by Insider Monkey held stakes in Consolidated Edison, Inc. (NYSE: ED) worth roughly $196 million. This is compared to 32 hedge funds in the previous quarter with a total stake value of approximately $393 million.
Like Medtronic plc (NYSE: MDT), AT&T Inc. (NYSE: T), Exxon Mobil Corporation (NYSE: XOM), and AbbVie Inc. (NYSE: ABBV), Consolidated Edison, Inc. (NYSE: ED) is a good dividend stock to invest in.
7. Realty Income Corporation (NYSE: O)
Number of Hedge Fund Holders: 18
Dividend Yield: 4.2%
Number of Years of Consistent Dividend Growth: 26
Realty Income Corporation (NYSE: O) is also referred to as the Monthly Dividend Company. It is an S&P 500 company that works to provide stockholders a reliable monthly income, with its monthly dividends being uplifted by around 6,500 real estate properties that provide its cash flow. The company ranks 7th on our list of the best dividend aristocrats with over 4% yield.
Analyst Andrew Rosivach from Wolfe Research began covering Realty Income Corporation (NYSE: O) shares this June with a Peer Perform rating and a $79 price target.
In the first quarter of 2021, Realty Income Corporation (NYSE: O) had an EPS of $0.72, missing estimates by $0.02. The company’s revenue was $417.69 million, up 6.61% year over year and beating estimates by $1.61 million. Realty Income Corporation (NYSE: O) has also gained 17.06% in the past 6 months and 18.04% year to date.
By the end of the first quarter of 2021, 18 hedge funds out of the 866 tracked by Insider Monkey held stakes in Realty Income Corporation (NYSE: O) worth roughly $183 million. This is compared to 24 hedge funds in the previous quarter with a total stake value of approximately $238 million.
Like Medtronic plc (NYSE: MDT), AT&T Inc. (NYSE: T), Exxon Mobil Corporation (NYSE: XOM), and AbbVie Inc. (NYSE: ABBV), Realty Income Corporation (NYSE: O) is a good dividend stock to invest in.
6. AbbVie Inc. (NYSE: ABBV)
Number of Hedge Fund Holders: 72
Dividend Yield: 4.41%
Number of Years of Consistent Dividend Growth: 49
AbbVie Inc. (NYSE: ABBV), a biotech company, discovers and manufactures pharmaceuticals for sale across the globe. The company is based in North Chicago and ranks 6th on our list of the best dividend aristocrats with over 4% yield.
Robyn Karnauskas, an analyst over at Truist, just this July took over coverage of AbbVie Inc. (NYSE: ABBV) shares with a Buy rating and a $118 price target.
In the first quarter of 2021, AbbVie Inc. (NYSE: ABBV) had an EPS of $2.95, beating estimates by $0.12. The company’s revenue was $12.94 billion, up 50.08% year over year and beating estimates by $160.24 million. AbbVie Inc. (NYSE: ABBV) has also gained 14.59% in the past 6 months and 11.74% year to date.
By the end of the first quarter of 2021, 72 hedge funds out of the 866 tracked by Insider Monkey held stakes in AbbVie Inc. (NYSE: ABBV) worth roughly $5.91 billion. This is compared to 83 hedge funds in the previous quarter with a total stake value of approximately $6.96 billion.
Like Medtronic plc (NYSE: MDT), AT&T Inc. (NYSE: T), and Exxon Mobil Corporation (NYSE: XOM), AbbVie Inc. (NYSE: ABBV) is a good dividend stock to invest in.
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Disclosure: None. 10 Best Dividend Aristocrats with Over 4% Yield is originally published on Insider Monkey.
