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15 Best Dividend Aristocrat Stocks To Buy Now

In this article, we discuss 15 best dividend aristocrat stocks to buy now. You can skip our detailed analysis of dividend stocks and their performance, and go directly to read 5 Best Dividend Aristocrat Stocks To Buy Now

Dividend Aristocrats are a select group of publicly traded companies in the S&P 500 that have raised their dividends for 25 consecutive years or more. These companies are mainly known for their financial stability and the ability to generate consistent cash flows, which allows them to sustain and grow their dividend payments even during economic downturns. While dividend stocks haven’t performed as well as the overall market this year, their attractiveness and advantages are pulling investors back toward them. The S&P 500 Dividend Aristocrat Index, which tracks the performance of companies with 25 or more consecutive years of dividend growth, has gained 0.04% this year so far and its 12-month returns came in at 9.27%, as of September 25.

One of the main reasons for the growing appeal of dividend stocks is the power of compounding. According to a report by Hartford Funds, dividends have played a vital role in the profits investors have made over the past 50 years. Looking at the period since 1960, about 69% of the total gains in the S&P 500 Index can be traced back to the practice of reinvesting dividends and the power of compounding. The report also mentioned that between 1930 and 2022, dividend income typically made up 41% of the total return from the S&P 500 Index.

Dividend stocks are mainly defensive. Despite everything that has occurred this year, such as the regional banking issues, it’s important not to overlook how well the Aristocrats performed last year. They had a negative return of 6.5%, which was much better than the S&P 500’s negative return of 18%. Furthermore, the Aristocrats also offered some protection from the bond market’s significant losses in various asset categories. In 2022, when investors were concerned about the stock valuations, high dividend funds did well because they offered attractive yields to income-seeking investors.

Also Read: S&P 500 Dividend Aristocrats List: Sorted By Analyst Ratings

Simeon Hyman, global investment strategist at ProShares, spoke to Barron’s about the benefits of dividend aristocrat stocks, which include their history of raising dividends, financial stability, and solid cash generation. He also highlighted that in the second quarter, while earnings for companies in the S&P 500 decreased by nearly 6% compared to the previous year, the Aristocrats saw an average earnings increase of about 10%, according to Bloomberg data. Here are some remarks from the analyst:

“The ability [of the Aristocrats] to grow those earnings in an earnings recession and the ability to crank that out without using a lot of capital is the tangible benefit of quality.”

Johnson & Johnson (NYSE:JNJ), Walmart Inc. (NYSE:WMT), and The Procter & Gamble Company (NYSE:PG) are some of the best dividend aristocrat stocks on our list with decades-long dividend growth streak. In addition to these, we have further discussed dividend aristocrats in this article.

Our Methodology:

For this list, we scanned Insider Monkey’s database of Q2 2023 and selected dividend companies that have raised their payouts for 25 consecutive years or more. From the resultant list, we picked dividend aristocrats with the highest number of hedge fund investors having stakes in them at the end of Q2 2023.

15. The Coca-Cola Company (NYSE:KO)

Number of Hedge Fund Holders: 61

The Coca-Cola Company (NYSE:KO) is an American multinational beverage company that also manufactures and markets other non-alcoholic beverage concentrates. The company has been raising its dividends consistently for the past 61 years, which makes it one of the best dividend aristocrat stocks on our list. It currently pays a quarterly dividend of $0.46 per share and has a dividend yield of 3.24%, as of September 26.

The number of hedge funds tracked by Insider Monkey owning stakes in The Coca-Cola Company (NYSE:KO) stood at 61 in Q2 2023, which remained unchanged from its previous dividend. These stakes have a collective value of $27.2 billion. With 400 million shares, Berkshire Hathaway was the company’s leading stakeholder in Q2.

14. Abbott Laboratories (NYSE:ABT)

Number of Hedge Fund Holders: 62

Abbott Laboratories (NYSE:ABT) is next on our list of the best dividend aristocrat stocks to buy now. The global healthcare company has been raising its dividends for the past 51 years and currently pays a quarterly dividend of $0.51 per share. The stock’s dividend yield on September 26 came in at 2.10%.

At the end of Q2 2023, 62 hedge funds in Insider Monkey’s database reported having stakes in Abbott Laboratories (NYSE:ABT), compared with 70 in the previous quarter. These stakes are collectively worth over $1.18 billion.

13. Medtronic plc (NYSE:MDT)

Number of Hedge Fund Holders: 63

Medtronic plc (NYSE:MDT) is an American multinational medical technology company that specializes in medical devices and other healthcare solutions. It is one of the best dividend aristocrat stocks on our list as it maintains a 46-year streak of consistent dividend growth. The company offers a quarterly dividend of $0.69 per share and has a dividend yield of 3.48%, as recorded on September 26.

Medtronic plc (NYSE:MDT) remained popular among hedge funds at the end of Q2 2023 with hedge funds’ positions jumping to 63, from 52 a quarter earlier. The collective value of stakes owned by these hedge funds is over $1.86 billion.

12. Lowe’s Companies, Inc. (NYSE:LOW)

Number of Hedge Fund Holders: 64

Lowe’s Companies, Inc. (NYSE:LOW) is a retail corporation that specializes in home improvement and home appliance retailing. On August 18, the company declared a quarterly dividend of $1.10 per share, which was consistent with its previous dividend. The company has raised its dividends for 59 consecutive years, which makes it one of the best dividend aristocrat stocks on our list. As of September 26, the stock has a dividend yield of 2.10%.

As of the close of Q2 2023, 64 hedge funds in Insider Monkey’s database reported having stakes in Lowe’s Companies, Inc. (NYSE:LOW), compared with 67 in the previous quarter. The overall value of these stakes is over $3.7 billion.

Pershing Square Holdings mentioned Lowe’s Companies, Inc. (NYSE:LOW) in its first half of 2023 investor letter. Here is what the firm has to say:

Lowe’s Companies, Inc. (NYSE:LOW) is a high-quality business with significant long-term earnings growth potential operated by a superb management team that has been successfully executing a multi-faceted business transformation. In recent quarters, industrywide sales have retrenched slightly, driven by record lumber deflation, moderation in DIY discretionary demand (particularly with big-ticket items), a mix-shift from large to smaller Pro-specific projects, and a general trend of consumers reallocating budgets from goods to services. Sales remain elevated relative to 2019 baseline levels driven by a combination of price and mix, while units have largely normalized. Against this backdrop, Lowe’s headline same-store-sales growth has been modestly negative, offset by material margin expansion and the benefits of Lowe’s best-in-class share buyback program positioning the company to generate roughly flat earnings growth in 2023. (Click here to read the full text)

11. PepsiCo, Inc. (NASDAQ:PEP)

Number of Hedge Fund Holders: 68

PepsiCo, Inc. (NASDAQ:PEP) is an American multinational beverage and snack company that also markets a wide range of food products. At the end of Q2 2023, 68 hedge funds in Insider Monkey’s database owned investments in the company, compared with 70 in the previous quarter. The overall value of these stakes is over $3.5 billion. With over 6.6 million shares, Fundsmith LLP was the company’s leading stakeholder in Q2.

PepsiCo, Inc. (NASDAQ:PEP), one of the best dividend aristocrat stocks, has been growing its dividends consistently for the past 51 years. The company offers a quarterly dividend of $1.265 per share for a dividend yield of 2.95%, as of September 26.

10. McDonald’s Corporation (NYSE:MCD)

Number of Hedge Fund Holders: 68

McDonald’s Corporation (NYSE:MCD) is one of the world’s largest fast-food chains that also offers a wide range of beverages and food on its menu. On July 26, the company declared a quarterly dividend of $1.52 per share, which was consistent with its previous dividend. The company’s current dividend growth streak stands at 46 years. As of September 26, the stock has a dividend yield of 2.27%.

At the end of June 2023, 68 hedge funds in Insider Monkey’s database reported having stakes in McDonald’s Corporation (NYSE:MCD), up from 64 in the previous quarter. The consolidated value of these stakes is over $4.2 billion.

9. Linde plc (NYSE:LIN)

Number of Hedge Fund Holders: 70

Linde plc (NYSE:LIN) is next on our list of the best dividend aristocrat stocks. The multinational industrial chemical company was a part of 70 hedge fund portfolios at the end of Q2 2023, which remained unchanged from the previous quarter. The collective value of stakes owned by these hedge funds is over $4.5 billion.

Linde plc (NYSE:LIN) has been raising its dividends consistently for the past 28 years and currently pays a quarterly dividend of $1.275 per share. The stock has a dividend yield of 1.37%, as of September 26.

8. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 71

Exxon Mobil Corporation (NYSE:XOM) is an American multinational oil and gas corporation that is also involved in the various aspects of the energy industry. The company is one of the best dividend aristocrat stocks on our list as it has paid $3.7 billion to shareholders in dividends in the most recent quarter. Moreover, it has raised its payouts for 40 consecutive years. The company offers a quarterly dividend of $0.91 per share for a dividend yield of 3.14%, as of September 26.

The number of hedge funds tracked by Insider Monkey owning stakes in Exxon Mobil Corporation (NYSE:XOM) stood at 71 in Q2 2023, compared with 73 in the previous quarter. The overall value of these stakes is over $3.08 billion.

7. Chevron Corporation (NYSE:CVX)

Number of Hedge Fund Holders: 73

Chevron Corporation (NYSE:CVX) is a major multinational energy company that primarily focuses on the exploration, production, refining, and marketing of petroleum and natural gas products. On August 16, the company declared a quarterly dividend of $0.40 per share, consistent with its previous dividend. It maintains a 36-year streak of consistent dividend growth. The company’s shares boast a yield of 3.61%, as of September 26.

Chevron Corporation (NYSE:CVX) was a popular stock among hedge funds as 73 elite funds in Insider Monkey’s database reported having stakes in the company at the end of Q2 2023, up from 64 in the previous quarter. Their collective stake value is over $21.4 billion.

6. AbbVie Inc. (NYSE:ABBV)

Number of Hedge Fund Holders: 74

AbbVie Inc. (NYSE:ABBV) ranks sixth on our list of the best dividend aristocrat stocks to buy. The American pharmaceutical company was a part of 74 hedge fund portfolios at the end of Q2 2023, compared with 75 in the previous quarter. The stakes owned by these hedge funds have a total value of over $2.37 billion.

AbbVie Inc. (NYSE:ABBV) has raised its payouts for 50 years straight and currently pays a quarterly dividend of $1.48 per share. The stock has a dividend yield of 3.85%, as of September 26.

Carillon Tower Advisers mentioned AbbVie Inc. (NYSE:ABBV) in its Q2 2023 investor letter. Here is what the firm has to say:

“AbbVie Inc. (NYSE:ABBV) reported mixed first-quarter results, which included disappointing revenue for two important products that are expected to drive new growth for the firm. We believe the source of weakness is temporary and remain bullish on the long-term future for both products.”

Click to continue reading and see 5 Best Dividend Aristocrat Stocks To Buy Now.

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Disclosure. None. 15 Best Dividend Aristocrat Stocks To Buy Now is originally published on Insider Monkey.

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Click to continue reading…