In this article, we will take a look at 25 best dividend aristocrats stocks according to analysts.
The age-old debate of investing in dividend growth or high-yield stocks continues to reappear within the dividend investing realm. Between these two, dividend growth is currently the favored option in the market as investors seek out strategies to grow their income over time. In this regard, investors turn to dividend aristocrats, which are the companies that have raised their payouts for 25 consecutive years or more. These stocks have delivered strong returns over the years regardless of market conditions. Between February 2005 and December 2023, dividend aristocrats delivered a 12.50% return in falling interest rate periods and an 11.5% return in rising interest rate periods, according to data by Bloomberg.
Numerous analysts have pointed out the long-term potential of dividend growth stocks, a sentiment echoed by Warren Buffett’s investment in Coca-Cola. Back in August 1994, Berkshire Hathaway completed its acquisition of 400 million shares in the company, worth $1.3 billion. Berkshire initially received a cash dividend of $75 million from Coca-Cola in 1994, the amount which surged to $704 million in 2022. This shows a remarkable growth potential of dividend-paying investments over the long term.
With investors showing a growing preference for dividend-paying stocks, major tech companies started initiating their dividend policies this year. Mark Iong, an equity fund manager at Homestead Advisers, expressed his approval of this move by tech companies in one of his recent interviews with Bloomberg. Here are some comments from the analyst:
“Dividends will be table-stakes for big tech going forward. I think if you don’t pay one, it will now be taken as a sign your business is more volatile. What’s exciting is they are doing dividends and buybacks simultaneously, while also cutting costs and growing, which is them stepping on the pedal for profits across the board.”
Not limited to the tech sector alone, companies across the broader market are showing a strong commitment to dividends this year. Though these equities lagged behind the market last year, their outlook remains strong this year. According to a recent report by S&P Dow Jones Indices, in the first quarter of 2024, companies in the index paid $151.6 billion in dividends, up from $146.8 billion paid during the same period last year. In addition, 796 companies reported dividend hikes during the quarter, amounting collectively to $22.7 billion. Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices, expects that the index will report a 6% year-over-year increase in dividend payments in 2024.
Now, let’s take a look at some of the best dividend aristocrat stocks to buy according to analysts.
Photo by nick chong on Unsplash
Our Methodology:
For our list, we first scanned a list of the best dividend aristocrat stocks, which are the companies that have raised their dividends for 25 consecutive years or more. From this group, we picked stocks with a projected upside potential of over 10% based on analyst price targets. The stocks are ranked according to their upside potential, as of May 26. We also measured hedge fund sentiment around each stock according to Insider Monkey’s database of 920 funds as of Q1 2024. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
25. Pentair plc (NYSE:PNR)
Upside Potential as of May 26: 12.1%
Pentair plc (NYSE:PNR) is an American water treatment company that specializes in water solutions and equipment. On May 6, the company announced a quarterly dividend of $0.23 per share, which was in line with its previous dividend. Overall, the company has been growing its dividends consistently for the past 48 years, which makes PNR one of the best dividend aristocrat stocks on our list. The stock has a dividend yield of 1.11%, as of May 26.
The number of hedge funds tracked by Insider Monkey owning stakes in Pentair plc (NYSE:PNR) grew to 39 in the first quarter of 2024, from 35 in the previous quarter. These stakes are collectively valued at nearly $2 billion. With over 9.2 million shares, Impax Asset Management was the company’s leading stakeholder in Q1.
One of the best dividend aristocrat stocks, Pentair plc (NYSE:PNR) is gaining momentum among investors because of the growing demand for water solutions. The company’s business model addresses the ongoing environmental concerns as the world strives to achieve carbon neutrality. Earlier this year, the US administration announced funding to ensure access to clean water in every state, which will support the company in optimizing its operations and growing its earnings. The effects of this initiative are already visible as the company reported strong first-quarter results for its balanced water portfolio. Since the start of 2024, one of the best dividend aristocrat stocks has surged by 16.6% and its 12-month returns are currently at around 45%.
24. S&P Global Inc. (NYSE:SPGI)
Upside Potential as of May 26: 12.2%
S&P Global Inc. (NYSE:SPGI) is a New York-based capital market company that offers services in financial information and analytics. The company’s dividend growth streak spans over 51 years and it currently pays a quarterly dividend of $0.91 per share. The stock supports a dividend yield of 0.83%, as of May 26. Its dividend growth makes it one of the best dividend aristocrat stocks on our list.
In the first quarter of 2024, S&P Global Inc. (NYSE:SPGI) reported revenue of nearly $3.5 billion, which showed a 10.4% growth from the same period last year. The revenue also beat analysts’ estimates by over $83 million. The company generated $948 million in operating cash flow during the quarter and its free cash flow amounted to $851 million. In FY24, the company expects to return 85% of adjusted free cash flow to shareholders through dividends.
As of the close of Q1 2024, 97 hedge funds in Insider Monkey’s database held stakes in S&P Global Inc. (NYSE:SPGI), growing significantly from 82 in the previous quarter. These stakes are worth over $9.5 billion in total.
S&P Global Inc. (NYSE:SPGI) has surged by 20.2% over the past 12 months, as of the close of May 24. The stock is benefitting from its resilient business model, multiple revenue streams, and shareholder-friendly policies. In FY24, the company expects to return 85% of adjusted free cash flow to shareholders through dividends. S&P Global Inc. (NYSE:SPGI) is actively investing in AI-related programs to improve its operations. The company recognizes that embracing these new technologies is essential to succeed in the current competitive market. Through this, the company can enhance its credit rating process, which would improve the overall credibility of S&P Global’s ratings.
Overall, SPGI trades at a forward PE ratio of 30 and this may look a little bit overstretched. However, its competitor Moody’s (MCO) trades at a forward PE of 38 and the stock increased by around 1500% since Warren Buffett started dumping his MCO shares in 2009. SPGI’s return over the last 15 years is even better than MCO’s return. We wouldn’t be surprised if SPGI continues to outperform the market in the next 10 years. It ranks 24th on our list of the best dividend aristocrat stocks.
23. Cincinnati Financial Corporation (NASDAQ:CINF)
Upside Potential as of May 26: 12.31%
An American insurance company, Cincinnati Financial Corporation (NASDAQ:CINF) is 23rd on our list of the best dividend aristocrat stocks to buy now. In the first quarter of 2024, the company’s revenue jumped by 31% on a year-over-year basis to $2.9 billion. Its net income for the quarter came in at $755 million, up from $225 million during the same period last year.
Cincinnati Financial Corporation (NASDAQ:CINF) currently pays a quarterly dividend of $0.81 per share and has a dividend yield of 2.75%, as recorded on May 26. The company has been rewarding shareholders with growing dividends for the past 63 years.
Cincinnati Financial Corporation (NASDAQ:CINF) was a part of 24 hedge fund portfolios at the end of Q1 2024, down from 33 in the previous quarter, as per Insider Monkey’s database. The stakes held by these hedge funds have a collective value of over $625.8 million. Among these hedge funds, Select Equity Group was the company’s leading stakeholder in Q1.
Though hedge fund sentiment toward Cincinnati Financial Corporation (NASDAQ:CINF) remained negative in the first quarter, the company is still positioned to benefit from its strong market position. As interest rates are expected to stay elevated this year, the company could profit from the increase in its investment income. The company’s future also looks promising because of the growing demand for insurance products and services. In addition to its consistent dividend growth for over six decades, the stock also supports an attractive dividend yield. As of the close of 24, one of the best dividend aristocrat stocks is up by 11.1% this year so far, while its 12-month returns came in at 19.01%. Aristotle Value Equity Strategy said the following about the stock at the beginning of this year:
“We first invested in property and casualty insurer Cincinnati Financial during the fourth quarter of 2020. We continue to admire the company’s prudent underwriting, strong relationships with agencies and financial strength, as evidenced by 60+ consecutive years of dividend increases. Catalysts that have been realized during our holding period include market share gains for agencies and areas that were entered in prior years. We continue to admire this business but decided to sell in favor of what we think is a more optimal opportunity.”
We tend to agree with them. CINF currently trades at a forward PE of 18 which doesn’t look too cheap for an insurance company.
22. Linde plc (NASDAQ:LIN)
Upside Potential as of May 26: 13.02%
Linde plc (NASDAQ:LIN) is a multinational industrial gases and engineering company that offers a wide range of related products and services. On April 29, the company announced a quarterly dividend of $1.29 per share, which fell in line with its previous dividend. It has been growing its dividends consistently for the past 29 years, which makes LIN one of the best dividend aristocrat stocks on our list. The stock has a dividend yield of 1.28%, as of May 26.
At the end of March 2024, 65 hedge funds held stakes in Linde plc (NASDAQ:LIN), declining from 74 in the previous quarter, according to Insider Monkey’s database. These stakes have a consolidated value of more than $3.8 billion.
Since the start of 2024, Linde plc (NASDAQ:LIN) has delivered a 6.3% return to shareholders and its 12-month return came in at 22.7%, as of the close of May 24. The stock is poised to profit more from its hydrogen production, as there is a global shift toward green energy solutions. Moreover, the company has the potential to grow due to the increasing demand for industrial gases in various sectors of the market. The stock is relatively overvalued with its trailing twelve-month P/E ratio of 33.7, however, its strong growth prospects and market position could justify its valuation in the future. Linde plc was trading around $170 in 2018 when it merged with Praxair. The best dividend aristocrat stock returned 150% since then and outperformed the market. We wouldn’t buy it at this price, but we wouldn’t bet against it either.
21. Emerson Electric Co. (NYSE:EMR)
Upside Potential as of May 26: 13.5%
Emerson Electric Co. (NYSE:EMR) ranks 21st on our list of the best dividend aristocrat stocks. The Missouri-based manufacturing company offers technology and engineering solutions to a wide range of industries. The number of hedge funds holding stakes in the company grew to 53 in Q1 2024, from 50 in the previous quarter, as per Insider Monkey’s database. These stakes are worth roughly $1.5 billion in total.
In the second quarter of 2024, Emerson Electric Co. (NYSE:EMR) generated $757 million in operating cash flow, growing from $575 million during the same period last year. Its cash position remained strong with the free cash flow amounting to $675 million in the quarter, up from $513 million in the prior-year period.
Emerson Electric Co. (NYSE:EMR), one of the best dividend aristocrat stocks, holds one of the longest dividend growth streaks in the market, spanning over 67 years. The company offers a quarterly dividend of $0.525 per share for a dividend yield of 1.85%, as of May 26.
Emerson Electric Co. (NYSE:EMR) is gaining traction among investors because of its diverse portfolio of products, enabling it to generate revenue from multiple sources. Moreover, the company has always remained committed to its shareholder obligation. In its recent earnings report, the company has announced that it expects to return approximately $1.2 billion to shareholders through dividends in FY24. Elite funds have also remained bullish on the stock in the most recent quarter. Ken Griffin increased his stake in the company by nearly 600% during the quarter. With the AI wave going strong around the world, the company’s focus on digital transformation and the utilization of cutting-edge solutions in its operations enables it to stay ahead of its peers.
Nevertheless, the stock currently trades at a forward PE of 21 and looks only a bit undervalued. We believe the time to buy this stock was in November of 2023 when multiple insiders were snapping up shares at prices between $85 and $88. EMR shares currently trade above $110.
20. Atmos Energy Corporation (NYSE:ATO)
Upside Potential as of May 26: 14.20%
Atmos Energy Corporation (NYSE:ATO) is an American utility company, based in Texas. The company is mainly engaged in the distribution of natural gas to its residential, commercial, and industrial customers. The company pays a per-share dividend of $0.805 every quarter for a dividend yield of 2.86%, as of May 26. In 2023, it stretched its dividend growth streak to 39 years, which makes ATO one of the best dividend aristocrat stocks on our list.
According to Insider Monkey’s database of Q1 2024, 22 hedge funds held stakes in Atmos Energy Corporation (NYSE:ATO), up from 21 in the previous quarter. The total value of these stakes is over $332.5 million. With over 1 million shares, Citadel Investment Group was the company’s leading stakeholder in Q1.
Atmos Energy Corporation (NYSE:ATO) demonstrates a strong financial footing, with 20 consecutive years of EPS growth. Recent reports have shown that global gas demand is set to grow in 2024 due to the expected cold winter, so the stock can also benefit from this ever-increasing need. The stock has a trailing twelve-month P/E of 17 and a forward P/E of 16.5. Israel Englander is one of the leading investors in the company in Q1, reflecting his strong interest in commodities. In 2023, the fund manager made around $600 million from commodities investments, largely due to the solid performance of natural gas and power trading. ATO’s share price is unchanged since the end of 2019 and the current high interest rate environment isn’t very helpful either. The natural gas utility company has been increasing its earnings at a healthy page and the stock’s poor performance is because of the stock’s overvaluation in the low interest rate environment. Going forward, we believe ATO can deliver double digit returns as earnings growth will be in the driver’s seat. If we see a moderate decline in interest rates next year, that may also add a few percentage points to the stock’s performance. The stock ranks 20th on our list of the best dividend aristocrat stocks.
19. The Sherwin-Williams Company (NYSE:SHW)
Upside Potential as of May 26: 14.72%
The Sherwin-Williams Company (NYSE:SHW) is an Ohio-based paint and coating manufacturing company that also specializes in the distribution of related products. In the first quarter of 2024, the company returned $728 million to shareholders through dividends and share repurchases. It offers a quarterly dividend of $0.715 per share and has a dividend yield of 0.94%, as of May 26. In February this year, the company raised its dividend for the 45th consecutive year, which makes SHW one of the best dividend aristocrat stocks on our list.
Insider Monkey’s database of Q1 2024, showed that 78 hedge funds held stakes in The Sherwin-Williams Company (NYSE:SHW), growing from 72 in the previous quarter. These stakes have a total value of over $4.2 billion. ClearBridge Large Cap Value Strategy made the following comment about The Sherwin-Williams Company (NYSE:SHW) in its Q2 2023 investor letter:
“We were fairly active in the quarter as market dislocations allowed us to be opportunistic, while focusing on companies with stronger moats, better pricing power, more predictable long-term growth and higher returns. In the materials sector we exited PPG Industries and initiated a position in The Sherwin-Williams Company (NYSE:SHW). While both companies operate in the paint and coating industry and are benefiting from improving margins as raw material prices have come down of late, we believe Sherwin-Williams’ dominant retail footprint affords it better pricing power through the cycle. The company provided conservative 2023 guidance and has been successfully gaining market share in the pro segment. While PPG has more European and industrial exposure, Sherwin-Williams’ residential and more domestic focus should also benefit the company as housing indicators appear to be troughing. Weak housing in the face of higher mortgage rates caused Sherwin-Williams stock to sell off in the first quarter, creating a compelling investment opportunity for long-term focused fundamental investors.”
In the past 12 months, The Sherwin-Williams Company (NYSE:SHW) is up by 33.44%, as of the close of May 24. The stock is consistently benefitting from its position as the market leader in the paint and coating industry. Moreover, its products and services are used in both commercial and residential markets, which enabled the company to expand its operations over the years. However, due to declining new residential sales, the company reported a 1.4% year-over-year drop in its consolidated net sales in the first quarter of 2024, but it observed positive momentum with homebuilder customers.
We like SHW as a company and as one of the best dividend aristocrat stocks, however, it isn’t a cheap stock at a forward P/E multiple of 26 for a company that is operating in a slow-growing industry. One can easily find other stocks that are growing at a faster clip than SHW but trading at a cheaper multiple.
18. Cardinal Health, Inc. (NYSE:CAH)
Upside Potential as of May 26: 16.02%
Cardinal Health, Inc. (NYSE:CAH) is an American multinational healthcare services company that distributes pharmaceuticals and other medical products. On May 7, the company hiked its quarterly dividend by 1% to $0.5056 per share. This marked the company’s 38th consecutive year of dividend growth, which makes CAH one of the best dividend aristocrat stocks on our list. The stock’s dividend yield on May 26 came in at 2.10%.
In fiscal Q3 2024, Cardinal Health, Inc. (NYSE:CAH) reported revenue of nearly $55 billion, which showed an 8.76% growth from the same period last year. Its Non-GAAP operating earnings were $666 million, up from $606 million in the prior-year period.
As of the end of Q1 2024, 45 hedge funds tracked by Insider Monkey held stakes in Cardinal Health, Inc. (NYSE:CAH), down from 49 in the preceding quarter. The consolidated value of these stakes is over $1.5 billion. With over 3.5 million shares, AQR Capital Management was the company’s largest stakeholder in Q1.
Cardinal Health, Inc. (NYSE:CAH) is well-positioned to benefit from its constant investments in innovation and technology. Sio Capital’s Michael Castor was bullish on the stock 5-6 years ago. CAH shares more than doubled over the last 5 years. The stock still looks relatively cheap, currently trading at a forward P/E ratio of 13. In the past 12 months, the stock has delivered an 18.52% return to shareholders. Overall, analysts have given a positive outlook for the healthcare sector this year, attributing this to ongoing transformations driven by advancements in AI and evolving patient requirements. In its most recent quarter, the company achieved widespread growth, showing significant profit increases in both its Pharmaceutical and Specialty Solutions segments, building on an already strong performance from the previous year.
17. Medtronic plc (NYSE:MDT)
Upside Potential as of May 26: 16.8%
Medtronic plc (NYSE:MDT) is 17th on our list of the best dividend aristocrat stocks. The medical device company declared a 1.4% hike in its quarterly dividend to $0.70 per share on May 23. Through this increase, the company stretched its dividend growth streak to 47 years. The stock supports an impressive dividend yield of 3.40%, as of May 26.
In its recently announced FY24 earnings, Medtronic plc (NYSE:MDT) reported an operating cash flow of $6.8 billion, which showed a 12% growth from the same period last year. Its free cash flow also increases by 14% on a year-over-year basis at $5.2 billion. During the year, the company returned $5.5 billion to shareholders through share repurchases.
At the end of Q1 2024, 54 hedge funds tracked by Insider Monkey reported having stakes in Medtronic plc (NYSE:MDT), compared with 56 in the previous quarter. These stakes have a collective value of over $2.2 billion. Among these hedge funds, First Eagle Investment Management was the company’s leading stakeholder in Q1.
Medtronic plc (NYSE:MDT) has a strong track record of delivering risk-adjusted returns to shareholders. For FY25, the company expects its organic revenue growth between 4% to 5%. Additionally, the company’s commitment to shareholders has remained consistent over the years. In the past 10 years, it has raised its dividend payouts by 130%. MDT shares actually lost around 15% of their value over the last year and currently trade at a forward PE of 15. Here is how Polen Capital explained MDT’s poor performance recently:
“Medtronic plc (NYSE:MDT) is the largest medical technology company in the world. Despite a few tough years characterized by post-COVID supply chain issues, Chinese market payment changes, and diabetes business challenges, the company has continued to invest aggressively in its R&D pipeline. Because of this long-term mindset and commitment to product innovation, the company is in a position today where it has numerous significant new product launches across the business, helping to accelerate growth and improve profitability. More recently, the market’s infatuation with the promise of GLP-1 drugs has resulted in valuation de-ratings across the medtech industry broadly, to which Medtronic was not immune. The combination of all of these factors has resulted in Medtronic shares trading at their lowest valuation in a decade. Given the emerging business momentum, we felt the valuation offers a compelling chance to increase our weight in the world’s largest medtech company.”
16. Federal Realty Investment Trust (NYSE:FRT)
Upside Potential as of May 26: 16.9%
Federal Realty Investment Trust (NYSE:FRT) is a Maryland-based real estate investment trust company that mainly invests in shopping centers. On May 2, the company announced a quarterly dividend of $1.09 per share, which fell in line with its previous dividend. Overall, it has been growing its dividends for 56 consecutive years. With a dividend yield of 4.45% as of May 26, FRT is one of the best dividend aristocrat stocks on our list.
The number of hedge funds tracked by Insider Monkey owning stakes in Federal Realty Investment Trust (NYSE:FRT) stood at 22 in Q1 2024, which remained the same as in the previous quarter. The collective value of these stakes is over $244 million.
Federal Realty Investment Trust (NYSE:FRT) has a diversified portfolio of high-quality retail properties, which has helped it to consistently grow its revenue and earnings. The company holds the longest dividend growth streak in the REIT sector. In the past 12 months, the stock has delivered a 12.34% return to shareholders, as of the close of May 24. While real estate stocks are currently experiencing a downturn, the upward trend in home prices and the increase in new listings have the potential to neutralize this challenge. FRT is expected to deliver close to $7 in funds from operation (FFO) in 2024 and the stock currently trades at a forward P/FFO ratio of 14 which isn’t too bad.
15. Genuine Parts Company (NYSE:GPC)
Upside Potential as of May 26: 17.6%
Genuine Parts Company (NYSE:GPC) is an American industrial supplies company that mainly specializes in automotive and industrial replacement parts. The company has been paying regular dividends to shareholders since it went public in 1948. Moreover, it has rewarded shareholders with growing dividends for the past 68 consecutive years, which makes it one of the best dividend aristocrat stocks on our list. The stock’s dividend yield currently stands at 2.75%.
Genuine Parts Company (NYSE:GPC) reported a strong cash position of $1.05 billion for the first quarter of 2024, almost doubling it over the year. The company also recorded operating cash flow of $318 million and $202.62 million in free cash flow. In April, the company declared a dividend of $1.00 per share, increasing it from the previous payout of $0.95.
Genuine Parts Company (NYSE:GPC) is a leading distributor of automotive and industrial equipment and has a diversified business model. The company is well-positioned to benefit from the consistent demand for replacement parts driven by higher new car acquisition costs. Fewer people in the US can afford a new car due to higher interest rates and supply chain issues that have driven prices higher. Trading at 16 times earnings, Genuine Parts Company’s stock doesn’t look too expensive, especially when compared to competitors like Autozone Inc (NYSE:AZO) and O’Reilly Automotive Inc (NASDAQ:ORLY). The latter are trading at 19.2 times earnings and 24.4 times earnings and neither Autozone nor O’Reilly are currently paying dividends for shareholders. Therefore, Genuine Parts Company seems like a solid pick for investors looking to get exposure to a growing market, while also receiving regular dividend payouts.
As of the end of the first quarter, 36 hedge funds in Insider Monkey’s database held stakes in Genuine Parts Company (NYSE:GPC), unchanged from the previous quarter. Their positions have a consolidated value of nearly $700 million. Among these hedge funds, D E Shaw was the company’s largest shareholder, having disclosed ownership of 756,472 shares, down by 31% over the quarter.
14. Sysco Corporation (NYSE:SYY)
Upside Potential as of May 26: 17.7%
Sysco Corporation (NYSE:SYY) is a Texas-based corporation that specializes in the food services distribution industry. For the third quarter of fiscal 2024, the company reported revenue of $19.4 billion, which showed a 2.6% growth from the same period last year. In the first 39 weeks of fiscal, the company returned $1.5 billion to shareholders, including $758.1 million in dividends. Sysco Corporation (NYSE:SYY), currently offers a quarterly dividend of $0.51 per share, having raised it from $0.50, and which translates into a yield of 2.80%. The company is a Dividend King, with 54 consecutive years of dividend growth under its belt.
In its latest earnings release, Sysco Corporation (NYSE:SYY) also provided a strong outlook for the full fiscal year. The company saw revenue growth of 2.7% on the year to $19.4 billion and adjusted EPS increased by 6.7% to $0.96. The EPS came in slightly higher than the consensus estimate of $0.95, but the revenue missed analysts’ expectations by $286 million.
Though Aristotle Capital Management, LLC sold its position in Sysco Corporation (NYSE:SYY), the firm appreciated the company’s financials and management in its first quarter 2024 investor letter.
“During the quarter, we sold our positions in Phillips 66 and Sysco Corporation (NYSE:SYY) and invested in two new positions: Lowe’s Companies and TotalEnergies.
We have owned Sysco, one of the largest food distribution companies in the world, since the fourth quarter of 2022. During our holding period, Sysco’s CEO Kevin Hourican has made progress transforming various aspects of the business, including implementing new technologies able to assist customers with their own changing menus and needs. Through leveraging its scale and purchasing power, we continue to view Sysco as well positioned to gain further share of the highly fragmented U.S. food distribution market, all while sustaining its more than 50-year streak of increasing dividends. Though the company meets each of our criteria for investment, we decided it was the best candidate for sale to fund the purchase of Lowe’s Companies, which we believe is a more optimal investment.”
Sysco Corporation (NYSE:SYY) saw 46 funds from our database holding shares at the end of March, an increase from 39 funds in the previous quarter.
13. McDonald’s Corporation (NYSE:MCD)
Upside Potential as of May 26: 17.8%
McDonald’s Corporation (NYSE:MCD) is next on our list of the best dividend aristocrat stocks. The company’s quarterly dividend currently stands at $1.67 per share and its stock has a dividend yield of 2.5%. It holds a 47-year track record of consistent dividend growth.
McDonald’s Corporation (NYSE:MCD)’s revenue has remained consistent over the years because of the company’s franchise business model and global spread. There are roughly 41,800 McDonald’s restaurants across 75 countries and 95% of these restaurants are franchised. The company’s stock is down by 13% year-to-date as investors are concerned about lower margins and a slowdown in growth. McDonald’s Corporation (NYSE:MCD) expects its operating profit margin to remain flat in 2024 and has forecasted single-digit revenue growth.
Nevertheless, McDonald’s Corporation (NYSE:MCD) remains one of the largest fast-food restaurant operators in the world and one of the best fast food stocks to buy according to analysts. The company is currently facing challenges due to lower-income households reducing their spending and switching to eating at home, but the management has assured investors that they will address the affordability issues.
According to our records, 63 hedge funds held shares of McDonald’s Corporation (NYSE:MCD) with a total value of $2.3 billion, as of the end of March. With over 2.3 million shares, Citadel Investment Group is the largest shareholder among the funds tracked by Insider Monkey.
12. Nordson Corporation (NASDAQ:NDSN)
Upside Potential as of May 26: 17.9%
Ohio-based Nordson Corporation (NASDAQ:NDSN) has been growing its dividends for 60 consecutive years. The company, which manufactures solutions for adhesives, sealants, and coatings, currently pays out a quarterly dividend of $0.68 per share and its stock has a dividend yield of 1.14%. In the second quarter of fiscal 2024, the company generated over $650.6 million in revenue, missing the consensus estimate by $14.4 million, and its EPS of $2.34 was higher than the expected $2.32.
Nordson Corporation (NASDAQ:NDSN) can benefit from its global presence which provides the company with exposure to a wide range of industries and markets. The company operates in three segments, Industrial Precision Solutions, Medical and Fluid Solutions, and Advanced Technology Solutions. In the second quarter of fiscal 2024, the first two segments saw an increase in revenue of 9% and 2%, but the Advanced Technology Solutions’ revenue declined by 22% on the year. Going forward, Nordson Corporation (NASDAQ:NDSN) expects revenue growth of up to 2% this year and adjusted EPS between $9.35 and $9.75.
At the end of March, 23 funds tracked by Insider Monkey held $76.3 million worth of Nordson stock, an increase of four funds over the quarter. Israel Englander’s Millennium Management boosted its position by 121% to 71,688 shares during the quarter.
11. Lowe’s Companies, Inc. (NYSE:LOW)
Upside Potential as of May 26: 18.05%
Up next on our list of the best dividend aristocrat stocks is Lowe’s Companies, Inc. (NYSE:LOW). The home improvement retailer has a vast network of stores and a strong online presence for the convenience of its customers. As analysts see a rebound in the housing market over the next few months, Lowe’s Companies is expected to benefit from increased consumer spending. Recently, hedge fund manager Bill Ackman announced that his fund, Pershing Square, had exited Lowe’s Companies, Inc. (NYSE:LOW), after the home improvement company generated profits of over $1 billion. Ackman informed investors that Lowe’s had been a highly successful investment for Pershing Square and stated that he decided to cash out after holding the position for nearly six years to reallocate capital for new investments.
With a forward P/E of 17.76, we find Lowe’s Companies, Inc. (NYSE:LOW) shares to be attractively valued, especially in comparison to one of its closest peers, Home Depot Inc (NYSE:HD), which is trading at 22 times forward earnings.
Lowe’s Companies, Inc. (NYSE:LOW) has been rewarding shareholders with growing dividends for the past 59 years. The company currently offers a quarterly dividend of $1.10 per share and its stock carries a dividend yield of 2.00%.
The number of hedge funds tracked by Insider Monkey owning stakes in Lowe’s Companies, Inc. (NYSE:LOW) fell to 60 from 68 during the first three months of 2024.
