In this article, we discuss the 5 best aristocrat dividend stocks to buy. If you want to read our detailed analysis of dividend investing, go directly to the 10 Best Aristocrat Dividend Stocks to Buy.
5 Best Aristocrat Dividend Stocks to Buy
5. PepsiCo, Inc. (NASDAQ: PEP)
Number of Hedge Fund Holders: 56
Dividend Yield: 2.93%
Ranking 5th in our list of 10 best aristocrat dividend stocks to buy is food and beverage company PepsiCo, Inc. (NASDAQ: PEP). Among the brands the New York-based frizzy beverage maker owns are Doritos, Tostitos, Lay’s, Cheetos, Gatorade, Tropicana, Mountain Dew, and Quaker. The company has increased its dividend every year for the last 48 years and currently provides a quarterly payout of $1.075 per share. PepsiCo, Inc. currently pays a quarterly dividend of $1.075 per share.
In January 2021, PepsiCo, Inc. announced its PLANeT Partnership with Los Angeles-based plant-based meat producer Beyond Meat, Inc. (NASDAQ: BYND). The joint venture intends to produce and market plant-based protein snacks and beverages to capitalize on the growing plant-based food market.
The company has a market cap of $202 billion. The company’s revenue in the first quarter of 2021 came in at $14.8 billion, up 6.8% from $13.9 billion in 2020. In the quarter, the company returned $5.9 billion in dividends and $106 million share repurchases to shareholders. Shares of PEP jumped 11% over the past twelve months. On April 21, Swiss investment bank UBS raised its outlook on the stock to “Buy” from “Neutral” and raised the price target to $165 from $145.
At the end of the fourth quarter of 2020, 49 hedge funds in the database of Insider Monkey held stakes worth $4.29 billion in PepsiCo, Inc. (NASDAQ: PEP) which is an increase from 45 hedge funds in the previous quarter holding stakes worth $2.94 billion.
4. McDonald’s Corporation (NYSE: MCD)
Number of Hedge Fund Holders: 62
Dividend Yield: 2.23%
Fast-food giant McDonald’s Corporation (NYSE: MCD) ranks 4th in our list of the 10 best aristocrat dividend stocks to buy. The company was founded in 1940 and now operates nearly 40,000 McDonald’s in over 119 markets worldwide. Despite the pandemic, McDonald’s Corporation launched over 500 new restaurants in 2020. The company plans to open over 1,300 restaurants worldwide in 2021. The biggest fast-food chain in the world is also a dividend stalwart. The last time MCD increased its dividend was in October 2020, when it increased the quarterly payout by 3% to $1.29 per share. The fast-food chain has increased its annual dividend for 44 straight years and maintains a payout ratio of 73.33%.
The company has a market cap of $173 billion. The company’s revenue in the first quarter of 2021 came in at $5.13 billion, up 9% from $4.7 billion in the first quarter of 2020. Shares of MCD increased 26% over the past twelve months. On May 4, Telsey Advisory Group maintained its “outperform” rating on McDonald’s Corporation, with a $260 price target.
At the end of the fourth quarter of 2020, 62 hedge funds in the database of Insider Monkey held stakes worth $1.37 billion in McDonald’s Corporation (NYSE: MCD). Peter Rathjens, Bruce Clarke, And John Campbell’s Arrowstreet Capital own 2,561,367 shares of the firm worth $574 million.
3. Becton, Dickinson and Company (NYSE: BDX)
Number of Hedge Fund Holders: 65
Dividend Yield: 1.37%
American medical technology firm Becton, Dickinson and Company (NYSE: BDX) ranks 3rd in our list of the best aristocrat dividend stocks to buy. The New Jersey-based company manufactures medical, laboratory, and diagnostic devices. Among the medical products the company distributes worldwide are catheters, hypodermic syringes and needles, blood collection products, and surgical instrumentation products. Becton, Dickinson and Company has increased its annual dividend for 49 consecutive years and maintains a payout ratio of 61%. The company currently pays a quarterly dividend of $0.83 per share.
The company has a market cap of $70 billion. The company’s revenue in the second quarter of 2021 grew 15.4% to $4.9 billion. On May 7, SVB Leerink retained a “Market perform” rating on Becton, Dickinson and Company and reduced the price target to $260.
At the end of the fourth quarter of 2020, 65 hedge funds in the database of Insider Monkey held stakes worth $3.96 billion in Becton, Dickinson and Company (NYSE: BDX) which is an increase from 62 hedge funds in the previous quarter holding stakes worth $1.94 billion.
2. Johnson & Johnson (NYSE: JNJ)
Number of Hedge Fund Holders: 81
Dividend Yield: 2.49%
Drug manufacturer Johnson & Johnson (NYSE: JNJ) ranks 2nd in our list of 10 best aristocrat dividend stocks to buy. The New Jersey-based pharmaceutical corporation owns products under Tylenol, Zyrtec, Benadryl, and Sudafed. In addition, the company owns health consumer goods namely Clean & Clear, Neutrogena, and Aveeno. The healthcare giant raised its dividend by 5% to $1.06 per share in April 2021, extending its 59-year streak of annual dividend growth. Johnson & Johnson maintains a payout ratio of 70.36%.
The company has a market cap of $448 billion. The company’s revenue in the first quarter of 2021 was $22.3 billion, an increase of 7.9% from $20.7 billion in the first quarter of 2020. Shares of JNJ increased 15% over the past twelve months. Twelve Wall Street analysts rated Johnson & Johnson as a “Buy” with a $185.18 price target.
At the end of the fourth quarter of 2020, 81 hedge funds in the database of Insider Monkey held stakes worth $1.37 billion in Johnson & Johnson (NYSE: JNJ). Peter Rathjens, Bruce Clarke, And John Campbell’s Arrowstreet Capital own 9,004,994 shares of the firm worth $1.48 billion.
1. The Procter & Gamble Company (NYSE: PG)
Number of Hedge Fund Holders: 83
Dividend Yield: 2.52%
Topping the list of the 10 best aristocrat dividend stocks to buy is international branded products distributor Procter & Gamble Company (NYSE: PG). The Ohio-based firm owns consumer goods brands including Oral-B, Gillette, Downy, Mr. Clean, Vicks, and Pampers to name a few. The Procter & Gamble Company (NYSE: PG) has increased its annual dividend for 65 years in a row and maintains a fair payout ratio of 57%. The company last increased its payout in April 2021 by 10% to $0.87 per share. In fiscal 2021, P&G plans to pay out more than $8 billion in dividends.
The Procter & Gamble Company (NYSE: PG) has a market cap of $338 billion. The company’s revenue in the third quarter of 2021 came in at $18.1 billion. Net income increased to $3.27 billion, or $1.26 per share, for the third quarter ended March 31, up from $2.92 billion, or $1.12 per share, a year earlier. Shares of PG climbed 20% over the past twelve months. On April 21, Deutsche Bank maintained its “Buy” rating on The Procter & Gamble Company with a lower price target of $158 per share.
At the end of the fourth quarter of 2020, 83 hedge funds in the database of Insider Monkey held stakes worth $10.4 billion in The Procter & Gamble Company (NYSE: PG) which is an increase from 75 hedge funds in the previous quarter holding stakes worth $10.1 billion.
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