In this article, we will take a look at some of the best dividend aristocrat stocks according to yields.
When it comes to investing in stocks, investors are always on the lookout for companies that can deliver steady income. That’s why dividend stocks have always been a favorite. Among these, companies with the ability to grow their dividends consistently tend to be the ones that come out on top. Dividend aristocrats are companies that have consistently increased their dividends for 25 years or more. Achieving this is no small accomplishment. Paying regular dividends can be challenging for many companies, let alone raising them for over two decades.
Dividend aristocrats have delivered strong returns, outperforming other asset classes. According to a report by S&P Dow Jones Indices, from the index’s launch in 2005 through September 2023, the dividend aristocrats index achieved a total return of 10.35%, surpassing the broader market’s 9.54% return over the same period. These stocks are praised for not only their consistent dividend growth and steady equity gains but also their lower volatility. Over this time, dividend aristocrats experienced a volatility rate of 15.35%, compared to the market’s slightly higher 16.31%. This suggests that dividend aristocrats generally exhibit more stable price movements. Their long history of increasing dividends for 25 years or more shows their ability to reward shareholders even during challenging times, such as the 2007 financial crisis and the 2020 pandemic.
A report from Thornburg Investment Management compares the income generated from a hypothetical $1 million investment in the Bloomberg US Aggregate Bond Index versus the Dividend Aristocrats Index from 1990 to 2023. The findings showed that the income from the $1 million investment in the Bloomberg US Aggregate Bond Index decreased from around $90,000 annually in 1990 to just under $37,000 in 2023. In contrast, the income from the Dividend Aristocrats Index grew significantly, rising from about $30,000 in 1990 to more than $400,000 in 2023. The report also highlighted that dividend aristocrats outperformed the market in four of the six five-year periods between 1990 and 2023. This consistent outperformance, coupled with more stable returns, demonstrates the index’s ability to deliver strong results over time.
Also read: 10 Best Dividend Aristocrat Stocks To Buy Right Now
The debate between high yields and dividend growth remains ongoing. Many investors believe that high yields are not necessarily risky. Achieving 25 consecutive years of dividend growth doesn’t require sacrificing yield. According to a report by S&P Dow Jones Indices, Dividend Aristocrats have consistently provided higher yields than the broader market, typically ranging from 2.0% to 2.9% over the 26-year period from 1998 to 2022.
Some studies have emphasized the long-term advantages of high-yield stocks, noting that as dividend yields rise, both returns tend to improve and risk decreases. Hartford Funds recently conducted an in-depth analysis of this, considering annualized standard deviation, which measures the volatility of a portfolio’s returns. A higher standard deviation indicates greater historical volatility. According to the findings, from December 1969 to March 2024, high-dividend portfolios produced an annualized return of 12.3%, mid-dividend portfolios returned 10.5%, and low-dividend portfolios earned 9.7%. The annualized standard deviations for these portfolios were 14.1%, 16%, and 20.8%, respectively.
In view of this, we will discuss some of the best dividend aristocrat stocks according to yields.
Our Methodology:
For this list, we looked at a group of 67 dividend aristocrat companies, which are known for raising dividends for 25 years or more. From this list, we chose 7 stocks with the highest dividend yields as of November 26 and arranged them in order from lowest to highest yield. We also measured hedge fund sentiment around each stock according to Insider Monkey’s database of 900 as of Q3 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).
7. Archer-Daniels-Midland Company (NYSE:ADM)
Dividend Yield as of November 26: 3.77%
Archer-Daniels-Midland Company (NYSE:ADM) is an American multinational food company that specializes in food processing and commodities trading. The company couldn’t satisfy investors with its recent quarterly earnings. In the third quarter of 2024, it reported revenue of $20 billion, which fell by over 8% from the same period last year. The revenue missed analysts’ expectations by $1.57 billion. That said, the company expects market conditions to weaken in the coming year but is taking steps to boost performance and drive value creation. It is also focusing on improving productivity and operational efficiency while maintaining a disciplined approach to capital allocation.
Archer-Daniels-Midland Company (NYSE:ADM) focuses on converting crops into products used for food, animal feed, industrial applications, and energy. As a major player in the global agricultural industry, it oversees an extensive network for sourcing, transporting, and processing a wide range of agricultural goods. Its operations involve navigating complex supply chains while meeting the varied demands of the market. Since the start of 2024, the stock has fallen by over 27%.
Despite these challenges, Archer-Daniels-Midland Company (NYSE:ADM) generated sufficient cash to meet its shareholder demand. In the first nine months of the year, the company reported an operating cash flow of approximately $2.5 billion, up from $1.9 billion in the prior-year period. It is one of the best dividend aristocrat stocks with 51 consecutive years of dividend growth under its belt. The company pays a quarterly dividend of $0.50 per share and has a dividend yield of 3.77%, as of November 26.
At the end of Q3 2024, 34 hedge funds tracked by Insider Monkey held stakes in Archer-Daniels-Midland Company (NYSE:ADM), compared with 35 in the previous quarter. The collective value of these stakes is over $556.5 million. AQR Capital Management owned the largest stake in the company, worth $132 million.
6. Federal Realty Investment Trust (NYSE:FRT)
Dividend Yield as of November 26: 3.79%
Federal Realty Investment Trust (NYSE:FRT) is a Maryland-based real estate investment trust company that mainly invests in shopping centers and other entertainment properties. The company functions like a standard REIT but stands out due to its unique strategy. Rather than amassing a large portfolio of properties, it prioritizes quality over quantity. As of September 2024, it owned only 102 properties, all located in highly desirable areas. FRT targets acquisitions in and around major metropolitan regions with dense populations and high-income levels. This approach has proven beneficial, as demonstrated during the pandemic when, unlike many properties facing occupancy challenges, Federal Realty drew tenants relocating from nearby sites to secure space in its prime locations.
Federal Realty Investment Trust (NYSE:FRT) reported revenue of $303.3 million in the third quarter of 2024, which showed a 6% growth from the same period last year. The revenue surpassed analysts’ estimates by $1.85 million. The company secured 126 leases covering 580,977 square feet of comparable retail space, achieving a 14% increase in cash-based rents and a 26% rise on a straight-line basis. Its net income available for common shareholders jumped to $58.9 million, from $55 million in the prior-year period.
On October 30, Federal Realty Investment Trust (NYSE:FRT) declared a quarterly dividend of $1.10 per share, which was in line with its previous dividend. Overall, the company maintains a 56-year streak of consistent dividend growth, which makes FRT one of the best dividend aristocrat stocks on our list. The stock’s dividend yield on November 26 came in at 3.79%.
The number of hedge funds tracked by Insider Monkey holding stakes in Federal Realty Investment Trust (NYSE:FRT) grew to 36 in Q3 2024, from 24 in the previous quarter. The consolidated value of these stakes is nearly $302 million.
5. T. Rowe Price Group, Inc. (NASDAQ:TROW)
Dividend Yield as of November 26: 4.03%
T. Rowe Price Group, Inc. (NASDAQ:TROW) ranks fifth on our list of the best dividend aristocrat stocks. The American asset management company offers a wide range of related services to individuals, institutions, and businesses. It reported mixed earnings in the third quarter of 2024. The company’s revenue came in at $1.8 billion, which, though, saw a 7% hike from the same period last year, missed analysts’ estimates by over $61 million. It ended the quarter with over $1.63 trillion in assets under management, up from $1.34 trillion in the prior-year period.
T. Rowe Price Group, Inc. (NASDAQ:TROW) has traditionally excelled in mutual funds, a product category now facing competition from ETFs and alternative assets. This trend has raised concerns among investors. However, the company benefits from loyal assets and is actively adapting to align with shifting customer preferences. This indicates that the company is positioned to navigate the evolving industry landscape effectively. With no long-term debt on its balance sheet, it has the financial strength to restructure and refine its business strategy. The stock has surged by over 14% since the start of 2024.
T. Rowe Price Group, Inc. (NASDAQ:TROW) currently offers a quarterly dividend of $1.24 per share, having raised it by 1.6% earlier this year. The company has been rewarding shareholders with growing dividends for the past 38 consecutive years. With a dividend yield of 4.03%, as of November 26, TROW is one of the best dividend aristocrat stocks on our list.
As per Insider Monkey’s database of Q3 2024, 26 hedge funds held stakes in T. Rowe Price Group, Inc. (NASDAQ:TROW), down from 28 a quarter earlier. These stakes are worth $422.6 million in total. Fisher Asset Management owned 2 million TROW shares, becoming the company’s leading stakeholder in Q3.
4. Chevron Corporation (NYSE:CVX)
Dividend Yield as of November 26: 4.07%
Chevron Corporation (NYSE:CVX) is a California-based energy company that specializes in oil and gas. It is one of the best dividend aristocrat stocks with a 37-year streak of consistent dividend growth. Currently, the company offers a quarterly dividend of $1.63 per share and has a dividend yield of 4.07%, as of November 26.
Chevron Corporation (NYSE:CVX) has grown into one of the world’s leading energy enterprises over time. It commits billions each year to expand its operations, leveraging both organic growth and acquisitions. These investments fuel business expansion while boosting profitability and cash flow. In the third quarter of 2024, the company generated $9.7 billion in operating cash flow, which grew from $6.3 billion in the previous quarter. It returned $7.7 billion to shareholders through dividends and share repurchases during the quarter.
Chevron Corporation (NYSE:CVX) reported strong earnings in the third quarter of 2024, with revenues amounting to $50.67 billion. The revenue surpassed analysts’ estimates by $1.63 billion. The company also achieved a 7% increase in global production from the previous year, bringing output to nearly 3.4 million barrels of oil equivalent per day (BOE/d). This growth was fueled by record production in the Permian Basin and the acquisition of PDC Energy.
Chevron Corporation (NYSE:CVX) was a part of 63 hedge fund portfolios at the end of Q3 2024, compared with 64 in the previous quarter, as per Insider Monkey’s database. The stakes held by these hedge funds have a consolidated value of over $21 billion. With nearly 119 million shares, Warren Buffett’s Berkshire Hathaway owned the largest stake in the company.
3. Amcor plc (NYSE:AMCR)
Dividend Yield as of November 26: 4.87%
Amcor plc (NYSE:AMCR) is a global multinational packaging company that offers a wide range of related products for different industries. The company has recently announced plans to acquire its US competitor, Berry Global, in an all-stock deal valued at $8.43 billion. The merger will create a major player in the consumer and healthcare packaging sector, with combined revenues of $24 billion. This move comes as the industry experiences consolidation following a sharp decline in demand for packaging materials, which had surged during the e-commerce boom of the pandemic. This acquisition marks Amcor’s largest to date. Previously, in 2019, the company acquired US rival Bemis for $5.25 billion in an all-stock deal, though it had to sell three manufacturing facilities to secure approval from the US Justice Department. AMCR surged by nearly 5% following the announcement.
In fiscal Q1 2025, Amcor plc (NYSE:AMCR) reported revenue of $3.35 billion, which fell slightly by 2.6% from the same period last year. Overall, the company began fiscal 2025 on a strong note, driven by improving volume growth and customer demand trends. Adjusted EPS increased by 5%, with both the Flexibles and Rigid Packaging segments contributing to this performance. The growth was supported by sequential volume gains and a consistent emphasis on cost management and maintaining margin quality.
On November 1, Amcor plc (NYSE:AMCR) declared a 2% hike in its quarterly dividend to $0.1275 per share. Through this increase, the company stretched its dividend growth streak to 41 years. The stock has a dividend yield of 4.87%, as of November 26, which makes AMCR one of the best dividend aristocrat stocks on our list.
Insider Monkey’s database of Q3 2024 indicated that 18 hedge funds owned stakes in Amcor plc (NYSE:AMCR), down from 21 in the previous quarter. These stakes are valued at $183.5 million. Among these hedge funds, Cliff Asness’ AQR Capital Management was the company’s leading stakeholder in Q3.
2. Franklin Resources, Inc. (NYSE:BEN)
Dividend Yield as of November 26: 5.46%
Franklin Resources, Inc. (NYSE:BEN) ranks second on our list of the best dividend aristocrat stocks. The American multinational asset management company offers a wide range of related services and products to shareholders. The stock has dropped more than 27% since the beginning of 2024, which isn’t entirely unexpected given its inconsistent past performance. However, the company has evolved significantly over time. Through strategic acquisitions, such as last year’s purchase of the options-trading technology firm volScout, this mutual fund leader is now better positioned to meet the growing demands of both individual and institutional investors.
In the fourth quarter of 2024, Franklin Resources, Inc. (NYSE:BEN) reported revenue of $2.21 billion, which showed an 11.3% growth from the same period last year. The company achieved a record in assets under management (AUM), reaching $1.68 trillion, and experienced a 25% increase in long-term inflows, totaling $319 billion compared to the previous year. However, long-term net outflows amounted to $32.6 billion, which included $20.7 billion in reinvested distributions.
Franklin Resources, Inc. (NYSE:BEN) currently offers a quarterly dividend of $0.31 per share. The company has always remained committed to its shareholder obligation, as it returned $946 million to investors through dividends and share repurchases in the most recent quarter. Moreover, it has been growing its dividends consistently for the past 48 years. With a dividend yield of 5.46% as of November 26, BEN is one of the best dividend aristocrat stocks on our list.
As of the close of Q3 2024, 26 hedge funds tracked by Insider Monkey held stakes in Franklin Resources, Inc. (NYSE:BEN), compared with 27 in the preceding quarter. These stakes have a collective value of over $272.6 million. Cliff Asness, Israel Englander, and Paul Tudor Jones were some of the company’s most prominent stakeholders in Q3.
1. Realty Income Corporation (NYSE:O)
Dividend Yield as of November 26: 5.50%
Realty Income Corporation (NYSE:O) is an American real estate investment trust company that is popular among investors because of its monthly payouts. While the US market remains the largest within its portfolio, the company also invests in eight countries and continues to expand its presence, particularly within the European market. The stock has surged by over 6% in the past 12 months.
In the third quarter of 2024, Realty Income Corporation (NYSE:O) reported revenue of $1.27 billion, which showed a 27% hike from the same period last year. The revenue beat analysts’ estimates by over $10 million. The company has raised its 2024 investment volume guidance to about $3.5 billion and increased the lower end of its AFFO per share guidance to a range of $4.17 to $4.21 per share, indicating a 4.8% growth at the midpoint. Looking forward, it is exploring a variety of growth opportunities, including capital diversification efforts, to further expand the reach and scale of its established platform. Parnassus Investments highlighted Realty Income Corporation (NYSE:O) in its Q3 2024 investor letter. Here is what the firm has to say:
“Realty Income Corporation (NYSE:O) is poised to benefit from lower interest rates. Because its commercial tenants are mostly on 10-year leases, the stock’s steady dividend stream is attractive in the current environment of slow deceleration in the economy with rates coming down. In this favorable backdrop, the company also continues to execute well.”
Realty Income Corporation (NYSE:O) offers a monthly dividend of $0.2635 per share. The company has raised its dividends every year since it went public in 1994. The stock supports a dividend yield of 5.50%, as of November 26.
Realty Income Corporation (NYSE:O) remained popular among elite money managers in Q3 2024, with hedge fund positions in the company growing to 23, from 19 in the previous quarter, as per Insider Monkey’s database. The stakes held by these hedge funds have a collective value of $163.5 million.
Overall, Realty Income Corporation (NYSE:O) ranks first on our list of the best dividend aristocrat stocks. While we acknowledge the potential for O to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than O but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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