Dividend Aristocrats 2024: The Crème de la Crème of Income Investing

Stocks to buy

Dividend Aristocrats—companies listed on the S&P 500 that have increased their dividends for at least 25 consecutive years—can be a good option for investors looking for income and growth. They are often considered reliable income sources and indicate a company’s financial health.

Yet that’s not the only consideration when buying stocks. Investors must consider other factors, like their ability to pay and grow the dividends in the future, their current evaluations, and, of course, analyst recommendations, to guide their decisions.

Let’s look at the three highest-rated Dividend Aristocrats right now. 

S&P Global Inc. (SPGI)

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S&P Global Inc. (NYSE:SPGI) is the industry’s leading financial solutions provider. The company offers different tools and services through its segments, such as market intelligence, ratings, commodity insights, mobility, etc. Each segment specializes in a particular market area.

S&P Global has been paying dividends for a very long time—over 87 years, to be specific. What’s more impressive is that the company has increased those dividends yearly for at least the past 51 years—making it a newly minted Dividend King. Its annual dividend is currently $3.64 per share, representing an approximate 0.85% yield. The company’s next quarterly dividend payment of $0.91 per share is coming up on March 12th. 

In its most recent quarter, S&P Global reported solid YoY growth numbers. Revenue was up 7% to $3.15 billion, net income jumped 30% to $644 million, operating profit increased 24% to $890 million and diluted earnings per share spiked 38% to $1.83. It’s no surprise analysts are giving SPGI stock a “Strong Buy” rating with targets as high as $530—that’s over 20% upside potential for investors looking at this Dividend Aristocrat. 

Walmart (WMT)

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One company that needs no introduction is Walmart (NYSE:WMT), the giant retail chain with supercenters, grocery stores and membership clubs like Sam’s Clubs all over the place. Walmart is pretty much everywhere, and it even has websites and apps that sell all kinds of items—groceries, household items, you name it, they got it. It also has gas stations and banking services and is getting into healthcare now. 

Speaking of expanding business, Walmart just announced the acquisition of VIZIO Holding Corp. for $2.3 billion, or $11.50 per share. The plan is to utilize VIZIO’s SmartCast tech to boost Walmart’s advertising capabilities through its Walmart Connect platform.

If there’s competition for paying dividends, Walmart is a solid contender. It’s been paying its shareholders consistently for 51 years, increasing dividend rates yearly. On Feb 20, 2024, Walmart raised its annual dividend to $0.83 per share (on a post-split basis), which reflects an approximate 1.38% yield—on the lower side for Dividend Aristocrats.

The next dividend payment of $0.2075 per share is coming up on April 1, 2024, for shareholders as of the March 15th, 2024, record date.

Walmart had mixed performance numbers-wise in the recent quarter. Total revenue was up 5.7% YoY to $173.4 billion, but net income and earnings per share fell by 12.4% and 12.5%, respectively. On the plus side, operating income jumped 30.4% to $7.25 billion, and gross margins improved by 39bps. It also generated $15.1 billion in free cash flow for the year and bought back $2.8 billion shares.

Despite the quarterly ups and downs, analysts still rate WMT a “Strong Buy” with price targets as high as $228 per share—a 280% potential upside from this retail giant.

Emerson Electric (EMR)

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Emerson Electric (NYSE:EMR) is a technology and software company that serves various global industries. The company operates in six distinct segments:

  • Final Control: provides valves and regulators for industrial clients,
  • Measurement & Analytical: offers pressure and temperature measuring equipment,
  • Discrete automation: supplies valves, cylinders and other automated solutions,
  • Safety & Productivity: markets tools for homeowners and professionals that promote safety and productivity,
  • Control Systems: covers software and cyber security and finally,
  • Aspentech: offers process optimization software for industrial-scale operations.

In a recent development, Emerson Electric Company secured a partnership with SungEel HiTech Co., Ltd., which recycles lithium-ion batteries. Emerson will supply automation solutions to equip Korea’s largest lithium-ion battery recycling facility. This collaboration aims to improve operations and create a resource cycle for batteries used in electric vehicles.

Emerson Electric Company has increased dividends every year for over 67 years. The current annual dividend sits at $2.10 per share, representing an approximate yield of 1.91%. 

EMR also reported satisfactory results for the first quarter, with a 22% net sales growth of $4.12 billion. Net earnings may have declined to $142 million or 93.91% YoY, mainly due to “one-offs” from discontinued operations. Adjusted EPS increased by 56% to $1.22, and operating cash flow increased by 47% to $444 million. On top of that, analysts are still confident about the company, maintaining a “Strong Buy” rating on its stocks and a high target price that indicates over 18% upside potential.

On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.

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