{"id":10557,"date":"2022-08-15T17:58:31","date_gmt":"2022-08-15T22:58:31","guid":{"rendered":"http:\/\/blog.jlbn.net\/?p=10557"},"modified":"2022-08-15T17:58:32","modified_gmt":"2022-08-15T22:58:32","slug":"5-dividend-aristocrats-that-might-be-a-great-addition-to-your-portfolio","status":"publish","type":"post","link":"http:\/\/blog.jlbn.net\/?p=10557","title":{"rendered":"5 Dividend Aristocrats That Might be a Great Addition to Your Portfolio"},"content":{"rendered":"\n<p>Consistent&nbsp;<a href=\"https:\/\/timthomas.co\/what-is-dividend-investing\/\">dividend paying companies<\/a>, known as Dividend Aristocrats, are relatively uncommon and typically have stable businesses.&nbsp;<\/p>\n\n\n\n<p>They often produce recession-proof goods, enabling them to continue making profits and paying dividends even when other companies struggle. They\u2019ve proven themselves to pay dividend irrespective of market conditions, even during&nbsp;<a href=\"https:\/\/timthomas.co\/high-dividend-stocks-for-a-bear-market\/\">bearish markets<\/a>.<\/p>\n\n\n\n<p>In the S&amp;P500, investors have the choice of about&nbsp;<a target=\"_blank\" href=\"https:\/\/www.fool.com\/investing\/stock-market\/types-of-stocks\/dividend-stocks\/dividend-aristocrats\/\" rel=\"noreferrer noopener\">65 Dividend Aristocrats<\/a>.<\/p>\n\n\n\n<p>In this article, we have compiled the five best dividend aristocrats that should be on an investor\u2019s checklist.<\/p>\n\n\n\n<h2>What are Dividend Aristocrats?<\/h2>\n\n\n\n<p>Dividend Aristocrats are firms with a track record of increasing shareholder payouts for at least 25 consecutive years. They should be distinguished from&nbsp;<a href=\"https:\/\/timthomas.co\/dividend-kings\">Dividend Kings<\/a>&nbsp;which have a 50 year track record.<\/p>\n\n\n\n<p>Most Aristocrats are large-cap blue-chip companies with long histories of profitability and growth, consistent earnings, and strong balance sheets. As a result, they can:<\/p>\n\n\n\n<ul><li>Pay secure, generally well-covered dividends.<\/li><li>Raise their payouts consistently.<\/li><li>Offer an opportunity for significant price gains than bonds deliver typically.<\/li><\/ul>\n\n\n\n<h2>Top 5 Dividend Aristocrats<\/h2>\n\n\n\n<p>Dividend Aristocrats are among the most well-liked stocks on the market for a reason.&nbsp;<\/p>\n\n\n\n<p>Only the most resilient, profitable companies can continue such a trend.<\/p>\n\n\n\n<p>However, some Dividend Aristocrats have more advantages than that exceptional threshold. Here are five this year that stand to gain a lot from current and prospective trends.<\/p>\n\n\n\n<h3>1) McDonald\u2019s (NYSE: MCD)<\/h3>\n\n\n\n<p>The traditional American burger establishment has effectively managed to&nbsp;<a href=\"https:\/\/fortune.com\/2020\/11\/09\/mcdonalds-covid-growth-strategy-chicken-sandwich-loyality-program-drive-thru\/\" target=\"_blank\" rel=\"noreferrer noopener\">weather&nbsp;the pandemic<\/a>&nbsp;and the global movement toward healthier dining options.<\/p>\n\n\n\n<p>The company has maintained exceptional growth on both the top and bottom lines, demonstrating what an innovative and effective operator it is.<\/p>\n\n\n\n<p>McDonald\u2019s introduced several&nbsp;<a href=\"https:\/\/www.grin.com\/document\/269111\" target=\"_blank\" rel=\"noreferrer noopener\">healthier&nbsp;menu items<\/a>&nbsp;years ago to beat competition from health-food vendors. Today, many of the options are well-liked by customers.<\/p>\n\n\n\n<p>Due to its robust technology, McDonald\u2019s was better able to withstand the pandemic\u2019s challenges than most food companies.<\/p>\n\n\n\n<p>Owing to intermittent closures due to the global pandemic, its drive-thru facilities have been improved, making it a convenient option for customers who don\u2019t want to or can\u2019t eat inside restaurants.<\/p>\n\n\n\n<p>As in-restaurant dining becomes the norm again, technologies like the&nbsp;<a href=\"https:\/\/www.touchbistro.com\/blog\/why-self-ordering-kiosks-are-becoming-the-secret-weapon-for-successful-restaurants\/\" target=\"_blank\" rel=\"noreferrer noopener\">self-ordering kiosks<\/a>&nbsp;inside its restaurants should make the McDonald\u2019s experience even faster and more effective.<\/p>\n\n\n\n<p>The drive-thru should also remain a popular destination for motorists looking for a fast dinner, lunch, or coffee pickup.<\/p>\n\n\n\n<p>McDonald\u2019s appears to be on track to have an excellent 2022 full of growth, as it has in many previous years.<\/p>\n\n\n\n<p>The S&amp;P 500\u2019s yield is&nbsp;1.3%, while the company\u2019s quarterly dividend of&nbsp;<a href=\"https:\/\/seekingalpha.com\/article\/4479458-mcdonalds-no-better-than-hold\" target=\"_blank\" rel=\"noreferrer noopener\">$1.13&nbsp;per share is slightly under&nbsp;2.1%<\/a>. It\u2019s not an exceptional yield but McDonald\u2019s has been included in this list of Dividend Aristocrats because of the strength of its business model and hugely recognizable brand.<\/p>\n\n\n\n<h3>2) AT&amp;T (NYSE: T)<\/h3>\n\n\n\n<p>Another recognizable name on our list of Dividend Aristocrats is AT&amp;T. The last few months has seen the stock undervalued but it\u2019s well-positioned to make a comeback.<\/p>\n\n\n\n<p>AT&amp;T is evolving into a leaner, more focused company while the&nbsp;<a href=\"https:\/\/timthomas.co\/5g-stocks\/\" target=\"_blank\" rel=\"noreferrer noopener\">5G upgrade<\/a>&nbsp;cycle is picking up.<\/p>\n\n\n\n<p>This technology should enable AT&amp;T to sell more premium plans and devices compatible with the technology and increase customers\u2019 time viewing videos and browsing the Internet.<\/p>\n\n\n\n<p>The company is currently trying to dispose of its entertainment&nbsp;<a href=\"https:\/\/timthomas.co\/content-syndication\/\">content business<\/a>&nbsp;for many years but has never entirely integrated with its primary telecom operations.<\/p>\n\n\n\n<p>AT&amp;T will use a significant portion of the money received from the sale to reduce its debt, which stood at\u00a0<a rel=\"noreferrer noopener\" href=\"https:\/\/www.nasdaq.com\/articles\/better-telecom-dividend-stock%3A-verizon-or-att\" target=\"_blank\">over\u00a0$177\u00a0billion<\/a>\u00a0as of September 2021.<\/p>\n\n\n\n<p>The profit and loss statement\u2019s interest expenses will decrease when those borrowings reduce, resulting in increased profitability.<\/p>\n\n\n\n<p>The strategy means the stock is one of the Dividend Aristocrats that might receive renewed interest from many investors who have been holding back.<\/p>\n\n\n\n<p>The current AT&amp;T&nbsp;<a href=\"https:\/\/seekingalpha.com\/news\/3780768-t-inc-declares-312_50-dividend\" target=\"_blank\" rel=\"noreferrer noopener\">quarterly dividend is&nbsp;$0.52<\/a>. AT&amp;T has declared that it will cut its dividend following the spinoff to allocate more money to debt servicing.<\/p>\n\n\n\n<p>If the cut takes place, the stock will no longer be an artistocrat but we\u2019ve included the name here because investors can expect the company to at least keep the payout competitive; AT&amp;T is well aware of how vital a sizable payout is to the attraction of its shares.&nbsp;<\/p>\n\n\n\n<p>According to some estimates, the dividend will be&nbsp;<a href=\"https:\/\/www.cnbc.com\/2022\/02\/04\/att-ceo-says-dividend-cut-reflects-shift-to-put-more-cash-back-into-the-business.html\" target=\"_blank\" rel=\"noreferrer noopener\">reduced to about&nbsp;$0.29<\/a>, yielding close to 4.6%.<\/p>\n\n\n\n<h3>3) Realty Income (NYSE: O)<\/h3>\n\n\n\n<p>Realty Income is one of the more attractive Dividend Aristocrats; Unusually, it pays dividends monthly instead of the once-per-quarter scheme.<\/p>\n\n\n\n<p>It makes&nbsp;<a href=\"https:\/\/www.realtyincome.com\/investors\/press-releases\/realty-income-announces-operating-results-three-and-nine-months-ended\" target=\"_blank\" rel=\"noreferrer noopener\">millions of dollars<\/a>&nbsp;annually, allowing it to share its profits often with investors.<\/p>\n\n\n\n<p>Realty Income, a leading retail&nbsp;<a href=\"https:\/\/timthomas.co\/reit\/\">REIT<\/a>, manages a sizable portfolio of retail locations across the United States and, increasingly, abroad.<\/p>\n\n\n\n<p>Hence, it receives a flood of rent payments 12 times annually.<\/p>\n\n\n\n<p>And because a typical Realty Income lease is lengthy and requires small but regular annual increases, the revenues only grow stronger.<\/p>\n\n\n\n<p>Additionally, this well-run business regularly increases its reach with new leasable spaces.<\/p>\n\n\n\n<p>All of these factors have allowed Realty Income\u2019s revenue and cash flow, or \u201cfunds from operations,\u201d to continue increasing despite the hurdles posed by the pandemic, which severely impacted the retail industry.<\/p>\n\n\n\n<p>The monthly payout is less than&nbsp;<a href=\"https:\/\/www.realtyincome.com\/investors\/stock-information\/dividend-payment-information\" target=\"_blank\" rel=\"noreferrer noopener\">$0.25&nbsp;per share<\/a>, offering a reasonable yield of over 4.2%. Realty Income announced&nbsp;five&nbsp;dividend increases for 2021.<\/p>\n\n\n\n<h3>4) Johnson and Johnson (NYSE: JNJ)<\/h3>\n\n\n\n<p>As always, do your&nbsp;<a href=\"https:\/\/timthomas.co\/best-investing-books\/\">own research<\/a>&nbsp;but one of the less risky equities is Johnson &amp; Johnson.<\/p>\n\n\n\n<p>The business is&nbsp;<a href=\"https:\/\/seekingalpha.com\/article\/4519987-5-dividend-aristocrats-buys-and-5-dividend-aristocrats-to-avoid\" target=\"_blank\" rel=\"noreferrer noopener\">well-diversified<\/a>&nbsp;across three sectors, and none of them\u2014pharma, medical technology, and consumer staples\u2014perform particularly poorly under any given set of circumstances.<\/p>\n\n\n\n<p>Additionally, Johnson &amp; Johnson is one of only two businesses worldwide with a\u00a0<a rel=\"noreferrer noopener\" href=\"https:\/\/seekingalpha.com\/article\/4501005-johnson-and-johnson-this-low-risk-high-growth-and-highly-credible-stock-is-a-strong-buy\" target=\"_blank\">triple-A rating<\/a>, indicating that the financial risks are extremely low.<\/p>\n\n\n\n<p>Quality typically comes at a cost, so the fact that Johnson &amp; Johnson has, on average, trading at a&nbsp;<a href=\"https:\/\/www.nasdaq.com\/articles\/should-you-buy-johnson-johnson-stock-at-%24177\" target=\"_blank\" rel=\"noreferrer noopener\">22x&nbsp;earnings<\/a>multiple over the past ten years is not all that surprising.<\/p>\n\n\n\n<p>However, with the&nbsp;<a href=\"https:\/\/timthomas.co\/current-stock-market\/\">current stock market<\/a>&nbsp;downturn, investors can purchase J&amp;J for a&nbsp;17x&nbsp;earnings multiple; so the shares sell at a significant discount to their historical average.<\/p>\n\n\n\n<p>The dividend yield has&nbsp;<a href=\"https:\/\/www.prnewswire.com\/news-releases\/johnson--johnson-announces-dividend-increase-of-6-6-301527648.html\" target=\"_blank\" rel=\"noreferrer noopener\">increased to&nbsp;2.6%<\/a>&nbsp;due to the company\u2019s recent dividend increase.<\/p>\n\n\n\n<p>That\u2019s not incredibly high, but significantly more than one may obtain from the general market while also assuming substantially less risk.<\/p>\n\n\n\n<h3>5) Chevron (NYSE: CVX)<\/h3>\n\n\n\n<p>Chevron is one of the worldwide supermajors in the oil and gas sector. It owns substantial upstream, downstream, refining, and marketing assets.<\/p>\n\n\n\n<p>Due to its significant exposure to the production and selling of liquified natural gas, the company gains a lot from&nbsp;<a href=\"https:\/\/timthomas.co\/record-gas-prices\/\">high natural gas price<\/a>s in various international markets, including Europe and some regions of Asia.<\/p>\n\n\n\n<p>Although shares have increased this year, they pulled back meaningfully from their recent highs of around&nbsp;<a href=\"https:\/\/finance.yahoo.com\/news\/chevron-stock-could-reclaim-former-170921837.html\" target=\"_blank\" rel=\"noreferrer noopener\">$182.40.<\/a>&nbsp;<\/p>\n\n\n\n<p>Earnings will be exponential this year, as high oil prices, natural gas prices, and sizable refining margins make for a proper mix to\u00a0<a rel=\"noreferrer noopener\" href=\"https:\/\/www.reuters.com\/business\/energy\/chevron-profit-nearly-quadruples-oil-prices-surge-2022-04-29\/\" target=\"_blank\">boost profits<\/a>\u00a0at Chevron and its peer group.<\/p>\n\n\n\n<p>Over the past year, shares have become less costly, trading at an enterprise value to EBITDA ratio of under 5.<\/p>\n\n\n\n<p>Additionally, it is 30% below the longer-term median, indicating that the current share price already accounts for a significant profit decrease.&nbsp;<\/p>\n\n\n\n<p>However, if&nbsp;<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2022-01-06\/goldman-bullish-on-commodities-seeing-years-long-supercycle\" target=\"_blank\" rel=\"noreferrer noopener\">Goldman Sachs<\/a>&nbsp;and other experts are correct, we are only at the beginning of a supercycle in commodities.<\/p>\n\n\n\n<p>Earnings may increase more in 2023 and beyond. In that scenario, Chevron could keep generating significant returns through buybacks, earnings growth, and a&nbsp;<a href=\"https:\/\/finance.yahoo.com\/news\/7-large-cap-stocks-sustained-100148776.html'\" target=\"_blank\" rel=\"noreferrer noopener\">dividend yield of&nbsp;3.9%<\/a>.<\/p>\n\n\n\n<h2>Final Word: Dividend Aristocrats<\/h2>\n\n\n\n<p>Due to their propensity to beat the general market in difficult times, Dividend Aristocrats can be a great addition to a portfolio.<\/p>\n\n\n\n<p>That appears to have some use in the upcoming months, given the challenging macroeconomic climate created by\u00a0<a href=\"https:\/\/timthomas.co\/stop-inflation-hurting-your-wealth\/\">inflation<\/a>, a probable recession, interest rate concerns, and supply chain disruptions.<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Consistent&nbsp;dividend paying companies, known as Dividend Aristocrats, are relatively uncommon and typically have stable businesses.&nbsp; They often produce recession-proof goods,<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[254,3421,3422],"tags":[3477,3431,888,3425],"_links":{"self":[{"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/posts\/10557"}],"collection":[{"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10557"}],"version-history":[{"count":1,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/posts\/10557\/revisions"}],"predecessor-version":[{"id":10558,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/posts\/10557\/revisions\/10558"}],"wp:attachment":[{"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10557"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10557"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10557"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}