10 Safest Dividend Aristocrats For 2023

Up to date on December eleventh, 2023 by Bob Ciura

The Dividend Aristocrats are the ‘better of one of the best’ dividend development shares. The Dividend Aristocrats have an extended historical past of outperforming the market.

Dividend Aristocrats are elite firms that fulfill the next:

Are within the S&P 500 Index
Have 25+ consecutive years of dividend will increase
Meet sure minimal measurement & liquidity necessities

You may obtain an Excel spreadsheet with the total record of all 68 Dividend Aristocrats (with extra monetary metrics reminiscent of price-to-earnings ratios and dividend yields) by clicking the hyperlink beneath:

All Dividend Aristocrats are high-quality companies based mostly on their lengthy dividend histories. An organization can not pay rising dividends for 25+ years with out having a robust and sturdy aggressive benefit.

However not all Dividend Aristocrats make equally good investments as we speak. Some Dividend Aristocrats are higher than others, based mostly on the sustainability of their dividends.

That’s why, on this article, we now have analyzed the ten most secure Dividend Aristocrats from our Positive Evaluation Analysis Database with the most secure dividends based mostly on our Dividend Danger Rating score system.

The shares beneath are all Dividend Aristocrats with Dividend Danger Scores of ‘A’, the highest score, and with the bottom payout ratios.

Desk of Contents

Why The Payout Ratio Issues

The dividend payout ratio is solely an organization’s annual per-share dividend, divided by the corporate’s annual earnings-per-share. It’s a measure of the extent of earnings an organization distributes to its shareholders through dividends.

The payout ratio is a helpful investing metric as a result of it differentiates firms with low payout ratios which have a lot of room for dividend development, from firms with excessive payout ratios whose dividends will not be sustainable.

Certainly, analysis has proven that firms with increased dividend development have outperformed firms with decrease dividend development or no dividend development.

In analysis carried out by Ned Davis and Hartford Funds, it was discovered that dividend growers and initiators delivered complete returns of 10.24% per 12 months from 1973 via 2022, higher than the equal-weighted S&P 500’s efficiency of seven.68% per 12 months.

Curiously, the dividend growers and initiators analyzed on this research generated outperformance with much less volatility – a rarity and a contradiction to what fashionable educational monetary principle tells us.

A abstract of this analysis may be discovered beneath.

Supply: Hartford Funds – The Energy Of Dividends

Outperformance of two.56% yearly won’t look like a game-changer, however it actually is due to the surprise that’s compound curiosity.

Utilizing information from the identical piece of analysis, buyers who selected to take a position solely in dividend growers and initiators had been able to turning $100 into $13,061. Throughout the identical time interval, the S&P 500 index turned $100 into $4,043.

Supply: Hartford Funds – The Energy Of Dividends

Shares that didn’t pay dividends couldn’t match the efficiency of all varieties of dividend payers, turning $100 into $694 from 1973-2022. Dividend cutters and eliminators fared even worse, turning $100 into simply $74–that means these shares truly misplaced cash.

Because of this, buyers in search of shares with higher dividend development (and long-term return potential) may think about the Dividend Aristocrats with the bottom payout ratios.

Most secure Dividend Aristocrats #10: Sherwin-Williams (SHW)

Sherwin-Williams, based in 1866, is North America’s largest producer of paints and coatings.

The corporate distributes its merchandise via wholesalers in addition to retail shops (together with a sequence of greater than 4,900 company-operated shops and amenities) to 120 nations beneath the Sherwin-Williams title.

The corporate additionally manufactures Dutch Boy, Pratt & Lambert, Minwax, Thompson’s Waterseal, Krylon, Valspar (acquired in 2017), and different manufacturers.

Supply: Investor Presentation

On October twenty fourth, 2023, Sherwin-Williams launched Q3 outcomes for the interval ending September thirtieth, 2023. For the quarter, Sherwin-Williams generated income of $6.12 billion, a 1.1% enhance in comparison with Q3 2022. This was pushed by a 3.6% enhance within the Paint Shops Group, offset by a -4.0% decline within the Shopper Manufacturers Group, and a -1.0% decline within the Efficiency Coatings Group. Adjusted earnings-per-share equaled $3.20 versus $2.83 in Q3 2022.

Click on right here to obtain our most up-to-date Positive Evaluation report on SHW (preview of web page 1 of three proven beneath):

Most secure Dividend Aristocrats #9: Pentair plc (PNR)

Pentair is a pure-play water options firm that operates in 3 segments: Aquatic Techniques, Filtration Options, and Circulate Applied sciences. Pentair was based in 1966. Pentair has elevated its dividend for greater than 4 a long time in a row, when adjusted for spin-offs.

Pentair is without doubt one of the prime water shares.

Supply: Investor Presentation

Pentair reported its third quarter earnings outcomes on October 24. The corporate was capable of generate revenues of $1.0 billion throughout the quarter, which was 4% lower than the corporate’s revenues throughout the earlier 12 months’s quarter, a end result that also beat estimates simply.

Core gross sales, which excludes the influence of foreign money charge actions, acquisitions, and dispossessions, had been down 7% 12 months over 12 months, which was weaker than the common core income development charge over the past couple of quarters, throughout which Pentair reported constructive core gross sales development.

Click on right here to obtain our most up-to-date Positive Evaluation report on Pentair (preview of web page 1 of three proven beneath):

Most secure Dividend Aristocrats #8: Dover Company (DOV)

Dover Company is a diversified world industrial producer with annual revenues of practically $9 billion. Dover consists of 5 reporting segments: Engineered Techniques, Clear Power & Fueling, Pumps & Course of Options, Imaging & Identification, and Local weather & Sustainability Applied sciences. Barely greater than half of revenues come from the U.S., with the rest coming from worldwide markets.

On October twenty fourth, 2023, Dover introduced third quarter outcomes the interval ending September thirtieth, 2023. For the quarter, income decreased 0.2% to $2.15 billion, which was $70 million lower than anticipated. Adjusted earnings-per-share of $2.35 in contrast favorably to $2.25 within the prior 12 months and was $0.02 above estimates.

Click on right here to obtain our most up-to-date Positive Evaluation report on DOV (preview of web page 1 of three proven beneath):

Most secure Dividend Aristocrats #7: W.W. Grainger (GWW)

W.W. Grainger, headquartered in Lake Forest, IL, is without doubt one of the world’s largest business-to-business distributors of upkeep, restore, and operations (“MRO”) provides.

On October twenty sixth, 2023, W.W. Grainger reported its Q3 outcomes for the interval ending September thirtieth, 2023. Revenues got here in at $4.2 billion, up 6.7% on a reported foundation and up 8.7% on a day by day, fixed foreign money foundation (adjusted) in comparison with final 12 months. Outcomes had been pushed by stable efficiency throughout the board. The Excessive-Contact Options section achieved day by day gross sales development of 8.7% attributable to stable quantity development in all geographies.

Click on right here to obtain our most up-to-date Positive Evaluation report on GWW (preview of web page 1 of three proven beneath):

Most secure Dividend Aristocrats #6: Brown & Brown (BRO)

Brown & Brown Inc. is a number one insurance coverage brokerage agency that gives threat administration options to each people and companies, with a concentrate on property & casualty insurance coverage. Brown & Brown has a notably excessive degree of insider possession.

Brown & Brown posted third quarter earnings on October twenty third, 2023, and outcomes had been a lot better than anticipated on each the highest and backside strains. Adjusted earnings-per-share got here to 71 cents, which was 9 cents higher than expectations. Income was up nearly 15% year-over-year to $1.07 billion, and was $40 million forward of estimates. Natural income development was 9.6% throughout the quarter, and is 11% year-to-date.

Click on right here to obtain our most up-to-date Positive Evaluation report on BRO (preview of web page 1 of three proven beneath):

Most secure Dividend Aristocrats #5: Roper Applied sciences (ROP)

Roper Applied sciences is a specialised industrial firm that manufactures merchandise reminiscent of medical and scientific imaging gear, pumps, and materials evaluation gear. Roper Applied sciences additionally develops software program options for the healthcare, transportation, meals, power, and water industries. The corporate was based in 1981, generates  round $5.4 billion in annual revenues, and relies in Sarasota, Florida.

On October twenty fifth, 2023, Roper reported its Q3 outcomes for the interval ending September thirtieth, 2023. On a seamless operations foundation, quarterly revenues and adjusted EPS had been $1.56 billion and $4.32, indicating a year-over-year enhance of 24% and 18%, respectively.

Click on right here to obtain our most up-to-date Positive Evaluation report on ROP (preview of web page 1 of three proven beneath):

Most secure Dividend Aristocrats #4: Chubb Restricted (CB)

Chubb Ltd is a world supplier of insurance coverage and reinsurance providers headquartered in Zurich, Switzerland. The corporate offers insurance coverage providers together with property & casualty insurance coverage, accident & medical health insurance, life insurance coverage, and reinsurance.

For its fiscal third quarter, Chubb Ltd reported web written premiums of $13.1 billion, which was 9% greater than the web written premiums that Chubb generated throughout the earlier 12 months’s quarter. Web written premiums had been up 12% 12 months over-year within the firm’s World P&C enterprise unit, whereas different enterprise models reminiscent of Life noticed stable development as properly.

Chubb was capable of generate web funding earnings of $1.31 billion throughout the quarter, or $1.41 billion after changes, which was up by a pleasant 34% in comparison with the earlier 12 months’s interval.

Click on right here to obtain our most up-to-date Positive Evaluation report on Chubb (preview of web page 1 of three proven beneath):

Most secure Dividend Aristocrats #3: Nucor Corp. (NUE)

Nucor is the most important publicly traded US-based metal company. The metal business is notoriously cyclical, which makes Nucor’s streak of fifty consecutive years of dividend will increase much more exceptional.

On October 23, 2023, Nucor Company launched its third-quarter earnings report for 2023. The report revealed consolidated web earnings attributable to Nucor stockholders of $1.14 billion, or $4.57 per diluted share. This marked a lower from earnings of $1.46 billion in Q2 2023 and $1.69 billion or $6.50 per diluted share in Q3 2022. Consolidated web gross sales decreased by 8% to $8.78 billion.

The corporate additionally repurchased roughly 3.0 million shares of its widespread inventory at a median value of $168.99 per share throughout Q3 2023.

Click on right here to obtain our most up-to-date Positive Evaluation report on NUE (preview of web page 1 of three proven beneath):

Most secure Dividend Aristocrats #2: West Pharmaceutical Companies (WST)

West Pharmaceutical Companies manufactures packaging and parts concerned within the distribution and utility of prescription drugs. The corporate’s merchandise embody Zenith Crystal, a medical glass different, and SmartDose, an automated remedy supply system.

West Pharmaceutical Companies reported its third quarter earnings outcomes on October 26. The corporate reported that its revenues totaled $750 million, which represents a income enhance of 9% in comparison with the prior 12 months’s quarter.

West Pharmaceutical Companies’ revenues had been barely decrease than what the analyst neighborhood had anticipated, not like throughout the earlier quarter, when it met the consensus estimate. Revenues had been positively impacted by foreign money charge modifications throughout the interval, not like throughout the earlier quarter when there was no such influence.

Click on right here to obtain our most up-to-date Positive Evaluation report on WST (preview of web page 1 of three proven beneath):

Most secure Dividend Aristocrats #1: Albemarle Corp. (ALB)

Albemarle is the most important producer of lithium and second largest producer of bromine on the earth. The 2 merchandise account for practically two-thirds of annual gross sales. Albemarle produces lithium from its salt brine deposits within the U.S. and Chile. The corporate has two joint ventures in Australia that additionally produce lithium.

Associated: 2023 Lithium Shares Listing

Supply: Investor Presentation

On November 1st, 2023, Albemarle reported third quarter outcomes for the interval ending September thirtieth, 2023. For the quarter, income grew 10.5% to $2.31 billion, however missed estimates by $220 million. Adjusted earnings-per-share of $2.74 in contrast very unfavorably to $7.50 within the prior 12 months and was $1.00 beneath estimates.

Outcomes had been negatively impacted by decrease costs for lithium. For the quarter, income for Power Storage grew 20% to $1.7 billion. A 40% enhance in quantity was offset by decrease costs. Revenues for Specialties fell 20.2% to $352.7 million as volumes had been down 7% and realized costs declined 13%. Ketjen gross sales of $260.7 million had been a ten.6% enhance from the prior 12 months, once more attributable to increased costs.

Click on right here to obtain our most up-to-date Positive Evaluation report on Albemarle (preview of web page 1 of three proven beneath):

Remaining Ideas

Traders in search of high quality dividend development shares ought to begin their search with the Dividend Aristocrats, a choose group of 67 shares within the S&P 500 Index with a minimum of 25 consecutive years of dividend development.

Revenue buyers also needs to think about dividend security earlier than investing in dividend shares.

Thankfully, buyers do not need to sacrifice high quality when investing in dividend development shares. These 10 Dividend Aristocrats have have high-quality enterprise fashions, sturdy aggressive benefits, and protected dividend payouts that may face up to recessions.

Don’t miss the assets beneath for extra Dividend Aristocrats investing analysis.

And see the assets beneath for extra compelling funding concepts for dividend development shares and/or high-yield funding securities.