5 Dividend Aristocrat Stocks to Buy for 2018 With Market on Shaky Ground

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3M

This top industrial could really jump with an economic pickup, and only 19% of mutual funds currently hold the stock. 3M Co. (NYSE: MMM) is a diversified, global manufacturer. Its businesses are technology-driven and organized under five segments: Consumer, Safety and Graphics, Electronics and Energy, Healthcare, and Industrial. Its popular brands include Scotch, Post-It, 3M and Thinsulate. The company also holds over 500 U.S. patents.

The company announced in October that it has completed its acquisition of Scott Safety from Johnson Controls for a total enterprise value of $2.0 billion. Scott Safety is a premier manufacturer of innovative products, including self-contained breathing apparatus (SCBA) systems, gas and flame detection instruments, and other safety devices that complement 3M’s personal safety portfolio.

3M’s Personal Safety Division provides respiratory, hearing and fall protection solutions that help improve the safety and health of workers. The business also supplies products and solutions in other safety categories, such as head, eye and face protection, as well as reflective materials for high-visibility apparel and protective clothing.

Shareholders are paid a 2.06% dividend. The $257 Merrill Lynch price target compares with the consensus target of $224.62. The stock traded Tuesday morning at $227.50.

Procter & Gamble

This stock also offers a very solid dividend and safety. Procter & Gamble Co. (NYSE: PG) is another solid consumer staples stock for conservative investors to consider. It sells lots of very well-known household items that are essential for everyday life. Brands include Pampers, Tide, Bounty, Charmin, Gillette, Oral B, Crest, Olay, Pantene, Head & Shoulders, Ariel, Gain, Always, Tampax, Downy and Dawn.

P&G actually is innovative in its product development process and uses that to help ensure future growth and cash flow. This should provide investors years of steady growth and dividends. While currency headwinds have weighed on earnings and projections, a weaker dollar scenario would bode well for the future. The analysts noted this when the company reported third-quarter results:

The company reported roughly in-line results despite challenges in the quarter with a slight operating profit miss offset by below-the-line items. We maintain our fiscal year 2018 estimated EPS of $4.16 vs management’s unchanged guidance of +5-7% (implies $4.12-4.19) on organic sales of approx +2%.

Shareholders receive a 3.1% dividend. Merrill Lynch has set its price objective at $100, and the consensus target is $92.32. The stock was trading at $88.55.

Walmart

The giant retailer’s stock has performed well since bouncing off lows for the year way back in January, and it is on the Merrill Lynch US 1 list. Wal-Mart Stores Inc. (NYSE: WMT) is the world’s largest retailer, operating retail stores in various formats, including Sam’s Club, in the United States as well as a growing e-commerce business (including Jet.com). Internationally Walmart also operates locations in Argentina, Brazil, Canada, China, Japan, Mexico and the United Kingdom.

Each week, nearly 260 million customers and members visit the company’s 11,535 stores under 72 banners in 28 countries and e-commerce websites in 11 countries. With fiscal year 2016 revenue of $482.1 billion, Walmart employs approximately 2.2 million associates worldwide.

The company recently announced a massive $20 billion stock repurchase plan that was met with open arms by Wall Street. Many think it is in an effort to ward off potential activist investors. Most shareholders could care less and are thrilled by the buyback.

Walmart shareholders are paid a 2.24% dividend. The Merrill Lynch price target is $100. The posted consensus target is $85.49, and the shares at $90.95 Tuesday morning.

Despite the constant Wall Street bullishness, the market needs a breather, and a 5% sell-off would provide just that. These five top stocks rated Buy all pay good dividends and raise them every year. They also offer a degree of safety in what is clearly a very expensive market by historical standards. With the markets grinding higher and getting more expensive, playing it safe makes sense now.