With October almost over, many investors are looking ahead to Halloween, the holidays and the end of the year. One thing is for sure; the stock market is very overbought and some of the momentum stock trades are very crowded and have been hit hard during recent sell-offs. With interest rates remaining very close to generational lows, top-quality dividend stocks may be the way to go for the rest of 2021 and into 2022.
Often when income investors look for companies paying big dividends they are drawn to the Dividend Aristocrats, and with good reason. The 65 companies that made the cut for the 2021 S&P 500 Dividend Aristocrats list have increased dividends (not just remained the same) for 25 years straight. Keep in mind that being on this list now doesn’t mean that in the future they won’t be forced to reduce their dividend.
We decided to screen the Dividend Aristocrats looking for the companies that have raised their dividends the longest. Eight top companies in the elite list have raised the dividends they pay shareholders every year for the past 58 years. Five look like great ideas now for worried investors looking for some growth and dependable income. While all are rated Buy on Wall Street, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
This remains a top Warren Buffet holding and offers not only safety but also an incredibly strong worldwide brand with 40% overseas sales. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands.
Led by Coca-Cola, one of the world’s most valuable brands, the company’s portfolio features 20 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, it is the number one provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks.
Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy Coca-Cola beverages at a rate of more than 1.9 billion servings a day. Also remember that the company also owns 16.7% of Monster Beverage, which continues to deliver big numbers.
Coca-Cola stock investors receive a 3.10% dividend. BofA Securities has a price target of $64 on the shares, while the Wall Street consensus target is $61.89. The stock closed on Monday at $54.23 per share.
This top dividend payer also is a very safe play for investors. Colgate-Palmolive Co. (NYSE: CL) continues to deliver solid execution and is one of the best-positioned companies in its sector, given its strong brands in attractive categories, particularly oral care. Colgate also was one of the most valuable brands in the world.
Over half of Colgate’s total revenues (52%) are derived in faster-growth emerging economies, and the company maintains leading or near-leading market shares across Brazil, Russia, India and China. While those have slowed over the last year, a pickup in growth could be coming, especially with a very weak dollar making products attractive overseas.
Investors receive a 2.40% dividend. The Goldman Sachs price target is $98, and the posted consensus target is $85.90. Colgate-Palmolive stock closed at $75.14 per share on Monday.
This stock has rallied nicely off the lows posted in the spring but still offers a solid entry point for investors. Emerson Electric Co. (NYSE: EMR) is a global technology and engineering company providing innovative solutions for customers in industrial, commercial and residential markets.
The company’s Automation Solutions business helps process, hybrid and discrete manufacturers maximize production, protect personnel and the environment while optimizing their energy and operating costs. The Commercial & Residential Solutions business helps ensure human comfort and health, protect food quality and safety, advance energy efficiency and create a sustainable infrastructure.
Shareholders receive a 2.09% dividend. The $116 Goldman Sachs price target compares with the consensus target of $108.43. Emerson Electric stock ended Monday’s trading at $96.55.
Johnson & Johnson
With a diverse product base and a very popular and solid brand, this is among the most conservative big pharmaceutical plays and 44% of fund managers own the stock. Johnson & Johnson (NYSE: JNJ) is one of the top market cap stocks in the health care sector and raised the dividend for shareholders this year for the 56th consecutive year.
With everything from medical devices to over-the-counter health items and prescription drugs, the company remains one of the most diversified health care names on Wall Street. It also has one of the most exciting pipelines of new drugs in the sector. All that makes the stock an outstanding holding for conservative investors with a long-term investment outlook.
Johnson & Johnson generates a little over half of its sales in international markets, which are expected to see higher spending on health care over the next 10 years and beyond.
The dividend yield is 2.58%. BofA Securities set a $200 price target. The consensus target for Johnson & Johnson stock is $188.29. The shares closed at $164.08 on Monday.
Procter & Gamble
The company offers a very solid dividend and is perhaps one of the safest consumer staples plays out there. Procter & Gamble Co. (NYSE: PG) is one of the world’s largest consumer products companies. Its many brands include Pampers, Tide, Bounty, Charmin, Gillette, Oral B, Crest, Olay, Pantene, Head & Shoulders, Ariel, Gain, Always, Tampax, Downy and Dawn. Some of these are among the most valuable brands in the world.
The company sells its products through mass merchandisers, e-commerce, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, baby stores, specialty beauty stores, high-frequency stores and pharmacies. The company has been very 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.
Shareholders receive a 2.50% dividend. The BofA Securities price objective is $160. The consensus figure is $153.05, and Procter & Gamble stock was last seen on Monday at $140.85 a share.
These five incredible blue chip leaders have raised the dividends they pay to shareholders for almost 60 years, which given the ups and downs of the economy over that period remains an amazing accomplishment. While there is no guarantee they will raise them for the next 60 years, investors can feel pretty confident that they will.
Sponsored: Want to Retire Early? Here’s a Great First Step
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.