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The 7 Highest Yielding Dividend Aristocrats to Buy Right Now and Hold Forever

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For investors, 2022 was a dreadful year. The S&P 500 was down almost 20% and the Nasdaq lower by a stunning 33%. Yet, what a difference a year can make. Through Thursday, the S&P 500 was up 19.42% and the Nasdaq an astounding 36.18%. With the market rolling again, financial news talking heads and portfolio managers pitching their products like carnival barkers are everywhere.
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In truth, just 10 companies have made up 95% of the gains in the S&P 500, and nine heaviest-weighted stocks in the Nasdaq 100 have accounted for almost all its gains. What do these stocks have in common? They are almost all technology stocks, and it is likely that the tech sector continues to drive the upside for the rest of the year.

One smart idea for investors who think the market has run too far too fast is to look to the Dividend Aristocrats. The 66 companies that made the cut for the 2023 S&P 500 Dividend Aristocrats list have increased dividends (not just remained the same) for 25 years straight. However, the requirements go even further. The following attributes are also mandatory for membership:

  • Companies must be worth at least $3 billion at the time of each quarterly rebalancing.
  • Average daily volume must be at least $5 million in transactions for every trailing three-month period at every quarterly rebalancing date.
  • Companies must be a member of the S&P 500.


With the potential for some big downside still looming later this year, and interest rates that just went higher again (but may be near the top for this cycle), we thought it would be a good idea to look for companies on the Dividend Aristocrats that pay among the biggest dividends and that investors can buy now and hold forever. Seven top companies hit our screen, and while six of them are rated Buy across Wall Street by the top firms, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision. Stocks are listed by the highest dividend first.

Walgreens

This huge drugstore chain operator is a safe retail play for investors looking to add health care now, and it trades at a cheap 7.5 times 2023 earnings expectations. Walgreens Boots Alliance Inc. (NASDAQ: WBA) operates as a pharmacy-led health and beauty retail company. It operates through three segments.


The Retail Pharmacy USA segment sells prescription drugs and an assortment of retail products, including health, wellness, beauty, personal care, consumable, and general merchandise products through its retail drugstores. It also provides specialty pharmacy services and mail services; this segment operates nearly 10,000 retail stores under the Walgreens and Duane Reade brands in the United States; and six specialty pharmacies.

The Retail Pharmacy International segment sells prescription drugs and health and wellness, beauty, personal care and other consumer products through its pharmacy-led health and beauty stores and optical practices, as well as online and an integrated mobile application. This segment operated 4,428 retail stores under the Boots, Benavides and Ahumada in the United Kingdom, Thailand, Norway, the Netherlands, Mexico and elsewhere, and 550 optical practices, including 165 on a franchise basis.
The Pharmaceutical Wholesale segment of Walgreens engages in the wholesale and distribution of specialty and generic pharmaceuticals, health and beauty products, and home health care supplies and equipment, as well as provides related services to pharmacies and other health care providers.

Shareholders receive a 6.26% dividend. Cowen has a $41 target price on Walgreens Boots Alliance stock. The consensus target is just $33.47, and shares closed on Thursday at $30.63.
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3M

This top company could really benefit from continued economic pick-up, and the shares are down big this year. 3M Co. (NYSE: MMM) operates as a diversified technology company worldwide. It operates through the following four segments.

The Safety and Industrial segment offers industrial abrasives and finishing for metalworking applications; auto body repair solutions; closure systems for personal hygiene products, masking and packaging materials; electrical products and materials for construction and maintenance, power distribution and electrical original equipment manufacturers; structural adhesives and tapes; respiratory, hearing, eye and fall protection solutions; and natural and color-coated mineral granules for shingles.

The Transportation and Electronics segment provides ceramic solutions; attachment tapes, films, sound and temperature management for transportation vehicles; premium large format graphic films for advertising and fleet signage; light management films and electronics assembly solutions; packaging and interconnection solutions; and reflective signage for highway and vehicle safety.

The Health Care segment offers food safety indicator solutions; health care procedure coding and reimbursement software; skin, wound care and infection prevention products and solutions; dentistry and orthodontic solutions; and filtration and purification systems.

The Consumer segment provides consumer bandages, braces, supports and consumer respirators; cleaning products for the home; retail abrasives, paint accessories, car care DIY products, picture hanging and consumer air quality solutions; and stationery products.

3M stock investors receive a 5.75% dividend. D.A. Davison’s $159 target is well above the consensus target of $110.13. The stock closed on Thursday at $111.19.

Amcor

This very off-the-radar idea makes sense as the company makes products that are always needed and in demand. Amcor PLC (NYSE: AMCR) produces and sells packaging products in Europe, North America, Latin America and elsewhere.

The Flexibles segment provides flexible and film packaging products in the food and beverage, medical and pharmaceutical, fresh produce, snack food, personal care and other industries.
Amcor’s Rigid Packaging segment offers rigid containers for a range of beverage and food products, including carbonated soft drinks, water, juices, sports drinks, milk-based beverages, spirits and beer, sauces, dressings, spreads and personal care items, as well as plastic caps for various applications.
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The company sells its products primarily through its direct sales force.

Amcor stock comes with a 4.96% dividend. The J.P. Morgan target price of $10.80 compares with a $10.54 consensus target and the most recent close at $10.18.

Realty Income

This is an ideal stock for growth and income investors looking for a safer, inflation-busting idea for 2023. Realty Income Corp. (NYSE: O) is an S&P 500 company dedicated to providing stockholders with dependable monthly income. The company is structured as a real estate investment trust, and its monthly dividends are supported by the cash flow from over 6,500 real estate properties owned under long-term lease agreements with commercial tenants.

To date, the company has declared 608 consecutive common stock monthly dividends throughout its 54-year operating history and increased the dividend 109 times since its public listing in 1994. It is a top real estate member of the S&P 500 Dividend Aristocrats index.

The distribution yield is 4.93%. Stifel has set a $71.25 price objective, and Realty Income has a $69.71 consensus target. Shares closed at $62.19 on Thursday.

IBM

This blue chip technology giant still offers investors an incredibly solid entry point, a massive dividend and a conservative way to play the artificial intelligence (AI) explosion. International Business Machines Corp. (NYSE: IBM) provides integrated solutions and services worldwide. The company operates through four business segments.

The Software segment offers hybrid cloud platform and software solutions, such as Red Hat (an enterprise open-source solutions); software for business automation, AIOps and management, integration and application servers; data and artificial intelligence solutions; and security software and services for threat, data and identity. This segment also provides transaction processing software that supports clients’ mission-critical and on-premise workloads in banking, airlines and retail industries.

The Consulting segment offers business transformation services, including strategy, business process design and operations, data and analytics, and system integration services; technology consulting services; and application and cloud platform services.

The Infrastructure segment provides on-premises and cloud-based server and storage solutions for its clients’ mission-critical and regulated workloads, and it supports services and solutions for hybrid cloud infrastructure, as well as remanufacturing and remarketing services for used equipment. The Financing segment offers lease, installment payment, loan financing, and short-term working capital financing services.

IBM stock comes with a 4.71% dividend. The $152 BofA Securities price target is higher than the $143.75 consensus target. Thursday’s closing print was $142.97.

Federal Realty Investment Trust

While real estate has been hit by rising interest rates, demand is still growing and hard assets are good in inflationary times. Federal Realty Investment Trust (NYSE: FRT) is a recognized leader in the ownership, operation and redevelopment of high-quality retail-based properties located primarily in major coastal markets from Boston to Washington, as well as San Francisco and Los Angeles.
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Federal Realty’s mission is to deliver long-term, sustainable growth through investing in densely populated, affluent communities where retail demand exceeds supply. Its expertise includes creating urban, mixed-use neighborhoods like Santana Row in San Jose, California, Pike & Rose in North Bethesda, Maryland, and Assembly Row in Somerville, Massachusetts.

Federal Realty’s 102 properties include approximately 3,200 tenants in 26 million square feet and over 3,100 residential units. Federal Realty has increased its quarterly dividends to its shareholders for 55 consecutive years, the longest record in the REIT industry.

Unitholders receive a 4.20% distribution. Federal Realty Investment Trust stock has a $119 price target at Barclays. The consensus target is $109.80, and shares closed on Thursday at $100.57.

Franklin Resources

This mutual fund powerhouse continues to grow its huge asset base. Franklin Resources Inc. (NYSE: BEN) is among the largest and most global investment managers. At times, 50% of its sales are from outside the United States, an advantage given a maturing U.S. market.

Franklin Resources offers its products and services under the brands of Franklin, Templeton, Franklin Mutual Series, Franklin Bissett, Fiduciary Trust, Darby, Balanced Equity Management, K2, LibertyShares and Edinburgh Partners.

The 2023 bull market has proven to be a solid tailwind for the stock, and while withdrawals from baby boomers may be a concern, the path forward looks solid.

Investors receive a 4.2% dividend. Deutsche Bank’s $29 price target accompanies a Hold rating. The consensus target is $25.05, but Franklin Resources stock closed at $28.41 on Thursday.


Any company that has paid shareholders dividends for 25 years or more is the epitome of safe and dependable. Toss in the fact that all these outstanding stocks have support from top Wall Street analysts, making them good ideas for nervous investors. In these turbulent times, the adage of “better safe than sorry” offers words to live by for sure, especially given the multitude of events and situations that are threatening a stock market that ran way past its intrinsic value some time ago.

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