Investing

4 Strong Buy Dividend Aristocrats Wall Street Loves Are Trading Just Above 52-Week Lows

Lee Jackson

Published: May 9, 2024 8:32 am

Investors are drawn to dividend stocks for their reliable income and the potential for a robust total return. Total return encompasses interest, capital gains, dividends, and distributions accumulated over time. The total return on an investment or portfolio is a combination of income and stock appreciation, providing a stable and secure investment option.

For example, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13%—10% for the increase in stock price and 3% for the dividends paid.

Investors seeking defensive companies with substantial dividends are naturally attracted to the Dividend Aristocrats, and for good reason. The 67 companies that earned a spot on the 2024 S&P 500 Dividend Aristocrats list have not just maintained their dividends, but increased them for a remarkable 25 years in a row. These companies also meet additional stringent criteria, further bolstering their status as reliable long-term investments.

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

Why we are covering the Dividend Aristocrats

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S&P 500 Companies that have paid and raised their dividends for 25 years or longer are the kind that growth and income investors want to buy and hold in stock portfolios forever. These stocks are mostly conservative, and should we see a dramatic market correction, they will likely keep their ground much better than volatile technology names.

Amcor

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This is a very off-the-radar idea, but it makes sense as they produce products that are always needed and pays a strong 5.46% dividend. Amcor plc (NYSE: AMCR) manufactures and sells packaging products in Europe, North America, Latin America, Africa, and the Asia Pacific regions.

The company operates through two segments:

• Flexibles
• Rigid Packaging

The Flexibles segment provides flexible and film packaging products in food and beverage, medical and pharmaceutical, fresh produce, snack food, personal care, and other industries.

The 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
• Beer
• Sauces
• Dressings
• Spreads
• Personal care items
• Plastic caps for various applications.

The company sells its products primarily through its direct sales force.

Franklin Resources

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This company is a mutual fund powerhouse that pays a safe and secure 4.53% dividend. Franklin Resources Inc (NYSE: BEN) is among the most prominent global money managers.

The firm markets mutual funds and institutional separate accounts under the Franklin, Templeton, and Mutual Series brands. At times, 50% of its sales are from outside the US, an advantage given the maturing US 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
• Edinburgh Partners

The 2023-2024 bull market has proven to be a solid tailwind for the company. While withdrawals from baby boomers may be a concern, the path forward looks solid.

J.M. Smucker

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Anybody who has ever had a peanut butter and jelly sandwich has likely used one of their products. The J.M. Smucker Company (NYSE: SJM) manufactures and markets branded food and beverage products worldwide.

It operates in three segments:

• U.S. Retail Pet Foods
• U.S. Retail Coffee
• U.S. Retail Consumer Foods

With a product range that caters to a wide spectrum of consumer preferences, J.M. Smucker offers everything from:

• Mainstream to premium coffee
• Peanut butter and specialty spreads
• Fruit spreads
• Shortening and oils
• Frozen sandwiches and snacks
• Pet food and pet snacks
• Food service hot beverage
• Food service portion control
• Flour products
• Dog and cat food
• Frozen handheld products
• Juices and beverages
• Baking mixes and ingredients

J.M. Smucker also provides its products under these brands:

• Meow Mix
• 9Lives
• Kibbles n Bits
• Milk-Bone
• Pup-Peroni
• Rachael Ray Nutrish and Nature’s Recipe
• Folgers
• Café Bustelo,
• Dunkin’
• Folgers
• Café Bustelo
• 1850
• Jif
• Smucker’s
• Smucker’s Uncrustables
• Robin Hood
• Five Roses

The company sells its products through direct sales and brokers to food retailers, club stores, discount and dollar stores, online retailers, pet specialty stores, natural foods stores and distributors, drug stores, military commissaries, and mass merchandisers.

Kenvue

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Spun off from Johnson & Johnson, Inc. (NYSE: JNJ) last year, this potential total return home run pays a solid 3.72% dividend. Kenvue Inc. (NYSE: KVUE) is a global consumer health company.

The company operates through three segments:

• Self Care
• Skin Health and Beauty
• Essential Health

The self-care segment offers cough, cold, and allergy pain care, digestive health, smoking cessation, and other products under:

• Tylenol,
• Nicorette
• Zyrtec brands.

The Skin Health and Beauty segment provides face and body care, hair care, sun care, and other products under:

• Neutrogena
• Aveeno
• OGX brand names.

The Essential Health segment offers oral and baby, women’s health, and wound care products under:

• Listerine
• Johnson’s
• Band-Aid
• Stayfree brands