The S&P 500 is up about 10% this year, yet 80% of that gain comes from technology stocks, many of which are tied to artificial intelligence. With interest rates and energy prices spiraling higher, and inflation clearly not under control, those willing to put any new money to work in stocks should likely be extremely careful. Why, you ask? The Shiller P/E, which compares the market’s price to average inflation-adjusted earnings over the trailing decade, currently sits at 41. This is the highest the Shiller P/E has been since the dot-com bubble peak, which reached roughly 44 in 1999. Both levels are significantly above the long-term historical average of around 17.
Investors seeking defensive companies that pay substantial dividends are drawn to the Dividend Aristocrats, and with good reason. The 69 companies that made the cut for the 2026 S&P 500 Dividend Aristocrats list have increased their dividends (not just maintained them) for 25 consecutive years. But the requirements go even further, with the following attributes also mandatory for membership on the aristocrats list:
- Companies must be worth at least $3 billion for each quarterly rebalancing.
- Their average daily trading volume must be at least $5 million in transactions for every trailing three-month period at every quarterly rebalancing date.
- They must be a member of the S&P 500.
We screened the 2026 Dividend Aristocrats to identify companies trading at the best price-to-earnings ratios and found five that also pay among the highest dividends in the group. All are rated Buy at top firms we cover on Wall Street, and all make sense for growth and income investors worried about the current state of the stock market.
Why do we cover the Dividend Aristocrats?
S&P 500 companies that have paid and raised their dividends for 25 years or longer are the types that growth and income investors want to buy and hold in their stock portfolios for the long term. These stocks are mostly conservative, and should we see a dramatic market correction, they will likely hold their ground much better than volatile technology names, many of which are overbought and frothy.
Hormel Foods
Hormel Foods (NYSE: HRL | HRL Price Prediction) is an American food processing company founded in 1891 in Austin, Minnesota. With shares down 14% already in 2026, the stock trades at 13.07 times forward earnings estimates. Hormel offers dual pricing power through both branded products and private-label manufacturing, as well as a reliable 4.7% dividend.
Hormel develops, processes, and distributes a range of meat, nuts, and other food products to retail, foodservice, deli, and commercial customers in the United States and internationally. It operates through three segments:
- Retail
- Food Service
- International
This Dividend Aristocrat is a consumer staples company focused on protein-based packaged foods. Its yield is historically high, and the Hormel Foundation’s oversight ensures dividend reliability. Reports indicate that it is restructuring its portfolio and cutting costs to improve performance.
The company provides various perishable products, including fresh meats, frozen items, refrigerated meal solutions, sausages, hams, guacamole, and bacon, and shelf-stable products, including canned luncheon meats, nut butter, snack nuts, chili, shelf-stable microwaveable meals, hash, stews, tortillas, salsas, tortilla chips, nutritional food supplements, and others. It sells its products under these brands:
- Hormel
- Always Tender
- Applegate
- Austin Blues
- Bacon 1
- Black Label
- Bread Ready
- Burke
- Café H
- Ceratti
- Chi-Chi’s
- Columbus
- Compleats
- Corn Nuts
- Cure 81
- Dan’s Prize
- Di Lusso
- Dinty Moore
- Don Miguel
- Doña Maria
- Embasa
- Fast N Easy
- Fire Braised
- Fontanini
- Happy Little Plants
- Herdez
- Hormel Gatherings
- Hormel Square Table
- Hormel Vital Cuisine
- House of Tsang
- Jennie-O
- Justin’s
- La Victoria
- Layout
- Lloyd’s
- Mary Kitchen
- Mr. Peanut
- Natural Choice
- Nut-rition
- Old Smokehouse
- Oven Ready
- Pillow Pack
- Planters
- Rosa Grande
- Sadler’s Smokehouse
- Skippy
- Spam
- Special Recipe
- Thick & Easy
- Valley Fresh
- Wholly
Barclays has an Overweight rating with a $23 target price.
Stanley Black & Decker
Stanley Black & Decker (NYSE: SWK) is the world’s largest tool company, with 50 manufacturing facilities in the United States and more than 100 worldwide, and its shares trade at 13.54 times forward earnings estimates. With the potential for the economy to slow down somewhat, you can bet that the do-it-yourself legions will fix rather than buy new, and this legendary stock is a solid idea now, while yielding a large 3.53% dividend.
Stanley Black & Decker provides hand tools, power tools, outdoor products, and related accessories in the United States, Canada, Europe, and elsewhere. Its Tools & Outdoor segment offers professional-grade corded and cordless electric power tools and equipment, including:
- Drills
- Impact wrenches and drivers
- Grinders, saws, routers, and sanders
- Pneumatic tools and fasteners, such as nail guns, nails, staplers and staples, and concrete and masonry anchors; corded and cordless electric power tools
- Hand-held vacuums, paint tools, and cleaning appliances
- Leveling and layout tools, planes, hammers, demolition tools, clamps, vises, knives, saws, chisels, and industrial and automotive tools
- Drill, screwdriver, router bits, abrasives, saw blades, and threading products
- Toolboxes, sawhorses, mechanic cabinets, and engineered storage solutions
- Electric and gas-powered lawn and garden products
This segment sells its products under these brand names:
- DeWalt
- Craftsman
- Cub Cadet
- Black+Decker
- Hustler
The company’s Industrial segment provides:
- Threaded fasteners, blind rivets and tools, blind inserts and tools
- Drawn arc weld studs and systems
- Engineered plastic and mechanical fasteners
- Self-piercing riveting systems
- Precision nut running systems
- Micro fasteners
- High-strength structural fasteners
- Axle swage, latches, heat shields, pins, couplings, fittings, and other engineered products
- Attachments used on excavators and handheld tools
This segment sells its products through a direct sales force and third-party distributors to various industries, including automotive, manufacturing, electronics, construction, aerospace, and others.
UBS has a Buy rating on the shares and a $98 target price.
Genuine Parts
Investors seeking a solid retail investment should consider purchasing this company, as its products remain in high demand and it has raised the dividend for 69 consecutive years. Genuine Parts (NYSE: GPC) is a global service provider of automotive and industrial replacement parts and value-added solutions, trading at 11.77 times forward earnings estimates with a 3.9% dividend yield.
The Automotive segment distributes replacement parts (other than collision parts) for all makes and models of automobiles, trucks, and other vehicles in North America, Europe, and Australasia. Its main automotive customers are repair and maintenance shops, and its main industrial customers are businesses operating distribution, manufacturing, and production equipment.
The Industrial segment distributes a wide variety of industrial bearings, mechanical and fluid power transmission equipment, including:
- Hydraulic and pneumatic products
- Material handling components
- Related parts and supplies
This segment offers replacement parts and solutions to customers in the maintenance, repair, and operation business, as well as to original equipment manufacturers.
Raymond James has a Strong Buy rating on the shares with a $145 target.
PepsiCo
This top consumer staples stock reported solid first-quarter earnings and will continue to supply all the goods for summer picnics and parties. PepsiCo (NYSE: PEP) is a global food and beverage company with a very solid 4.08% dividend yield and a forward P/E of 16.92.
Activist investor Elliott Investment Management recently took a $4 billion stake in PepsiCo last September, revealing a strategy to unlock value by focusing on core strengths such as innovation and brand marketing, rather than its capital-intensive bottling operations. This move caused PepsiCo’s stock to surge, with Elliott believing the company could see over 50% upside if its proposed strategic changes were implemented. However, these changes would involve a very long-term transformation.
PepsiCo’s Frito-Lay North America segment offers:
- Lays and Ruffles potato chips
- Doritos, Tostitos, and Santitas tortilla chips
- Cheetos cheese-flavored snacks, branded dips
- Fritos corn chips
The company’s Quaker Foods North America segment provides:
- Quaker Oatmeal
- Grits
- Rice cakes
- Natural granola and oat squares
- Pearl Milling mixes and syrups
- Quaker Chewy granola bars
- Cap’n Crunch cereal
- Life cereal
- Rice-A-Roni side dishes
PepsiCo’s North America Beverages segment offers beverage concentrates, fountain syrups, and finished goods under these brands:
- Pepsi
- Gatorade
- Mountain Dew
- Diet Pepsi
- Aquafina
- Diet Mountain Dew
- Tropicana Pure Premium
- Sierra Mist
- Mug
Goldman Sachs has a Buy rating with a $183 price objective.
PPG Industries
Formerly known as Pittsburgh Paint and Glass, it has paid dividends to shareholders since 1899 and currently offers a 2.30% dividend, trading at a very reasonable 12.83 times forward earnings estimates. PPG Industries (NYSE: PPG) manufactures and distributes paints, coatings, and specialty materials in the United States, Canada, the Asia Pacific, Latin America, Europe, the Middle East, and Africa. It operates through two segments.
The Performance Coatings segment offers:
- Coatings
- Solvents
- Adhesives
- Sealants
- Sundries
- Software for automotive and commercial transport/fleet repair and refurbishing
- Light industrial coatings and specialty coatings for signs
- Wood stains, paints, thermoplastics, pavement marking products, and other advanced technologies for pavement marking for government, commercial infrastructure, painting, and maintenance contractors
- Coatings, sealants, transparencies, transparent armor, adhesives, engineered materials, and packaging and chemical management services for commercial, military, regional jet, and general aviation aircraft
The Industrial Coatings segment offers coatings, adhesives, and sealants, as well as metal pretreatments, services, and coatings applications for:
- Appliances, agricultural and construction equipment
- Consumer electronics, automotive parts, and accessories
- Building products
- Kitchenware
- Vehicles and other finished products.
- On-site coatings services
It also provides coatings for metal cans, closures, plastic and aluminum tubes for food, beverage, and personal care, promotional, and specialty packaging; amorphous precipitated silica for tires, battery separators, and other end-users; TESLIN substrates for labels, e-passports, driver’s licenses, breathable membranes, and loyalty and identification cards; and organic light emitting diode materials, displays and lighting lens materials, optical lenses, color-change products, and photochromic dyes.
Wells Fargo has an Overweight rating with a target price of $130.
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