Dividend aristocrats are S&P 500 member companies that not only offer a steady income stream by consistently paying dividends but have a history of increasing their payouts annually. As rising inflation, supply chain disruptions, expected monetary policy tightening, and increasing COVID-19 cases kept the stock market volatile in 2021, dividend investing gained popularity, with investors opting for steady income streams over the potential to generate market-beating returns.
Significant investor attention on dividend aristocrats helped many of these stocks outperform the S&P 500 last year. Investors’ interest in these stocks is evidenced by the SPDR S&P Dividend ETF’s (SDY) 23.8% returns over the past year.
So, let’s take a look at dividend aristocrats Abbott Laboratories (ABT), Linde plc (LIN), Target Corporation (TGT), Dover Corporation (DOV), and Genuine Parts Company (GPC), which each outperformed the S&P 500 last year.
Abbott Laboratories (ABT)
ABT in Abbott Park, Ill., discovers, develops, manufactures, and sells health care products worldwide. It operates in four segments: Established Pharmaceutical Products; Diagnostic Products; Nutritional Products; and Medical Devices.
On Nov.16, 2021, ABT launched its Similac 360 Total Care. Shawn Millerick, vice president of Pediatric Nutrition at ABT, said, “Parents strive to make the best decisions for their children every day. We have made a promise to parents to provide them with our very best, scientifically-backed products like Similac 360 Total Care, as well as resources and information to support them and their feeding choices.”
ABT has declared 392 consecutive quarterly dividends since 1924 and has increased its dividend payouts for 50 straight years. Over the last three years, ABT’s dividend payouts have grown at a 17.13% CAGR. While ABT’s four-year average dividend yield is 1.51%, its current dividend translates to a 1.38% yield. On Dec. 10, 2021, ABT increased its quarterly common dividend to 47 cents per share, a 4.4% increase.
ABT’s net sales increased 23.4% year-over-year to $10.93 billion in the third quarter, ended Sept. 30, 2021. Its net earnings came in at $2.10 billion, up 70.5% year-over-year. And its EPS was $1.40, up 42.9% year-over-year.
Analysts expect ABT’s revenue to increase 21.9% year-over-year to $42.20 billion in its fiscal 2021. Its EPS is estimated to increase 39.5% to $5.09 in its fiscal 2021. It surpassed the EPS estimates in each of the trailing four quarters. Over the past year, the stock has returned 28.5% versus the S&P 500’s 27.2% gains. It has gained 4.2% over the past month to close yesterday’s session at $135.16.
ABT’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
ABT has an A grade for Sentiment and a B grade for Stability and Quality. Within the Medical – Devices & Equipment industry, it is ranked #6 of 169 stocks. Click here to see the additional POWR Rating for Growth, Value, and Momentum for ABT.
Linde plc (LIN)
Based in Guildford, U.K., LIN operates as an industrial gas company in North and South America, Europe, the Middle East, Africa, and the Asia Pacific. It also delivers state-of-the-art gas processing solutions to support customer expansion, efficiency improvements, and emissions reductions.
On Oct.21, 2021, LIN announced the start of its new world-scale hydrogen production facility in Texas. Jeff Barnhard, Vice President South Region, LIN, said, “Over the past five years we have significantly expanded our already robust hydrogen supply system in the U.S. Gulf Coast. Supported by multiple supply sources and an innovative high-purity hydrogen storage cavern, this infrastructure enables us to provide our customers with reliable long-term supply. “
LIN’s four-year average dividend yield is 0.27%. On Oct. 25, 2021, LIN announced that its board of directors had declared a $1.06 per share quarterly dividend.
For its fiscal third quarter, ended Sept. 30, 2021, LIN’s sales increased 11.9% year-over-year to $7.67 billion. In addition, the company’s net income was $979 million, up 39.9% year-over-year. Its EPS was $1.88, up 42.4% year-over-year.
LIN’s revenue is expected to be t $28.40 billion in its fiscal 2022, representing a 6.1% year-over-year rise. The company’s EPS is expected to increase 10.4% year-over-year to $10.32 in fiscal 2022. Over the past year, the stock has returned 31.5%. It has gained 8% in price over the past month to close yesterday’s session at $346.41.
It is no surprise that LIN has an overall B rating, which equates to a Buy in our proprietary rating system. In addition, it has a B grade for Momentum, Stability, and Quality. LIN is ranked #35 out of 89 stocks in the A-Rated Chemicals industry. Click here to see the additional POWR Ratings for LIN (Growth, Value, and Sentiment).
Target Corporation (TGT)
TGT is a general merchandise retailer in the United States. The Minneapolis, Minn.-based concern currently sells its products through its approximately 1,897 stores, and digital channels that include Target.com.
On Nov. 17, 2021, Brian Cornell, Chairman, and CEO of TGT, said, “The consistently strong growth we’re seeing in our business, quarter after quarter, is a testament to the passion and commitment our team brings to serving our guests, and the trust we’ve built with them as a result.”
TGT’s dividend payouts have grown at a 7.84% CAGR over the last three years and at a CAGR of 6.38% over the past five years. While TGT’s four-year average dividend yield is 2.36%, its current dividend translates to a 1.57% yield.
TGT’s sales increased 13.2% year-over-year to $25.29 billion for the fiscal third quarter, ended Oct. 30, 2021. The company’s net earnings came in at $1.49 billion, up 46.7% year-over-year. And its EPS came in at $3.04, up 51.2% year-over-year.
For its fiscal year 2022, analysts expect TGT’s revenue to be $106.52 billion, representing a 13.8% year-over-year rise. In addition, the company’s EPS is expected to increase 40.9% year-over-year to $13.27 in fiscal 2022. Also, it surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has returned 31.1%. Over the past nine months, it has gained 11.5% in price to close yesterday’s session at $228.86.
TGT’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our POWR Rating system. Also, the stock has a B grade for Value and Quality. Click here to see TGT’s rating for Growth, Momentum, Stability, and Sentiment as well. TGT is ranked #15 of 39 stocks in the A-Rated Grocery/Big Box Retailers industry.
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Dover Corporation (DOV)
DOV provides equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services worldwide. Its segments are Engineered Products; Fueling Solutions; Pumps and Process Solutions; and Refrigeration & Food Equipment. DOV is headquartered in Downers Grove, Ill.
On Dec. 29, 2021, DOV announced that it was acquiring Engineered Controls International, LLC. The acquisition is expected to boost the company’s financial performance.
DOV’s four-year average dividend yield is 1.80%, and its current dividend translates to a 1.12% yield. Also, its dividend payouts have grown at a 7.47% CAGR over the past five years.
DOV’s revenue increased 15.4% year-over-year to $2.02 billion in the third quarter, ended Sept. 30, 2021. Its net earnings came in at $263.76 million, up 31.7% year-over-year. Also, its EPS was $1.81, up 31.2% year-over-year.
For its fiscal 2021, DOV’s revenue and EPS are expected to grow 17.3% and 32.6%, respectively, year-over-year to $7.84 billion and $7.52. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has returned 43.8%. Over the past month, it has gained 7.4% in price to close yesterday’s session at $179.34.
DOV’s strong fundamentals are reflected in its POWR ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. In addition, it has a B grade for Stability and Quality. DOV is ranked #12 out of 79 stocks in the B-Rated Industrial – Machinery industry. Click here to see the additional POWR Ratings for DOV (Growth, Value, Momentum, and Sentiment).
Genuine Parts Company (GPC)
Atlanta, Ga.-based GPC distributes automotive replacement parts, industrial parts, and materials. The company distributes automotive replacement parts for imported vehicles, hybrid and electric vehicles, trucks, SUVs, motorcycles, and recreational vehicles. Also, it operates across the U.S., Canada, France, Australia, and internationally.
On Oct. 21, 2021, Paul Donahue, the Chairman, and CEO of GPC, said, “The GPC team was largely able to manage through supply chain disruptions, allowing us to deliver quality customer service. In addition, we further improved our balance sheet and generated strong cash flow, which allows for the ongoing deployment of capital for growth and productivity investments, bolt-on acquisitions, the dividend and share repurchases.”
GPC’s dividend payouts have grown at a 4.22% CAGR over the past three years. Its four-year average yield is 3.01%;its current yield is 2.35%. On Nov. 15, 2021, GPC declared a $0.82 per share regular quarterly cash dividend on the company’s common stock.
GPC’s net sales were $4.82 billion for the third quarter, ended Sept. 30, 2021, up 10.3% year-over-year. The company’s adjusted net income increased 14.2% year-over-year to $270.48 million, and its adjusted EPS came in at $1.88, representing a 15.3% year-over-year rise.
Analysts expect GPC’s revenue to increase 13.3% year-over-year to $18.74 billion in its fiscal 2021. Its EPS is expected to grow 26.9% year-over-year to $6.69 in fiscal 2021. In addition, it surpassed the Street’s EPS estimates in each of the trailing four quarters. Over the past year, the stock returned 39.6%. The stock has gained 7.6% in price over the past month to close yesterday’s trading session at $138.94.
GPC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary rating system. GPC has a B grade for Growth, Quality, Sentiment, and Stability. Within the Auto Parts industry, it is ranked #1 of 65 stocks. Click here to see GPC’s ratings for Momentum and Value.
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ABT shares were unchanged in after-hours trading Thursday. Year-to-date, ABT has declined -3.98%, versus a -1.48% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...
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