The Consumer Price Index jumped 8.5% in March, hitting a 40-year high. Also, worries about tight supplies in the absence of any measurable progress in peace talks between Russia and Ukraine have been driving oil prices up. Since most U.S. recessions over the past few decades have been preceded by an increase in oil prices, many economists expect the economy to suffer a recession this year.
Therefore, investing in safe-haven assets should gain prominence in the coming months. While one could invest in precious metals like gold to weather a recession, betting on fundamentally sound dividend aristocrat stocks could be a great strategy too. Investors’ interest in the dividend aristocrats is evident in the ProShares S&P 500 Dividend Aristocrats ETF’s (NOBL) 6.8% returns over the past month.
Becton, Dickinson and Company (BDX), Target Corporation (TGT), Dover Corporation (DOV), Cintas Corporation (CTAS), and Linde plc (LIN) have been paying dividends at an increasing rate for the past few decades, so we think betting on them could help generate a steady income stream amid these uncertain times.
Becton, Dickinson and Company (BDX)
BDX develops, manufactures, and sells medical supplies, devices, laboratory equipment, and diagnostic products for healthcare institutions, physicians, life science researchers, clinical laboratories, the pharmaceutical industry, and the general public worldwide. Its segments are BD Medical; BD Life Sciences; and BD Interventional. BX is headquartered in Franklin Lakes, N.J.
On Feb. 3, 2022, Tom Polen, BDX’s chairman, CEO, and president, said, “We continue to advance our innovation pipeline and tuck-in M&A strategy, strengthening our leadership position in our durable core and adding transformative solutions to our portfolio. As we look forward, we are confident in our ability to deliver on our commitments and are well-positioned to create long-term growth and value for all our stakeholders.”
BDX has been paying dividends at an increasing rate for 49 consecutive years. Its dividend payouts have grown at a 4.1% CAGR over the past five years, and its four-year average yield is 1.24%, while its current dividend yield is 1.26%.
BDX’s base revenues came in at $4.81 billion for its fiscal year 2022 first quarter, ended Dec. 31, 2021, up 8.1% year-over-year. Its long-term debt came in at $16.36 billion for the period ended Dec.31, 2021, compared to $17.11 billion for the period ended Sept. 30, 2021. Also, its other current liabilities were $5.67 billion, compared to $6.13 billion, for the same period.
For its fiscal year 2023, analysts expect BDX’s revenue to increase 4.4% year-over-year to $20.53 billion. The stock’s EPS is expected to grow at an 8% rate to $13.92 in 2023. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters. The stock has gained 8.1% in price over the past year to close yesterday’s session at $270.94.
BDX’s strong fundamentals are reflected in its POWR Ratings. It has an overall B rating, which equates to Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
BDX has a B grade for Growth, Stability, and Sentiment. Within the Medical – Devices & Equipment industry, it is ranked #23 of 159 stocks. Click here to see the additional POWR Ratings for Value, Momentum, and Quality for BDX.
Target Corporation (TGT)
TGT Minneapolis, Minn., is a general merchandise retailer in the United States. It operates approximately 2,000 stores. To help all families discover the joy of everyday life, since 1946, the company has donated 5% of its profit to communities.
On March 16, 2022, TGT announced its spring collaboration with Stoney Clover Lane, a customizable accessories brand. Jill Sando, TGT’s executive vice president and chief merchandising officer, said, “We know our guests are increasingly looking for unique ways to show off their personal style, and Stoney Clover Lane is a brand we’ve had our eye on for a while, since they are known for their customizable pieces.”
TGT has been paying dividends for more than 50 years at an increasing rate. Its dividend payouts have grown at 10% CAGR for the past three years. Its four-year average yield is 2.24%, while its current dividend translates to a 1.56% yield.
TGT’s sales increased 9.4% year-over-year to $30.62 billion for its fourth fiscal quarter, ended Jan. 29, 2022. The company’s total revenue came in at $31 billion, up 9.4% year-over-year. Its net earnings came in at $1.54 billion, up 11.9% year-over-year, while its EPS was $3.21, up 17.6% year-over-year.
For its fiscal year 2024, analysts expect TGT’s revenue to be $114.83 billion, representing a 4.6% year-over-year rise. The company’s EPS is expected to increase 14% per annum for the next five years. It surpassed EPS estimates in each of the four trailing quarters. Over the past year, the stock has gained 14.1% in price to close yesterday’s trading session at $233.82.
TGT’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our POWR Ratings system.
Also, the stock has a B grade for Value, Sentiment, and Quality. Within the A-rated Grocery/Big Box Retailers industry, it is ranked #14 of 39 stocks. Click here to see the additional POWR Ratings for Growth, Momentum, and Stability for TGT.
Recently the Reitmeister Total Return Portfolio (RTR) closed a winning trade in TGT for a 65% gain. Learn more about the RTR service here.
Dover Corporation (DOV)
DOV in Downers Grove, Ill., provides equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services worldwide. Its segments are Engineered Products; Clean Energy & Fueling; Imaging and Identification; Pumps and Process Solutions; and Climate & Sustainability Technologies.
On Jan, 27, 2022, DOV’s President and CEO, Richard J. Tobin, said, “We begin 2022 with a constructive outlook and are well-equipped to navigate this persistently demanding operational environment. We see sustained strong demand conditions across much of our portfolio, which is reflected in our order backlogs and which allows us to better plan our capacity, production and inventory, a major benefit in today’s constrained operating environment.”
DOV has been paying dividends for 65 consecutive years. Its dividend payouts have grown at a 7.3% CAGR over the past five years. Its four-year average yield is 1.76%, while its current dividend yield is 1.35%.
DOV’s revenue increased 11.7% year-over-year to $1.99 billion for the fourth quarter ended Dec. 31, 2021. Its non-GAAP adjusted net earnings came in at $259 million, up 15.1% year-over-year, while its non-GAAP adjusted EPS was $1.78, up 14.8% year-over-year.
Analysts expect DOV’s revenue to increase 9.3% to $8.64 billion in 2022. Its EPS is estimated to increase 14.5% per annum for the next five years. It surpassed EPS estimates in each of the four trailing quarters, and the stock has gained 7.8% in price over the past year to close yesterday’s session at $149.41.
DOV has an overall B rating, which equates to Buy in our POWR Ratings system. It has a B grade for Stability and Quality. Click here to see the additional POWR Ratings for DOV (Growth, Value, Momentum, and Sentiment). It is ranked #23 of 76 stocks in the B-rated Industrial – Machinery industry.
Cintas Corporation (CTAS)
CTAS in Cincinnati, Ohio, provides corporate identity uniforms and related business services primarily in the United States, Canada, and Latin America. It operates through Uniform Rental and Facility Services; First Aid and Safety Services; and All Other segments.
On March 23, 2022, Todd M. Schneider, CTAS’ President and CEO, said, “Our financial results are indicative of our strong value proposition. Businesses prioritize image, cleanliness, safety and compliance and, challenged with labor scarcity and rising costs, increasingly count on Cintas to help get them Ready for the Workday.”
CTAS has been paying dividends for more than 35 consecutive years. Its dividend payouts have grown at 22% CAGR over the past five years. CTAS’ four-year average yield is 1.01%, while its current dividend translates to a 0.91% yield.
For its fiscal 2022 third quarter, ended Feb. 28, 2022, CTAS’ total revenue increased 10.3% year-over-year to $1.96 billion. Its net income came in at $315.45 million, up 22.1% year-over-year, while its EPS came in at $2.97, up 25.3% year-over-year.
CTAS’ revenue is expected to increase 9.4% to $7.79 billion in 2022, while its EPS is estimated to increase 11.1% per annum for the next five years. It surpassed EPS estimates in each of the four trailing quarters. Over the past year, the stock gained 18% in price to close yesterday’s session at $419.38.
CTAS has an overall B rating, which equates to Buy in our POWR Ratings system. It has an A grade for Sentiment and Quality and a B grade for Stability. Click here to check additional ratings for CTAS (Growth, Value, and Momentum). CTAS is ranked #10 of 43 stocks in the B-rated Outsourcing – Business Services industry.
Linde plc (LIN)
Based in Guildford, U.K., LIN is an industrial gas company in North and South America, Europe, the Middle East, Africa, and the Asia Pacific. The company serves a range of industries, including healthcare, energy, manufacturing, food, beverage carbonation, fiber-optics, steel making, aerospace, chemicals, and water treatment.
On April 13, 2022, LIN announced the expansion of its La Porte, Tex., facility, thereby effectively doubling the facility’s merchant liquid production capacity. Jeff Barnhard, LIN’s Vice President of South Region, said, “This investment will further strengthen our robust supply capabilities in the U.S. Gulf Coast, allowing Linde to take advantage of growing demand.”
LIN has increased its dividend payouts for 29 consecutive years. Over the last three years, LIN’s dividend payouts have grown at an 8.6% CAGR. While LIN’s four-year average dividend yield is 1.70%, its current dividend translates to a 1.47% yield.
LIN’s sales increased 14.1% year-over-year to $8.30 billion in the fourth quarter, ended Dec. 31, 2021. Its net income came in at $1.03 billion, up 33.2% year-over-year, while its adjusted EPS came in at $2.77, up 20.4% year-over-year. Also, its adjusted operating profit was $1.84 billion, up 14.1% year-over-year.
Analysts expect LIN’s revenue to increase 7.5% year-over-year to $30.43 billion in its fiscal year 2022. Its EPS is estimated to increase 10.4% to $11.91 in 2023. It surpassed the EPS estimates in three of the trailing four quarters. And over the past year, the stock has gained 11.5% in price to close yesterday’s trading session at $319.25.
LIN has an overall B rating, which indicates a Buy in our proprietary rating system.
LIN has a B grade for Growth, Stability, Sentiment, and Quality. Within the A-rated Chemicals industry, it is ranked #26 out of 89 stocks. Click here to see the additional POWR Ratings for Value and Momentum for LIN.
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BDX shares were unchanged in premarket trading Thursday. Year-to-date, BDX has gained 10.87%, versus a -6.56% 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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