Copyright Barchart
What if you learned that the smartest move isn’t to chase growth, but to collect a steady income from companies built to last? Today, investors are facing changing interest rates, inflationary issues, and an unpredictable geopolitical environment. Factors like these make dividend stocks more appealing, particularly for their stability and income generation. These companies not only reward patience but also help investors stay grounded through changing market cycles. Take the Dividend Aristocrats, a group of S&P 500 listed companies that have paid and increased their dividends for at least the last 25 consecutive years- despite ever-changing and challenging environments. However, like anything else when it comes to investing, just picking stocks at random would be like picking numbers on a roulette table. We need to find stocks worth buying- those trading below the sector’s average P/E. How I Came Up With The Following Stocks I used Barchart’s Stock Screener to find the highest-yielding companies on my watchlist. Price-to-Earnings Ratio ttm: Between 10 and 20. The price-to-earnings ratio (P/E) is a valuation metric that compares a stock’s earnings per share to its current market price- which I will then compare with the overall sector. Investing Ideas: Dividend Aristocrats. This filter further narrows down my search to long-term dividend payers. Current Analyst Rating: 3.5 – 5. I am focusing on stocks with consensus “Moderate” to “Strong Buy” ratings. Annual Dividend Yield (FWD), %: Left Blank to be sorted from highest to lowest. I got 17 results after running the screen. Here they are arranged based on highest to lowest dividend yields: Let’s kickstart this list, starting with the first Dividend Aristocrat: Amcor Plc (AMCR) P/E ttm: 11.76 Sector P/E: 23.25 Amcor is a global leader in packaging solutions, serving a wide range of customers and products. The company was founded in 1860, and today, they specialize in sterile barrier packaging and specialty cartons that are good for the environment. For example, Amcor recently launched the AmPrima Plus line in Peru, which is expected to reduce the carbon footprint by 26%, energy use by 22%, and water consumption by 19%. According to Amcor’s recent financials, sales were up ~44% year-over-year to almost $5.1 billion, though it reported a net loss of $39 million. Still, the company pays a forward annual dividend of $0.51 a share, which at the time of publication yields around 6%, making the stock the highest-yielding dividend Aristocrat on my list- and likely an attractive choice for income-focused investors. A consensus among 16 analysts rates the stock a “Moderate Buy”, a sentiment that has been consistent over the past three months. Kenvue Inc (KVUE) P/E ttm: 14.10 Sector P/E: 21.06 The next Dividend Aristocrat on my list is Kenvue Inc., a major consumer health company that was previously Johnson & Johnson's consumer healthcare division. It was established as an independent, public company in 2022 and is famously known for brands such as Band-Aid, Listerine, and more. Kenvue recently launched a “Total Quit” campaign to advocate for a world free from tobacco and nicotine. It calls on policymakers to regulate these products and expand access to cessation tools. Kenvue is the maker of Nicorette, which supports users in achieving freedom from nicotine. The company’s most recent financials reported sales down 4% year over year to $3.8 billion. Still, Kenvue’s net income rose 624% from the same quarter last year to $420 million. At the same time, the company pays a forward annual dividend of $0.83 per share, translating to an approximate 5.50% yield. Meanwhile, a consensus among 16 analysts rates KVUE stock “Moderate Buy”, a sentiment that has been shaky in the previous months. Stanley Black & Decker Inc (SWK) P/E ttm: 15.51 Sector P/E: 25.79 Last on my list is Stanley Black & Decker, a well-known tools and industrial solutions company that owns and operates iconic brands like Stanley, DEWALT, Lenox, and, of course, Black & Decker. It also offers engineered fastening and aerospace manufacturing solutions through Consolidated Aerospace Manufacturing (CAM), which the company acquired in 2020. Stanley recently reported a slight 2% dip YOY in revenue to $3.9 billion; however, it also reported a massive 1,010% growth in net income, recovering from a loss last year. Right now, the company pays a $3.32 annual dividend per share, which reflects around a 4.6% yield based on current trading prices, and a consensus among 16 analysts rates Stanley Black & Decker a “Moderate Buy” with an average score of 3.63. Final Thoughts These three Dividend Aristocrats offer consistently increasing dividends and are currently trading at valuations that look cheap- at least compared with the sector. If you’re looking to increase your income, or create a retirement portfolio to draw income from in the future, any of these companies could be a very sound choice. However, investors should always keep on top of market conditions and company-specific risks that could affect future returns.
