3 High-Yielding Dividend Aristocrats to Buy Now
These quality names are part of a select group of just 68 companies in the S&P 500 that have raised their payouts for at least 25 years in a row.
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We prefer starting with extremely high-quality dividend stocks when looking for high yields, such as the Dividend Aristocrats. This is a group of just 68 stocks in the S&P 500 that have dividend increase streaks of at least 25 years.
With that sort of longevity, we can be assured the companies’ business models can stand the test of competition, recessions, and technological changes that inevitably occur. Starting with this list of Dividend Aristocrats and narrowing it down to the higher-yielding ones can produce truly great dividend stocks.
These three Dividend Aristocrats have high yields, and long-term dividend growth.
Dividend Aristocrat #1
Kenvue (KVUE), the former consumer health division of Johnson & Johnson JNJ, was spun off as a separate company in 2023. It has three segments, Self Care, Skin Health and Beauty, and Essential Health.
Self Care’s product portfolio includes cough, cold, allergy, smoking cessation, and pain care products among others. Skin Health and Beauty holds products such as face, body, hair, and sun care. Essential Health contains products for women’s health, wound care, oral care, and baby care. Well-known brands in Kenvue’s product line-up include Tylenol, Listerine, Band-Aid, Neutrogena, Nicorette, and Zyrtec.
On April 25, Kenvue announced its fourth-ever quarterly dividend of $0.20 per share to be distributed on May 22, 2024. On July 25, it announced a 2.5% increase in the quarterly dividend to $0.205 per share payable in the third quarter of 2024.
On May 7, Kenvue reported first-quarter earnings results for the period ending March 31, 2024. Revenue increased 1.1% to $3.9 billion and was $110 million better than expected. Adjusted earnings per share totaled $0.28, beating estimates by $0.03. Organic sales grew 1.9% for the quarter, which follows an 11.2% increase in the prior year.
For the quarter, pricing added 5.0% to results, which was offset by a 3.1% decrease in volume. Results were up against a tough comparable period where retailer inventory re-builds were especially strong. Self Care and Essential Health, led by Oral Care, were the best-performing businesses within the company while Skin Health and Beauty were weaker for the period. Gross profit margin expanded 330 basis points to 57.6%.
Kenvue also reaffirmed prior guidance for 2024. The company continues to expect revenue growth to be in a range of 1.0% to 3.0% and adjusted EPS in a range of $1.10 to $1.20 for the year. Kenvue consists of just consumer products businesses, which were often produced the lowest levels of growth former parent Johnson & Johnson. Therefore, we expect that Kenvue will grow EPS by 3% annually through 2029.
The company’s products, such as Band-Aid and Tylenol, are needed regardless of the state of the economy as they deal directly with consumers’ health and well-being. As trusted products, they would like continue to perform well even under adverse conditions.
KVUE has a safe dividend which currently yields 4.4%.
Dividend Aristocrat #2
Franklin Resources BEN is a global asset manager with a long and successful history. The company offers investment management (which makes up the bulk of fees the company collects) and related services to its customers, including sales, distribution, and shareholder servicing. As of March 31, 2024, assets under management (AUM) totaled $1.645 trillion for the $12 billion market cap company.
In the fiscal second quarter, total assets under management equaled $1.645 trillion, up $189.2 billion compared to last quarter, as a result of $148.3 billion from the Putnam Investments acquisition, $38.8 billion of net market change, distributions, and other, and $6.9 billion of long-term net inflows, partly offset by $4.8 billion of cash management net outflows.
For the quarter, operating revenue totaled $2.153 billion, up 12% year-over-year. On an adjusted basis, net income equaled $307 million or $0.56 per share compared to $317 million or $0.61 per share in Q2 2023. During Q2, Franklin repurchased 0.4 million shares of stock for $11.7 million. Franklin ended the quarter with $5.7 billion in cash and investments.
The biggest growth segment in the asset management industry is ETFs, which have much lower expense ratios than actively managed funds. Franklin’s actively managed funds have performed well, which serves as an advantage versus other active asset managers. BEN has aggressively made acquisitions in recent years to accelerate its growth. Franklin has been acquiring alternative AUM through purchases such as Legg Mason, Lexington Partners, and Alcentra. It also closed its acquisition of Putnam Investments on January 1, 2024. At the time, Putnam had $148 billion in AUM.
BEN stock currently yields 5.4%.
Dividend Aristocrat #3
Amcor plc AMCR is one of the world's most prominent designers and manufacturers of packaging for food, pharmaceutical, medical, and other consumer products. The company emphasizes making responsible packaging that is lightweight, recyclable, and reusable.
Amcor reported its third-quarter results for fiscal year 2024 on April 30. The company fiscal year ends in June. Amcor's fiscal quarter ending March 2024 demonstrated resilience despite market challenges, with notable increases in key financial metrics. GAAP diluted EPS reached 12.9 cents, with GAAP net income hitting $187 million. Adjusted EBIT rose by 3% to $397 million on a comparable constant currency basis, while adjusted EPS saw a 1% increase to 17.8 cents.
The company's improved financial performance in the third quarter was attributed to robust underlying business growth and enhanced earnings leverage. Despite a decline in overall volumes compared to the previous year, Amcor exceeded expectations, with sequential volume improvement observed across various categories and regions.
Looking ahead, Amcor anticipates sustained growth, with Adjusted EPS for fiscal 2024 projected to range from 68.5 to 71 cents and adjusted free cash flow estimated at approximately $850 million to $950 million. The company plans to allocate around $70 million towards share repurchases as part of its ongoing program.
AMCR stock currently yields 4.9%.
At the time of publication, Ciura had no positions in any stocks mentioned.