Dividend aristocrats are well-established and well-performing companies that enjoy sharing their profits with their shareholders in the form of dividends. Their long history of dividend payments and consistent dividend increases appeal to a large number of investors who are seeking regular income and stability.
Against this backdrop, it could be wise to invest in dividend aristocrats stocks Emerson Electric Co. (EMR), Cardinal Health, Inc. (CAH), and Dover Corporation (DOV) for stability and long-term gains.
Owing to contributing factors like increased consumer spending, exports, federal government spending, and a rise in business investment, the U.S. real GDP grew at 2.8% during the third quarter of 2024. While the growth was optimistic, it lagged behind the second quarter's GDP growth of 3.0%, showing mixed signs.
During October alone, personal income increased by $147.4 billion or 0.6%, and disposable personal income increased by $144.1 billion or 0.7% over the same period.
Amid the economy’s current trends, investors could lean towards stocks of companies that pay regular dividends to maintain stability and add a regular income stream. In the dividend stocks segment, dividend aristocrats are companies falling in the S&P 500 index, which increases the size of their payouts annually.
Dividend aristocrats are large-sized, well-established entities with stable profits and high dividend yields and who have maintained dividend payments to shareholders for at least 25 straight years. They also offer safeguards against market turmoil and allow optimum diversification.
Therefore, dividend aristocrats are an ideal addition to enhance investment portfolio diversification, combat market uncertainties, and gain reliable income. Considering these encouraging trends, let’s delve into the fundamentals of the top dividend aristocrats who have grown their dividends for more than 25 years.
Emerson Electric Co. (EMR)
EMR is a technology and software company that offers various solutions internationally. The company operates in seven segments: Final Control; Measurement & Analytical; Discrete Automation; Safety & Productivity; Control Systems & Software; Test & Measurement; and AspenTech.
On November 19, EMR made a strategic investment through its corporate venture capital arm, Emerson Ventures, in EECOMOBILITY, a startup that specializes in advanced battery testing and monitoring software. The company’s strategic investment supports advanced AI software for rapid production testing of batteries.
On November 5, EMR declared a quarterly cash dividend increase to $0.5275 per share of common stock, which was paid on December 10, 2024, to stockholders of record on November 15, 2024.
EMR has raised its dividend for 28 consecutive years. It pays an annual dividend of $2.11, which translates to a yield of 1.61% at the current share price. Its four-year average dividend yield is 2.19%. Moreover, the company’s dividend payouts have increased at a CAGR of 1.3% over the past five years.
Also, on the same date, the company announced three key strategic and financial actions for the final phase of its portfolio transformation into an industrial technology leader focused on automation. This included a proposal to acquire the remaining outstanding shares of AspenTech for $240 per share in cash, a review of strategic alternatives, and plans to repurchase shares.
EMR reported net sales of $4.62 billion for the fourth quarter that ended September 30, 2024, up 12.9% year-over-year. Its adjusted segment EBITA increased 15.8% from the prior year’s quarter to $1.21 billion. The company’s net earnings came in at $968 million, indicating growth of 31.2% year-over-year, and its adjusted EPS grew by 14.7% from the year-ago value to $1.48.
Furthermore, the company’s free cash flow increased 10.1% from the previous year’s period to $905 million.
Analysts expect EMR’s revenue and EPS for the first quarter (ending December 2024) to grow 2.8% and 5.1% year-over-year to $4.23 billion and $1.28, respectively. Also, the company topped the consensus EPS estimates in all of the four trailing quarters, which is promising.
Shares of EMR have surged 20.9% over the past six months and 45% over the past year to close the last trading session at $131.16.
EMR’s solid fundamentals are reflected in its POWR Ratings. It has an overall rating of B, translating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
EMR has a B grade for Momentum and Quality. It is ranked #34 out of 89 stocks in the Industrial - Equipment industry.
In addition to the POWR Ratings we’ve stated above, we also have EMR ratings for Growth, Value, Sentiment, and Stability. Get all EMR ratings here.
Cardinal Health, Inc. (CAH)
CAH operates internationally as a healthcare services and products company. The company provides customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories, physician offices, and patients in the home. It operates in Pharmaceutical and Specialty Solutions, and Global Medical Products and Distribution segments.
On November 20, CAH released its Kendall SCD SmartFlow™ compression system, the next generation of the Kendall™ compression series providing enhanced clinician and patient experience. The new system helps prevent venous thromboembolism events, enhance blood circulation, and treat pain and swelling related to venous stasis.
On November 11, CAH entered into definitive agreements to acquire two companies. CAH will purchase majority stakes of GI Alliance for approximately $2.8 billion in cash. It will also acquire the Advanced Diabetes Supply Group for around $1.1 billion in cash. The strategic acquisition of the two companies will accelerate CAH's strategic growth areas and enhance patient care.
On November 5, CAH's Board of Directors approved a quarterly dividend of $0.5056 per share. The dividend will be paid on January 15, 2025, to shareholders of record at the close of business on January 2, 2025.
CAH’s annual dividend payment of $2.02 translates to a yield of 1.72% at the current share price. Its four-year average dividend yield is 2.78%. Also, the company’s dividend payouts have increased at a CAGR of 1% over the past three years. CAH has raised its dividends for 29 consecutive years.
For the first quarter that ended September 30, 2024, CAH posted revenue of $52.28 billion, and its non-GAAP operating earnings grew 12.2% from the year-ago value to $625 million. Also, the company’s non-GAAP net earnings attributable to CAH stood at $460 million or $1.88 per common share, reflecting growth of 7% and 9.3% from the prior-year quarter, respectively.
For the fiscal year 2025, the company raised its guidance for non-GAAP EPS attributable to CAH to $7.75 to $7.90 from the previous range of $7.55 to $7.70. It also updated its Pharmaceutical and Specialty Solutions segment profit outlook to 4% to 6% growth from the prior 1% to 3% range.
Street expects CAH’s EPS for the third quarter (ending March 2025) to increase 5.2% year-over-year to $2.19. For the fiscal year (ending June 2025), the company’s EPS is expected to grow 3.8% year-over-year to $7.82. Also, the company has topped the consensus EPS estimates in all four trailing quarters.
CAH’s stock has gained 18.7% over the past six months and 8.8% over the past year to close the last trading session at $117.46.
CAH’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
The stock has a B grade for Value and Sentiment. CAH is ranked #12 among 62 stocks in the Medical - Services industry.
Click here to access CAH’s Quality, Growth, Stability, and Momentum ratings.
Dover Corporation (DOV)
DOV offers equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services globally. It operates in segments like: Engineered Products; Clean Energy & Fueling; Imaging & Identification; Pumps & Process Solutions; and Climate & Sustainability Technologies.
On December 11, DOV’s wholly owned subsidiary Markem-Imaje launched its Ultraply ribbons and self-adhesive labels range. Amid the rapid rise of e-commerce and direct-to-consumer models, the new range addresses the growing demand for high-quality, phone-scannable 2D barcodes with its innovative Print and Apply (P&A) labelers.
On November 7, DOV’s Board of Directors declared a regular quarterly cash dividend of $0.515 per share, payable on December 16, 2024, to shareholders of record as of November 29, 2024.
DOV’s annualized dividend of $2.06 per share translates to a dividend yield of 1.02% on the current share price. Its four-year average yield is 1.34%. Its dividend payouts have increased at 1.1% CAGR over the past five years. Also, DOV has raised its dividends for 68 consecutive years.
For the third quarter ended September 30, 2024, DOV’s revenue increased marginally year-over-year to $1.98 billion. The company’s gross profit grew 3.2% from the year-ago value to $763.19 million. Adjusted earnings from continuing operations amounted to $313.99 million and $2.27 per share, up 4.3% and 6.1% from the prior year’s quarter, respectively.
For the fiscal year 2024, the company expects revenue growth of 1% to 3%. Its adjusted EPS from continuing operations is expected to be between $8.08 and $8.18.
Street expects DOV’s revenue for the fiscal year (ending December 2025) to increase 5.1% year-over-year to $8.20 billion, and its EPS is expected to grow 14.9% year-over-year to $9.39 for the same period. Further, the company has surpassed the consensus EPS estimates in all of the trailing four quarters.
Over the past six months, DOV’s stock has surged 10.8% and 38.4% over the past year to close the last trading session at $201.36.
DOV’s sound fundamentals are reflected in its POWR Ratings. The stock has a B grade for Momentum, Quality, and Stability. Within the A-rated Industrial - Machinery industry, DOV is ranked #43 out of 79 stocks.
Click here to access additional ratings of DOV for Sentiment, Value, and Growth.
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EMR shares were trading at $130.63 per share on Friday afternoon, down $0.53 (-0.40%). Year-to-date, EMR has gained 36.74%, versus a 28.36% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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