As a supplement to this article, please note that Kiplinger has published an on-line slide-show detailing the latest 2022 66 S&P Dividend Aristocrats. The article, entitled 66 Best Dividend Stocks You Can Count On, is by Dan Burrows, a contributing editor.
Most of this collection of 66 S&P 500 Dividend Aristocrats is too pricey to justify their skinny dividends. However, four (counting three of the top ten plus one in the top fifteen), live up to the dogcatcher ideal of paying annual dividends (from a $ 1K investment) exceeding their single share prices.
In the current market adjustment, it is now possible for these four, Leggett & Platt, Inc. (LEG), Amcor plc (AMCR), Franklin Resources, Inc. (BEN), and People’s United Financial, Inc. (PBCT) to stay fair-priced with their annual yield (from $ 1K invested) meeting or exceeding their single share prices at this time.
PBCT will merge with M&T Bank sometime this year and will leave the Aristocrat ranks. Its generous dividend will be absorbed by the new entity. AT & T’s announced dividend cut disqualified it this year as an Aristocrat. LEG is a mid-cap and may leave the Aristocrat ranks soon, as well.
As we are now two-years removed from the anniversary of the 2020 Ides of March dip, the time to snap-up those four lingering top yield Aristocrat dogs is at hand … unless another big bearish drop in price looms ahead. (At which time your strategy would be to add to your position in any of those you then hold.)
Actionable Conclusions (1-10): Analysts Predict 18.68% To 34.41% Top Ten Aristocrat Net Gains To April, 2023
Five of the top ten Aristocrats by yield were verified as being among the top ten gainers for the coming year based on analyst 1-year target prices. (They are tinted gray in the chart below.) Thus, this yield-based March 23 forecast for Aristocrats (as graded by Brokers) was 50% accurate.
Estimated dividend-returns from $ 1000 invested in each of these highest-yielding stocks and their aggregate one-year analyst median target prices, as reported by YCharts, produced the 2022-23 data points for the projections below. Note: target prices from lone analysts were not used. Ten probable profit-generating trades projected to March 23, 2023 were:
Franklin Resources Inc was projected to net $ 344.14 based on target price estimates from eleven analysts, plus annual dividend, less broker fees. The Beta number showed this estimate is subject to risk / volatility 15% greater than the market as a whole.
VF Corp (VFC) was projected to net $ 339.88, based on dividends, plus the median of target price estimates from twenty-two analysts, less broker fees. The Beta number showed this estimate subject to risk / volatility 42% greater than the market as a whole.
Air Products and Chemicals (APD) was projected to net $ 334.88, based on dividends, plus the median of target price estimates from twenty-one analysts, less broker fees. The Beta number showed this estimate subject to risk / volatility 13% less than the market as a whole.
Leggett & Platt Inc was projected to net $ 309.02, based on dividends, plus the median of target price estimates from four analysts, less broker fees. The Beta number showed this estimate subject to risk / volatility 44% greater than the market as a whole.
McDonald’s Corp (MCD) was projected to net $ 208.56, based on the median target price estimates from thirty-two analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk / volatility 39% less than the market as a whole.
3M Co (MMM) was projected to net $ 201.85, based on the median of target price estimates from nineteen analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to risk / volatility 3% less than the market as a whole.
Colgate-Palmolive Co (CL) was projected to net $ 199.80 based on dividends, plus the median of target price estimates from twenty-one analysts, less broker fees. The Beta number showed this estimate subject to risk / volatility 37% less than the market as a whole.
Federal Realty Investment Trust (FRT) was projected to net $ 194.58, based on a median of target estimates from eighteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk / volatility 14% more than the market as a whole.
Medtronic plc (MDT) netted $ 193.05 based on a median target price estimate from twenty-four analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk / volatility 26% less than the market as a whole.
Realty Income Corp (O) was projected to net $ 186.77, based on the median of target price estimates from eighteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk / volatility 21% less-than the market as a whole.
The average net gain in dividend and price was estimated to be 25.13% on $ 10k invested as $ 1k in each of these ten stocks. The average Beta ranking showed these estimates subject to risk / volatility 2% less than the market as a whole.
The Dividend Dogs Rule
Stocks earned the “dog” moniker by exhibiting three traits: (1) paying reliable, repeating dividends, (2) their prices fell to where (3) yield (dividend / price) grew higher than their peers. Thus, the highest yielding stocks in any collection became known as “dogs.” More precisely, these are, in fact, best called, “underdogs”, even if they are “Aristocrats.”
Top 50 Dividend Aristocrats By Broker Targets
This scale of broker-estimated upside (or downside) for stock prices provides a measure of market popularity. Note: no broker coverage or single broker coverage produced a zero score on the above scale. These broker estimates can be seen as the emotional component (as opposed to the strictly monetary and objective dividend / price yield-driven report below). As noted above, these scores may also be regarded as contrarian.
Top 50 Dividend Aristocrats By Yield
Actionable Conclusions (11-20): Ten Top Stocks By Yield Are The April Dogs Of The Dividend Aristocrats
Top ten Aristocrats selected 2/18/21 by yield represented eight of eleven Morningstar sectors. In first place was the technology sector Aristocrat, International Business Machines Corp (IBM) .
Two consumer cyclical representatives took the second and fourth places, Leggett & Platt Inc and Amcor PLC . Following, in third place, was the first of two real estate representatives, Realty Income Corp the other placed tenth, Federal Realty Investment Trust .
Thereafter, one financial services firm placed fifth, Franklin Resources Inc  and an energy representative placed sixth, Exxon Mobil (XOM). One healthcare representative in the top ten placed seventh, Walgreens Boots Alliance (WBA) .
Finally, the industrials and consumer defensive representatives, placed eighth and ninth, 3M Coand Kimberly-Clark Corp (KMB) . These completed the pre-April S & P500 Dividend Aristocrats top-ten, by yield.
Actionable Conclusions: (21-30) Ten Aristocrats Showed 15.25% To 31.74% Upsides To April, 2023; (31) On The Downside Were Seven -0.27% to 10.94% Losers
To quantify top-yield rankings, analyst median-price target estimates provided a “market sentiment” gauge of upside potential. Added to the simple high-yield metrics, analyst median price-target-estimates became another tool to dig-out bargains.
Analysts Estimated A 21.79% Advantage For 5 Highest-Yield, Lowest-Priced, Of Top Ten Dividend Aristocrats To April, 2023
Ten top Aristocrats were culled by yield for their monthly update. Yield (dividend / price) results verified by YCharts did the ranking.
As noted above, top ten Aristocrats selected 3/23/22 represented eight of eleven sectors in the Morningstar sector scheme.
Actionable Conclusions: Analysts Estimated 5 Lowest-Priced Of Ten Highest-Yield Dividend Aristocrats (32) Delivering 23.47% Vs. (33) 19.27% Net Gains by All Ten, Come April, 2023
$ 5000 invested as $ 1k in each of the five lowest-priced stocks in the top ten Dividend Aristocrats kennel by yield were predicted (by analyst 1-year targets) to deliver 21.79% more gain than $ 5,000 invested as $ .5k in all ten. The second lowest-priced Aristocrats top-yield stock, Franklin Resources Inc, was projected to deliver the best net gain of 34.41%.
The five lowest-priced top-yield Aristocrats as of March 23 were: Amcor PLC; Franklin Resources; Leggett & Platt Inc; Walgreens Boots Alliance Inc; Realty Income Corp, with prices ranging from $ 11.22 to $ 66.90
The five higher-priced top-yield Aristocrats as of March 23 were: Exxon Mobil Corp; Federal Realty Investment Trust; Kimberly-Clark Corp; International Business Machines Corp; 3M Co, whose prices ranged from $ 83.13 to $ 147.68.
This distinction between five low-priced dividend dogs and the general field of ten reflected Michael B. O’Higgins’ “basic method” for beating the Dow. The scale of projected gains based on analyst targets added a unique element of “market sentiment” gauging upside potential. It provided a here-and-now equivalent of waiting a year to find out what might happen in the market. Caution is advised, however, since analysts are historically only 20% to 90% accurate on the direction of change and just 0% to 20% accurate on the degree of change.
If somehow you missed the suggestion of the four stocks ripe for picking at the start of the article, here is a repeat of the list at the end:
The following 4 (as of 3/23/22) realized the ideal of offering annual dividends from a $ 1K investment exceeding their single share prices: Leggett & Platt Inc, Amcor PLC, Franklin Resources Inc, and People’s United Financial Inc.
Price Drops or Dividend Increases Could Get All Ten Top Aristocrat Dogs Back to “Fair Price” Rates For Investors
Since three of the top ten Aristocrats shares are now priced less than the annual dividends paid out from a $ 1K investment, the following charts compare those three plus seven at current prices. Fair pricing, when all ten top dogs conform to the ideal, is displayed in the middle chart. Finally, the dollar and percentage differences between current and fair prices are documented in the bottom chart.
S & P500 Aristocrats Alphabetical by Ticker Symbol
The net gain / loss estimates above did not factor in any foreign or domestic tax problems resulting from distributions. Consult your tax advisor regarding the source and consequences of “dividends” from any investment.
Stocks listed above were suggested only as possible reference points for your Dividend Aristocrats dog stock purchase or sale research process. These were not recommendations.
Graphs and charts were compiled by Rydlun & Co., LLC from data derived from www.indexarb.com; YCharts.com; finance.yahoo.com; analyst mean target price by YCharts. Dog art: Open source dog art from dividenddogcatcher.com