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Five Dividend Aristocrats with Strong Growth Potential
To earn the title of “Dividend Aristocrat,” a company must consistently raise its shareholder dividends for at least 20 consecutive years. This remarkable achievement often captures investor interest. Moreover, funds that track the Dividend Aristocrats Index are required to include these companies in their portfolios, which can create high demand for their shares. As a result, some dividend growth stocks may become “fully priced,” providing limited upside to analyst targets.
At ETF Channel, we’ve analyzed the holdings of the SPDR S&P Dividend ETF, which follows the S&P High Yield Dividend Aristocrats Index, to identify five dividend growth stocks that still offer significant upside potential relative to average analyst price targets for the next 12 months. Should analysts be correct, these stocks could yield capital gains in addition to their increasing dividend payouts.
The table below shows these five stocks along with their recent prices, average analyst target prices for 12 months, and the percentage upside to those targets.
| Stock | Recent Price | Avg. Analyst 12-Mo. Target | % Upside to Target |
|---|---|---|---|
| AptarGroup Inc. (Symbol: ATR) | $169.88 | $195.20 | 14.90% |
| Texas Instruments Inc. (Symbol: TXN) | $198.20 | $212.40 | 7.16% |
| Southern Company (Symbol: SO) | $88.14 | $93.47 | 6.05% |
| Chubb Ltd (Symbol: CB) | $285.11 | $301.22 | 5.65% |
| Chevron Corporation (Symbol: CVX) | $161.63 | $170.00 | 5.18% |
The average analyst target prices are predictions for the share price only. Each of these stocks is also expected to distribute dividends during this time frame, meaning the potential total return combines the share price upsides with expected dividend yields. Our calculations add the current yield to analyst target price upside to estimate the total return potential over 12 months:
| Stock | Dividend Yield | % Upside to Analyst Target | Implied Total Return Potential |
|---|---|---|---|
| AptarGroup Inc. (Symbol: ATR) | 1.06% | 14.90% | 15.96% |
| Texas Instruments Inc. (Symbol: TXN) | 2.74% | 7.16% | 9.90% |
| Southern Company (Symbol: SO) | 3.27% | 6.05% | 9.32% |
| Chubb Ltd (Symbol: CB) | 1.28% | 5.65% | 6.93% |
| Chevron Corporation (Symbol: CVX) | 4.03% | 5.18% | 9.21% |
It’s also essential to consider the growth rate of the dividends themselves. We’ve reviewed the trailing twelve months of dividends that shareholders of each company have received, comparing it with dividends from the prior year. This provides insight into how much the dividends have grown over the last year.
| Stock | Prior TTM Dividend | TTM Dividend | % Growth |
|---|---|---|---|
| AptarGroup Inc. (Symbol: ATR) | $1.58 | $1.72 | 8.86% |
| Texas Instruments Inc. (Symbol: TXN) | $5.02 | $5.26 | 4.78% |
| Southern Company (Symbol: SO) | $2.78 | $2.86 | 2.88% |
| Chubb Ltd (Symbol: CB) | $3.38 | $3.54 | 4.73% |
| Chevron Corporation (Symbol: CVX) | $6.04 | $6.52 | 7.95% |
All five stocks above are included in our comprehensive Dividend Aristocrats List. The average analyst target price data used in this article originates from Zacks Investment Research via Quandl.com.
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Dividend Growth Stocks: 25 Aristocrats »
Also see:
NXPI RSI
PTE Split History
MLHR shares outstanding history
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
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