Investing Insights: Five Promising Dividend Aristocrats with Strong Growth Potential
To be recognized as a “Dividend Aristocrat,” a company must achieve the impressive goal of raising shareholder dividends annually for at least 20 years straight. This solid track record garners significant attention from investors and necessitates that funds tracking the Dividend Aristocrats Index maintain ownership of these stocks. While this high demand can lead to “fully priced” shares, where further gains may be limited, some companies still offer considerable upside.
After analyzing the SPDR S&P Dividend ETF, which mirrors the S&P High Yield Dividend Aristocrats Index, we’ve identified five dividend growth stocks that have potential for substantial appreciation over the next year. If analysts’ predictions hold true, these stocks could deliver noteworthy capital gains alongside their rising dividends.
The table below highlights these five stocks, showing their recent prices, average analyst target prices for the next 12 months, and the percentage upside to reach those targets.
| Stock | Recent Price | Avg. Analyst 12-Mo. Target | % Upside to Target |
|---|---|---|---|
| Sonoco Products Co. (Symbol: SON) | $47.75 | $60.28 | 26.25% |
| Fuller Company (Symbol: FUL) | $62.09 | $76.50 | 23.21% |
| Best Buy Inc (Symbol: BBY) | $81.90 | $99.70 | 21.73% |
| Nordson Corp. (Symbol: NDSN) | $216.38 | $259.17 | 19.77% |
| Amcor plc (Symbol: AMCR) | $9.70 | $11.57 | 19.24% |
The analyst target prices indicate potential price increases for these stocks, but it’s essential to remember that shareholders can expect dividends as well. To estimate total return, we added the dividend yield to the price upside. Below is an updated table reflecting the total return potential over the next 12 months:
| Stock | Dividend Yield | % Upside to Analyst Target | Implied Total Return Potential |
|---|---|---|---|
| Sonoco Products Co. (Symbol: SON) | 4.36% | 26.25% | 30.61% |
| Fuller Company (Symbol: FUL) | 1.43% | 23.21% | 24.64% |
| Best Buy Inc (Symbol: BBY) | 4.59% | 21.73% | 26.32% |
| Nordson Corp. (Symbol: NDSN) | 1.44% | 19.77% | 21.21% |
| Amcor plc (Symbol: AMCR) | 5.26% | 19.24% | 24.50% |
Another vital aspect of dividend growth stocks is the rate at which their dividends are increasing. We reviewed the last twelve months of dividends issued by each of these companies and compared them to the previous year’s figures, showcasing how much each company has raised its dividend.
| Stock | Prior TTM Dividend | TTM Dividend | % Growth |
|---|---|---|---|
| Sonoco Products Co. (Symbol: SON) | $2.02 | $2.07 | 2.48% |
| Fuller Company (Symbol: FUL) | $0.805 | $0.874 | 8.57% |
| Best Buy Inc (Symbol: BBY) | $3.68 | $3.76 | 2.17% |
| Nordson Corp. (Symbol: NDSN) | $2.66 | $2.92 | 9.77% |
| Amcor plc (Symbol: AMCR) | $0.494 | $0.503 | 1.82% |
These five stocks belong to our complete Dividend Aristocrats List. The average analyst target data used in this analysis comes from Zacks Investment Research via Quandl.com.
Dividend Growth Stocks: 25 Aristocrats »
Also see:
• Energy Stock Channel
• U.S. Bancorp Historical PE Ratio
• NEXA Options Chain
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
