Five Dividend Aristocrats Still Offering Growth Potential
To achieve the title of “Dividend Aristocrat,” a company must consistently raise its shareholder dividends for a minimum of 20 consecutive years. This impressive record attracts significant investor interest, and funds tracking the Dividend Aristocrats Index are required to include these companies in their portfolios. However, high demand can sometimes lead to stocks becoming “fully priced,” limiting potential gains from analyst targets.
At ETF Channel, we examined the holdings in the SPDR S&P Dividend ETF, which follows the S&P High Yield Dividend Aristocrats Index. We identified five dividend growth stocks that still have promising upside compared to analysts’ 12-month target prices. If analysts’ predictions hold true, these companies could offer both capital gains and increasing dividend payments.
Below is a table highlighting these five stocks, including their recent share prices, average 12-month analyst target prices, and the percentage upside to reach those targets.
| Stock | Recent Price | Avg. Analyst 12-Mo. Target | % Upside to Target |
|---|---|---|---|
| General Dynamics Corp (Symbol: GD) | $265.22 | $327.40 | 23.44% |
| Fuller Company (Symbol: FUL) | $71.97 | $86.50 | 20.19% |
| Sonoco Products Co. (Symbol: SON) | $50.46 | $60.28 | 19.47% |
| S&P Global Inc (Symbol: SPGI) | $500.51 | $588.59 | 17.60% |
| Abbott Laboratories (Symbol: ABT) | $113.29 | $132.59 | 17.04% |
The 12-month analyst targets are just projections for share prices. Each of these stocks is also expected to distribute dividends during this period. Thus, the total expected returns can be calculated by adding the anticipated price increase to the dividend yield. We have provided this total return potential in the following table:
| Stock | Dividend Yield | % Upside to Analyst Target | Implied Total Return Potential |
|---|---|---|---|
| General Dynamics Corp (Symbol: GD) | 2.14% | 23.44% | 25.58% |
| Fuller Company (Symbol: FUL) | 1.24% | 20.19% | 21.43% |
| Sonoco Products Co. (Symbol: SON) | 4.12% | 19.47% | 23.59% |
| S&P Global Inc (Symbol: SPGI) | 0.73% | 17.60% | 18.33% |
| Abbott Laboratories (Symbol: ABT) | 1.94% | 17.04% | 18.98% |
Another important factor to examine with dividend growth stocks is how much the dividends themselves are increasing. We reviewed the trailing twelve months’ dividends for each stock and compared them to the previous twelve months to gauge the growth rate.
| Stock | Prior TTM Dividend | TTM Dividend | % Growth |
|---|---|---|---|
| General Dynamics Corp (Symbol: GD) | $5.22 | $5.58 | 6.90% |
| Fuller Company (Symbol: FUL) | $0.805 | $0.874 | 8.57% |
| Sonoco Products Co. (Symbol: SON) | $2.02 | $2.07 | 2.48% |
| S&P Global Inc (Symbol: SPGI) | $3.6 | $3.64 | 1.11% |
| Abbott Laboratories (Symbol: ABT) | $2.04 | $2.2 | 7.84% |
These five stocks are part of our comprehensive Dividend Aristocrats List. The average analyst target prices used in this analysis were sourced from Zacks Investment Research via Quandl.com.
Dividend Growth Stocks: 25 Aristocrats »
Also see:
• Top Stocks Held By David Einhorn
• CVCY Historical Stock Prices
• Institutional Holders of NWG
The views and opinions expressed herein are the author’s and do not necessarily reflect those of Nasdaq, Inc.
