Five Dividend Aristocrats with Significant Upside Potential
Achieving the prestigious title of “Dividend Aristocrat” requires a company to raise its shareholder dividends for at least 20 consecutive years. These companies frequently draw attention from investors, and funds tracking the Dividend Aristocrats Index are obligated to include them in their portfolios. This high demand often leads to dividend growth stocks being fully valued, leaving limited potential for price appreciation according to analysts.
However, our team at ETF Channel has reviewed the holdings of the SPDR S&P Dividend ETF, which tracks the S&P High Yield Dividend Aristocrats Index. We’ve identified five dividend growth stocks that still show promising upside to the average analyst target prices over the next 12 months. If market predictions hold, these stocks could offer both capital gains and increasing dividend payments.
The table below summarizes the five selected stocks, including their recent prices, average 12-month analyst target prices, and potential upside percentages.
| Stock | Recent Price | Avg. Analyst 12-Mo. Target | % Upside to Target |
|---|---|---|---|
| J&J Snack Foods Corp. (Symbol: JJSF) | $122.15 | $191.67 | 56.91% |
| Carlisle Companies Inc. (Symbol: CSL) | $342.68 | $470.00 | 37.15% |
| Westlake Corp (Symbol: WLK) | $109.73 | $146.69 | 33.68% |
| Microsoft Corporation (Symbol: MSFT) | $413.29 | $509.10 | 23.18% |
| UMB Financial Corp (Symbol: UMBF) | $117.48 | $138.44 | 17.84% |
The average analyst target price reflects expected share price movements, but it’s essential to consider that these stocks are also anticipated to pay dividends during this period. Thus, the total return for investors will include both the projected capital gains and dividend yields. The table below provides a projection of the potential total returns for the next year.
| Stock | Dividend Yield | % Upside to Analyst Target | Implied Total Return Potential |
|---|---|---|---|
| J&J Snack Foods Corp. (Symbol: JJSF) | 2.55% | 56.91% | 59.46% |
| Carlisle Companies Inc. (Symbol: CSL) | 1.17% | 37.15% | 38.32% |
| Westlake Corp (Symbol: WLK) | 1.91% | 33.68% | 35.59% |
| Microsoft Corporation (Symbol: MSFT) | 0.80% | 23.18% | 23.98% |
| UMB Financial Corp (Symbol: UMBF) | 1.36% | 17.84% | 19.20% |
Another important factor to consider is the growth rate of these dividends. Analyzing the dividends paid over the previous twelve months against the prior year’s figures offers insight into their growth trajectory. The table below outlines how the dividends from these companies have developed year-over-year.
| Stock | Prior TTM Dividend | TTM Dividend | % Growth |
|---|---|---|---|
| J&J Snack Foods Corp. (Symbol: JJSF) | $2.87 | $3.03 | 5.57% |
| Carlisle Companies Inc. (Symbol: CSL) | $3.20 | $3.70 | 15.62% |
| Westlake Corp (Symbol: WLK) | $1.714 | $2.05 | 19.60% |
| Microsoft Corporation (Symbol: MSFT) | $2.79 | $3.08 | 10.39% |
| UMB Financial Corp (Symbol: UMBF) | $1.53 | $1.57 | 2.61% |
These stocks belong to our comprehensive Dividend Aristocrats List. The average analyst target prices referenced in this article come from Zacks Investment Research via Quandl.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
