Top Dividend Aristocrats with Strong Growth Potential
To earn the title of “Dividend Aristocrat,” a company must continuously increase its shareholder dividends for at least 20 years. This impressive consistency often attracts investors and funds that must own these stocks, driving up their prices. However, some of these dividend growth stocks still offer considerable upside potential, according to analysts.
At ETF Channel, we examined the SPDR S&P Dividend ETF, which tracks the S&P High Yield Dividend Aristocrats Index. We identified five dividend growth stocks that have notable upside potential compared to average analyst target prices over the next 12 months. This suggests that, if the analysts are correct, investors could see both capital gains and increased dividend payments from these companies.
The table below lists the five stocks along with their recent share prices, average analyst 12-month target prices, and potential percentage increase to reach those targets:
| Stock | Recent Price | Avg. Analyst 12-Mo. Target | % Upside to Target |
|---|---|---|---|
| Bank OZK (Symbol: OZK) | $42.97 | $48.00 | 11.71% |
| McCormick & Co Inc (Symbol: MKC) | $78.06 | $85.92 | 10.07% |
| UMB Financial Corp (Symbol: UMBF) | $106.63 | $115.86 | 8.65% |
| Polaris Inc (Symbol: PII) | $80.19 | $87.08 | 8.59% |
| Colgate-Palmolive Co. (Symbol: CL) | $99.36 | $107.76 | 8.46% |
These target prices represent the potential upside in share price over the next 12 months. Each of these companies is also expected to continue paying dividends during that time. Therefore, to estimate the expected total returns, we can combine the potential share price gains with the current dividend yields:
| Stock | Dividend Yield | % Upside to Analyst Target | Implied Total Return Potential |
|---|---|---|---|
| Bank OZK (Symbol: OZK) | 3.82% | 11.71% | 15.53% |
| McCormick & Co Inc (Symbol: MKC) | 2.15% | 10.07% | 12.22% |
| UMB Financial Corp (Symbol: UMBF) | 1.46% | 8.65% | 10.11% |
| Polaris Inc (Symbol: PII) | 3.29% | 8.59% | 11.88% |
| Colgate-Palmolive Co. (Symbol: CL) | 2.01% | 8.46% | 10.47% |
Additionally, it’s important to evaluate the growth of dividends themselves. We compared the most recent twelve months of dividends for each stock to the previous twelve months, providing insight into their dividend growth trajectory:
| Stock | Prior TTM Dividend | TTM Dividend | % Growth |
|---|---|---|---|
| Bank OZK (Symbol: OZK) | $1.42 | $1.58 | 11.27% |
| McCormick & Co Inc (Symbol: MKC) | $1.56 | $1.68 | 7.69% |
| UMB Financial Corp (Symbol: UMBF) | $1.52 | $1.56 | 2.63% |
| Polaris Inc (Symbol: PII) | $2.59 | $2.63 | 1.54% |
| Colgate-Palmolive Co. (Symbol: CL) | $1.91 | $1.98 | 3.66% |
These five stocks are part of our comprehensive Dividend Aristocrats List. The average analyst target price data in this report comes from Zacks Investment Research via Quandl.com.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
