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3 Dividend Aristocrats Analysts Love

Barchart - Tue Aug 16, 11:08AM CDT
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Dividend Aristocrats are often considered boring investments. That’s because they are slow-growth companies whose stock prices rarely experience outsized gains in short periods of time. However, income investors know that these stocks can be just what their portfolio needs to achieve safer and more reliable returns.

Dividend Aristocrats are a group of sixty-five large-cap stocks, listed on the S&P 500, that have increased their annual dividends consecutively for at least the past 25 years. That makes these stocks the most stable dividend payers in the equity market.

Year-to-date, Dividend Aristocrats, as a whole, have been outperforming the market significantly, with the S&P 500 Dividend Aristocrats ETF (NOBL) down just 3.5%, compared to the S&P 500’s ($SPX) 10.2% loss. 

Today I’m going to take a look at three Dividend Aristocrats that Wall Street analysts are very bullish on: General Dynamics (GD), Linde (LIN), and S&P Global Inc (SPGI).

General Dynamics

Headquartered in Reston, Virginia, General Dynamics (GD) is a global aerospace and defense company with a market-cap of more than $65 billion. Formed in 1954, the company operates in 45 countries and manufactures a variety of products, including nuclear submarines, Gulfstream business jets, and armored fighting vehicles.

Just a few weeks ago, on July 27th, GD released its Q2 earnings report, where it announced a 3.9% rise in second-quarter profit, from $737 million, or $2.61 per share, a year ago to $766 million, or $2.75 per share. However, their quarterly revenue of $9.2 billion missed Wall Street's $9.4 billion estimate. 

The stock has rallied about 10% since then and year-to-date the stock has been a solid outperformer, gaining 15.9%. Next quarter, analysts are estimating revenue of $3.15 per share and revenue of $9.93 billion. 

GD has increased its dividend consecutively for the past 31 years and in May raised its quarterly dividend 5.9% to $1.26 per share. Currently the stock yields 2.09%.

Seven out of the nine analysts that cover GD rate it a Strong Buy. The other two have given it a Buy rating. The median price target for the stock is $264.50, which is almost 10% higher than where it is currently trading.


Linde 

Linde (LIN) has a market cap of $155 billion and is the world’s largest producer and distributor of industrial gas, domiciled in Ireland and headquartered in Guildford, the United Kingdom. Some of the customers it supplies are in the aerospace, beverage carbonation, food, healthcare, and petroleum refining industries. It distributes oxygen, nitrogen, argon, and other atmospheric gases.

On July 28th, LIN reported impressive Q2 results. Its adjusted earnings per share was $3.10 and its sales were $8.457 billion, 15% and 12% above prior year, respectively. LIN also raised its 2022 earnings guidance, from an estimate of 11% to 13% adjusted earnings per share growth to 15% and 17%.

Since then the stock has rallied about 5%.  Its year-to-date performance is in line with S&P 500, down 10%.

In February, LIN announced a quarterly dividend of $1.17 per share, which was a 10% increase over the previous quarter's dividend. Currently the stock yields 1.5% and it has consistently raised its dividend for the past 29 years.

Ten analysts rate LIN a Strong Buy and three rate it a Buy.  The median price target for the stock is $355, which is 13.7% higher than where it’s currently trading. 


S&P Global

S&P Global Inc (SPGI) is a financial services company, based in New York, New York, with a market cap of $130 billion. It provides its customers with information and analytics and operates through 4 segments: Indices, Ratings, Market Intelligence, and Platts. 

A couple of weeks ago, on August 2nd, the company announced lower-than-expected Q2 results. Excluding $0.05 from non-recurring items, its adjusted earnings per share was $2.81, which was lower than anticipated and a decrease of 22.4% from the prior year. Revenues were $2.99 billion, slightly lower than the $3.02 billion expected.

Yet, the stock has rallied about 5% since then. However, its year-to-date performance has been disappointing, down 17.88% in 2022.

The stock currently yields 0.88% and the company has raised its dividend consecutively for an impressive 49 years. SPGI is on pace to join the exclusive Dividend Kings club next year, which is reserved for companies that have raised their dividends for at least 50 consecutive years.

Of the fifteen analysts that cover the stock, eleven have it rated Strong Buy, three rate it Moderate Buy, and one rate it a Hold. Its median price target is $406, which is about 5% higher from where it’s currently trading.


 



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