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Not all dividend-paying stocks are the same, with some companies belonging to an elite group known as the Dividend Aristocrats.
But what is this group, and why is it so elite?
Dividend Aristocrats are classified as companies with at least 25 consecutive annual dividend increases. In addition, the company must be a member of the S&P 500.
With a long track record of rewarding shareholders handsomely, it’s easy to see why Dividend Aristocrats are generally on any income investor’s radar.
Interestingly enough, three companies – Philip Morris International (PM - Free Report) , Microsoft (MSFT - Free Report) , and Nike (NKE - Free Report) – are just a few years away from joining the elite club.
Below is a chart illustrating the share performance of all three companies in 2023, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
For those interested in building a cash pile from dividends, let’s take a closer look at each one.
Philip Morris International
Philip Morris International is a leading international tobacco company working to deliver a smoke-free future, evolving its portfolio for the long term to include products outside of the tobacco and nicotine sector.
The company’s annual dividend presently stands tall at 5.2%, nearly double the Zacks Consumer Staples sector average.
Image Source: Zacks Investment Research
In addition, shares don’t appear stretched regarding valuation, with the current 15.4X forward earnings multiple sitting a few ticks below the five-year median and Zacks sector average.
Image Source: Zacks Investment Research
As we can see in the chart below, Philip Morris has consistently displayed a commitment to its shareholders.
Image Source: Zacks Investment Research
Microsoft
We’ve all become familiar with Microsoft, the legendary tech titan that’s a staple in many portfolios.
The company’s shares provide exposure to technology and passive income; MSFT’s annual dividend yield sits at 1.1%, nicely above the Zacks Computer and Technology sector average.
Image Source: Zacks Investment Research
Impressively, Microsoft’s payout has grown by a double-digit 10% just over the last five years.
Image Source: Zacks Investment Research
The company posted mixed quarterly results in its latest release, exceeding the Zacks Consensus EPS Estimate by 2% but reporting revenue marginally under expectations.
Nonetheless, the market took the results nicely, sending shares upward post-earnings. The green arrow in the chart below illustrates this.
Image Source: Zacks Investment Research
NIKE
NIKE designs, develops, and markets athletic footwear, apparel, equipment, and services for men, women, and children worldwide.
The stock is presently a Zacks Rank #2 (Buy), with the company’s earnings outlook drifting higher across nearly all timeframes in the near term.
Image Source: Zacks Investment Research
NIKE’s annual dividend yield sits at 1.2%, nicely above the Zacks Consumer Discretionary average of 0.9%.
Image Source: Zacks Investment Research
Similar to MSFT, the company has grown its payout by more than 10% over the last five years.
Bottom Line
Dividend payouts boost any portfolio, providing a passive income stream and limiting the impact of drawdowns in other positions.
And when it comes to the top dividend-paying stocks, Dividend Aristocrats are in a league of their own.
All three companies above – Philip Morris International (PM - Free Report) , Microsoft (MSFT - Free Report) , and Nike (NKE - Free Report) – are just a few years away from joining the elite club.
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3 Soon-To-Be Dividend Aristocrats
Not all dividend-paying stocks are the same, with some companies belonging to an elite group known as the Dividend Aristocrats.
But what is this group, and why is it so elite?
Dividend Aristocrats are classified as companies with at least 25 consecutive annual dividend increases. In addition, the company must be a member of the S&P 500.
With a long track record of rewarding shareholders handsomely, it’s easy to see why Dividend Aristocrats are generally on any income investor’s radar.
Interestingly enough, three companies – Philip Morris International (PM - Free Report) , Microsoft (MSFT - Free Report) , and Nike (NKE - Free Report) – are just a few years away from joining the elite club.
Below is a chart illustrating the share performance of all three companies in 2023, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
For those interested in building a cash pile from dividends, let’s take a closer look at each one.
Philip Morris International
Philip Morris International is a leading international tobacco company working to deliver a smoke-free future, evolving its portfolio for the long term to include products outside of the tobacco and nicotine sector.
The company’s annual dividend presently stands tall at 5.2%, nearly double the Zacks Consumer Staples sector average.
Image Source: Zacks Investment Research
In addition, shares don’t appear stretched regarding valuation, with the current 15.4X forward earnings multiple sitting a few ticks below the five-year median and Zacks sector average.
Image Source: Zacks Investment Research
As we can see in the chart below, Philip Morris has consistently displayed a commitment to its shareholders.
Image Source: Zacks Investment Research
Microsoft
We’ve all become familiar with Microsoft, the legendary tech titan that’s a staple in many portfolios.
The company’s shares provide exposure to technology and passive income; MSFT’s annual dividend yield sits at 1.1%, nicely above the Zacks Computer and Technology sector average.
Image Source: Zacks Investment Research
Impressively, Microsoft’s payout has grown by a double-digit 10% just over the last five years.
Image Source: Zacks Investment Research
The company posted mixed quarterly results in its latest release, exceeding the Zacks Consensus EPS Estimate by 2% but reporting revenue marginally under expectations.
Nonetheless, the market took the results nicely, sending shares upward post-earnings. The green arrow in the chart below illustrates this.
Image Source: Zacks Investment Research
NIKE
NIKE designs, develops, and markets athletic footwear, apparel, equipment, and services for men, women, and children worldwide.
The stock is presently a Zacks Rank #2 (Buy), with the company’s earnings outlook drifting higher across nearly all timeframes in the near term.
Image Source: Zacks Investment Research
NIKE’s annual dividend yield sits at 1.2%, nicely above the Zacks Consumer Discretionary average of 0.9%.
Image Source: Zacks Investment Research
Similar to MSFT, the company has grown its payout by more than 10% over the last five years.
Bottom Line
Dividend payouts boost any portfolio, providing a passive income stream and limiting the impact of drawdowns in other positions.
And when it comes to the top dividend-paying stocks, Dividend Aristocrats are in a league of their own.
All three companies above – Philip Morris International (PM - Free Report) , Microsoft (MSFT - Free Report) , and Nike (NKE - Free Report) – are just a few years away from joining the elite club.