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Income investors love to target Dividend Aristocrats, S&P 500 companies that have increased dividend payouts for at least 25 consecutive years.
And it’s easy to see why they’re so beloved, as their consistency and reliability are impossible to ignore.
Interestingly enough, several members of the club – PepsiCo (PEP - Free Report) , AbbVie (ABBV - Free Report) , and Emerson Electric (EMR - Free Report) – have recently posted better-than-expected results, reflecting their successful operations.
For those interested in reaping a passive income stream, let’s take a closer look at each.
PepsiCo
Consumer staples titan PepsiCo beat the Zacks Consensus EPS estimate by 7% and reported revenue 3% ahead of expectations thanks to strong consumer demand and continued business momentum. Earnings improved 13% year-over-year, whereas revenue climbed 10% from the year-ago period.
As shown below, the company’s revenue has remained steady.
Image Source: Zacks Investment Research
Undoubtedly a major positive, PepsiCo lifted its FY23 guidance following the better-than-expected results, now expecting to deliver 10% organic revenue growth (previously 8%) and 12% core EPS growth (previously 9%).
In addition, PEP expects $7.7 billion of cash returns to shareholders throughout FY23, $6.7 billion of which will go to dividend payouts. As shown below, the company’s shareholder-friendly nature is hard to ignore.
PEP shares currently yield 2.8% annually, above the Zacks Consumer Staples sector average.
Image Source: Zacks Investment Research
AbbVie
AbbVie posted a double-beat, exceeding the Zacks Consensus EPS Estimate by 4% and delivering revenue results modestly ahead of the consensus. Both earnings and revenue declined from the year-ago period but exceeded ABBV’s expectations.
The market reacted strongly to the results, with ABBV shares seeing buying pressure post-earnings. This is illustrated by the arrow circled in the chart below.
Image Source: Zacks Investment Research
The company’s shares currently yield a sizable 4%, more than double that of the Zacks Medical sector average. Impressively, the company sports a 10% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
It’s worth noting that ABBV’s growth is forecasted to slow, with the $11.00 per share Zacks Consensus Estimate for its current fiscal year reflecting a 20% pullback on 8% lower revenues.
Emerson Electric
Emerson Electric beat the Zacks Consensus Estimate by nearly 19% and reported earnings of $1.29 per share, down modestly from the year-ago period. The company generated $3.9 billion in revenue, ahead of expectations and well lower than year-ago sales of $5.0 billion.
Impressively, EMR raised its FY23 guidance following the results, expecting net sales growth of 10.5% and free cash flow in a bracket of $2.2 – $2.3 billion. Like ABBV, the market had a strong reaction to the release, with EMR shares seeing bullish activity post-earnings.
Image Source: Zacks Investment Research
Following the release, analysts have raised their earnings expectations across several timeframes.
Image Source: Zacks Investment Research
Presently, EMR shares yield 2.2% annually, nicely above the Zacks Industrial Products sector average of 1.5%. The company sports a modest 1.5% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
Bottom Line
The bulk of the Q2 season is in the rearview mirror, with the market eluding the earnings meltdown many had feared.
And for those with a preference for income, all three Dividend Aristocrats above – PepsiCo (PEP - Free Report) , AbbVie (ABBV - Free Report) , and Emerson Electric (EMR - Free Report) – posted better-than-expected results during the period.
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3 Dividend Aristocrats Positively Surprising Investors
Income investors love to target Dividend Aristocrats, S&P 500 companies that have increased dividend payouts for at least 25 consecutive years.
And it’s easy to see why they’re so beloved, as their consistency and reliability are impossible to ignore.
Interestingly enough, several members of the club – PepsiCo (PEP - Free Report) , AbbVie (ABBV - Free Report) , and Emerson Electric (EMR - Free Report) – have recently posted better-than-expected results, reflecting their successful operations.
For those interested in reaping a passive income stream, let’s take a closer look at each.
PepsiCo
Consumer staples titan PepsiCo beat the Zacks Consensus EPS estimate by 7% and reported revenue 3% ahead of expectations thanks to strong consumer demand and continued business momentum. Earnings improved 13% year-over-year, whereas revenue climbed 10% from the year-ago period.
As shown below, the company’s revenue has remained steady.
Image Source: Zacks Investment Research
Undoubtedly a major positive, PepsiCo lifted its FY23 guidance following the better-than-expected results, now expecting to deliver 10% organic revenue growth (previously 8%) and 12% core EPS growth (previously 9%).
In addition, PEP expects $7.7 billion of cash returns to shareholders throughout FY23, $6.7 billion of which will go to dividend payouts. As shown below, the company’s shareholder-friendly nature is hard to ignore.
PEP shares currently yield 2.8% annually, above the Zacks Consumer Staples sector average.
Image Source: Zacks Investment Research
AbbVie
AbbVie posted a double-beat, exceeding the Zacks Consensus EPS Estimate by 4% and delivering revenue results modestly ahead of the consensus. Both earnings and revenue declined from the year-ago period but exceeded ABBV’s expectations.
The market reacted strongly to the results, with ABBV shares seeing buying pressure post-earnings. This is illustrated by the arrow circled in the chart below.
Image Source: Zacks Investment Research
The company’s shares currently yield a sizable 4%, more than double that of the Zacks Medical sector average. Impressively, the company sports a 10% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
It’s worth noting that ABBV’s growth is forecasted to slow, with the $11.00 per share Zacks Consensus Estimate for its current fiscal year reflecting a 20% pullback on 8% lower revenues.
Emerson Electric
Emerson Electric beat the Zacks Consensus Estimate by nearly 19% and reported earnings of $1.29 per share, down modestly from the year-ago period. The company generated $3.9 billion in revenue, ahead of expectations and well lower than year-ago sales of $5.0 billion.
Impressively, EMR raised its FY23 guidance following the results, expecting net sales growth of 10.5% and free cash flow in a bracket of $2.2 – $2.3 billion. Like ABBV, the market had a strong reaction to the release, with EMR shares seeing bullish activity post-earnings.
Image Source: Zacks Investment Research
Following the release, analysts have raised their earnings expectations across several timeframes.
Image Source: Zacks Investment Research
Presently, EMR shares yield 2.2% annually, nicely above the Zacks Industrial Products sector average of 1.5%. The company sports a modest 1.5% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
Bottom Line
The bulk of the Q2 season is in the rearview mirror, with the market eluding the earnings meltdown many had feared.
And for those with a preference for income, all three Dividend Aristocrats above – PepsiCo (PEP - Free Report) , AbbVie (ABBV - Free Report) , and Emerson Electric (EMR - Free Report) – posted better-than-expected results during the period.