We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 Top-Ranked Dividend Aristorats to Buy for Income
Read MoreHide Full Article
Dividends provide many clear benefits, including a passive income stream, the ability to reap maximum returns through dividend reinvestment, and a buffer against drawdowns in other positions.
Many investors pivot to the Dividend Aristocrats when looking to generate an income stream. After all, it’s easy to understand why – these companies have upped their payouts for at least 25 consecutive years, which displays their reliability.
Currently, several members of the club, including IBM (IBM - Free Report) , PepsiCo (PEP - Free Report) , and Target (TGT - Free Report) , have seen their earnings outlooks shift positively, indicating bullishness among analysts.
For those interested in consistent and reliable payouts, let’s take a closer look at each.
IBM
IBM’s latest set of quarterly results excited the market, with shares moving well higher post-earnings and continuing a recent trend of post-earnings bullishness. The company touted its recent AI demand, undoubtedly to the likes of investors.
Analysts took their expectations higher for the company’s current fiscal year following the release, as we can see below.
Image Source: Zacks Investment Research
IBM shares pay a healthy dividend, yielding a sizable 3.5% annually and well above the respective Zacks Computer and Technology sector average. Dividend growth is also solid, with the company carrying an 0.8% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
Value-conscious investors may be steered away, with the current 19.4X forward earnings multiple well above the 12.7X five-year median and sitting at a five-year high. Still, investors have had little issue forking up the premium given the company’s bright outlook on AI.
PepsiCo
PepsiCo is an American multinational beverage, food, and snack corporation headquartered in New York. The stock is currently a Zacks Rank #2 (Buy), with earnings expectations rising modestly higher across several timeframes.
The revisions trend has been particularly strong for its current fiscal year, with the $7.55 Zacks Consensus EPS Estimate up 4% over the last year.
Image Source: Zacks Investment Research
PEP shares presently yield 3% annually, in line with the Zacks Consumer Staples sector average. Dividend growth has been strong, with PepsiCo boasting a 6.7% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
Target
Target has evolved from a pure brick-and-mortar retailer to an omnichannel entity, modernizing its supply chain to compete with pure e-commerce players.
The stock is a Zacks Rank #2 (Buy), with the revisions trend for its upcoming release bullish, up nearly 9% since last November and suggesting growth of 26% from the year-ago period.
Image Source: Zacks Investment Research
The company’s profitability picture is expected to improve in a big way, with consensus expectations for its current year suggesting 40% year-over-year growth amid a more favorable operating environment.
Target’s dividend growth is the most impressive of all, as the company carries a sizable 15% five-year annualized dividend growth rate. Shares presently yield 3.1% annually paired with a sustainable payout ratio sitting at 56% of its earnings.
Image Source: Zacks Investment Research
Bottom Line
Many investors pivot to the Dividend Aristocrats when looking to generate an income stream.
After all, it’s easy to understand why; these companies have upped their payouts for a minimum of 25 consecutive years, fully reflecting their reliability.
And all three members of the club above – IBM (IBM - Free Report) , PepsiCo (PEP - Free Report) , and Target (TGT - Free Report) – have all seen their near-term earnings outlooks drift higher, indicating optimism among analysts.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
3 Top-Ranked Dividend Aristorats to Buy for Income
Dividends provide many clear benefits, including a passive income stream, the ability to reap maximum returns through dividend reinvestment, and a buffer against drawdowns in other positions.
Many investors pivot to the Dividend Aristocrats when looking to generate an income stream. After all, it’s easy to understand why – these companies have upped their payouts for at least 25 consecutive years, which displays their reliability.
Currently, several members of the club, including IBM (IBM - Free Report) , PepsiCo (PEP - Free Report) , and Target (TGT - Free Report) , have seen their earnings outlooks shift positively, indicating bullishness among analysts.
For those interested in consistent and reliable payouts, let’s take a closer look at each.
IBM
IBM’s latest set of quarterly results excited the market, with shares moving well higher post-earnings and continuing a recent trend of post-earnings bullishness. The company touted its recent AI demand, undoubtedly to the likes of investors.
Analysts took their expectations higher for the company’s current fiscal year following the release, as we can see below.
Image Source: Zacks Investment Research
IBM shares pay a healthy dividend, yielding a sizable 3.5% annually and well above the respective Zacks Computer and Technology sector average. Dividend growth is also solid, with the company carrying an 0.8% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
Value-conscious investors may be steered away, with the current 19.4X forward earnings multiple well above the 12.7X five-year median and sitting at a five-year high. Still, investors have had little issue forking up the premium given the company’s bright outlook on AI.
PepsiCo
PepsiCo is an American multinational beverage, food, and snack corporation headquartered in New York. The stock is currently a Zacks Rank #2 (Buy), with earnings expectations rising modestly higher across several timeframes.
The revisions trend has been particularly strong for its current fiscal year, with the $7.55 Zacks Consensus EPS Estimate up 4% over the last year.
Image Source: Zacks Investment Research
PEP shares presently yield 3% annually, in line with the Zacks Consumer Staples sector average. Dividend growth has been strong, with PepsiCo boasting a 6.7% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
Target
Target has evolved from a pure brick-and-mortar retailer to an omnichannel entity, modernizing its supply chain to compete with pure e-commerce players.
The stock is a Zacks Rank #2 (Buy), with the revisions trend for its upcoming release bullish, up nearly 9% since last November and suggesting growth of 26% from the year-ago period.
Image Source: Zacks Investment Research
The company’s profitability picture is expected to improve in a big way, with consensus expectations for its current year suggesting 40% year-over-year growth amid a more favorable operating environment.
Target’s dividend growth is the most impressive of all, as the company carries a sizable 15% five-year annualized dividend growth rate. Shares presently yield 3.1% annually paired with a sustainable payout ratio sitting at 56% of its earnings.
Image Source: Zacks Investment Research
Bottom Line
Many investors pivot to the Dividend Aristocrats when looking to generate an income stream.
After all, it’s easy to understand why; these companies have upped their payouts for a minimum of 25 consecutive years, fully reflecting their reliability.
And all three members of the club above – IBM (IBM - Free Report) , PepsiCo (PEP - Free Report) , and Target (TGT - Free Report) – have all seen their near-term earnings outlooks drift higher, indicating optimism among analysts.