It’s no secret that I’m a big fan of dividend stocks. The higher the yield, the better for my retirement portfolio. Even better if they’re Dividend Aristocrats with a proven track record of increasing dividends.
However, even I know that dividend yields aren’t everything. If I’d only depended on yields for my stock picks, I would have been one of the unlucky investors holding Leggett and Platt shares before the company got delisted from the S&P 500 and went on to cut its dividends by a massive 89%.
That’s why I tend to refine my stock picks with other metrics, and one of my favorites is analyst ratings. If Wall Street thinks the stock is a good buy, then I, at the very least, want to look at the company.
So, today, let’s look at three of the market's highest-rated and highest-yielding Dividend Aristocrats.
How I Screened For The Following Stocks
To get the list of stocks here, I used my pre-prepared Dividend Aristocrat Watchlist, courtesy of Barchart. Once there, I clicked on the "Div Yield" column to arrange the list from highest to lowest.
So here we have it: Realty Income, Franklin Resources, and Amcor Plc are today's highest-yielding Dividend Aristocrats, today. However, high yields don’t automatically mean great choices. For safety, I find it best to consider other factors as well.
So, to refine my selection further, I clicked on the "Screen" button. From there, I can access Barchart's Stock Screener tool, with my Aristocrats watchlist automatically set as the source data from where the screener will get the results.
Then, I clicked on the “Add Filter” field and added two criteria:
- Current Analyst Rating: Set to 4.5 to 5.0 (strong buy). This ensures that I only get results with the highest possible analyst recommendation. These analyst firms may have different analysis methods. Still, they have several things in common: They’re experts in the field, and they have access to all the data they need to formulate an informed opinion on the stock.
- Number of Analysts: Set to eight or more. What’s better than one expert’s opinion? The answer is more experts. So, I screened the list for stocks covered by no fewer than eight analysts to strengthen their ratings' impact further.
And with that, I got eight results.
As you can see, I arranged the list based on the ones with the highest yield and took the top three to discuss today.
So, without further ado, let’s begin with the top spot:
Chevron Corp (CVX)
Chevron is no stranger to my top lists and for good reasons. It is one of the world's biggest oil and gas companies and the only energy company included in the Dow Jones Industrial Average, better known as the Dow 30.
That’s not to say it’s all good news for the company. Q1’24 results were mixed, with reported earnings dropping from $6.6 billion to $5.5 billion YOY, primarily due to lower margins. However, U.S. upstream sales are doing well, and worldwide production is up 12% from the same period last year.
Despite the mixed performance, CVX stock has a 4.50 rating from 20 analyst firms, making it a strong buy. The company also pays $1.63 per share quarterly or $6.52 annually. That represents a significant rise from last year’s $1.51 quarterly payout and translates to an above average 4.02% yield.
Chevron has a comfortable 49.35% dividend payout ratio, giving it more headroom to increase dividends, as it's done for 37 consecutive years.
Abbott Laboratories (ABT)
Walk into any drugstore in any part of the world, and there’s a big chance you’ll see an Abbott Laboratories product on the shelves. The company is one of the most recognizable healthcare product providers globally and one of the most diversified. It develops and distributes nutritional products, medical testing and monitoring devices, and diagnostics equipment.
Fresh off the press, Abbott reported a 4% sales growth in Q2’24, resulting in a total quarterly sales of $10.4 billion. In the same report, Abbott announced its 402nd consecutive quarterly dividend payment of 55 cents per share, or $2.20 annually. This reflects a fitting 2.20% yield based on current prices. Also, the company has 52 years of increased dividend payouts under its belt.
With such performance, 20 analysts give ABT stock a 4.50 or a strong buy rating.
General Dynamics Corp (GD)
I previously mentioned General Dynamics in my recent cheapest Dividend Aristocrats lists. It's never a bad thing when a company comes up on multiple screens. GD provides aerospace and defense vehicles. General Dynamics Information Technology (GDIT) also offers AI solutions for defense and cybersecurity initiatives and secure mass-communication services through Mission Systems.
General Dynamics reported an 8.6% YOY bump in revenue for Q1’24. The strong quarter is also underlined by a 9.1% increase in diluted EPS. Chairman and CEO Phebe N. Novakovic says, “This is a strong start to 2024 and we remain confident in our outlook.”
The company pays a $1.42 quarterly dividend per share, or $5.68 annually, for 2024. This dividend announcement represents a 1.94% yield, a 7.6% increase over 2023’s dividend payouts, and General Dynamics' 27th consecutive year of dividend growth.
Final Thoughts
Don’t let high yields blind you to buying companies without further due diligence. Remember, the stock market has so many moving parts that it is in your best interest to study every part you can access. Analysts help by taking many of those moving parts and summarizing them into ratings. Invest wisely; you might just see your retirement nest egg bloom into something more.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
