Dividend stocks often offer a safe haven in times of market volatility. That’s especially true of companies that regularly raise their dividends.
With that in mind, Morningstar put together a list of three “dividend aristocrats” that are popular with investors. A dividend aristocrat is a company that has increased its dividend for at least 25 straight years.
Related: Goldman Sachs fund manager makes the case for these 3 dividend stocks
Here’s the terrific trio:
Albemarle
(ALB) -), the world’s largest lithium producer
Morningstar moat (durable competitive advantage) rating: narrow. Morningstar fair value estimate: $350. Wednesday price quote: $159.05. Forward dividend yield: 0.74%.
“Lithium is our preferred resource [for electric vehicle batteries,] as lithium is the vital resource needed in all [of them],” wrote Morningstar analyst Seth Goldstein. “Albemarle is our top pick.”
As adoption of EVs increases, “we expect high-double-digit annual growth in global lithium demand,” he said.
“In response, Albemarle plans to expand its annual lithium production capacity from 200,000 metric tons in 2022 to 500,000-600,000 metric tons by 2030.”
Goldstein sees Albemarle continuing to increase its lithium refining capacity, largely through brownfield expansions at current operations. The company also is developing a fully integrated greenfield project in the U.S.
Medtronic
(MDT) -), the medical device giant.
Morningstar moat rating: wide. Morningstar fair value estimate: $112. Wednesday price quote: $76.50. Forward dividend yield: 3.2%.
“Medtronic's standing as the largest pure-play medical-device maker remains a force to be reckoned with in the medtech landscape,” wrote Morningstar analyst Debbie Wang.
“Pairing its diversified product portfolio aimed at a wide range of chronic diseases with its expansive selection of products for acute care in hospitals has bolstered Medtronic's position as a key partner for its hospital customers.”
As for its history, “Medtronic has focused on innovation, designing and manufacturing devices to address cardiac care, neurological and spinal conditions, and diabetes,” Wang said.
“It is often first to market with new products and has invested heavily in internal research and development efforts as well as acquiring emerging technologies.”
Enterprise Products Partners
(EPD) -), a transporter of oil and gas.
Morningstar moat rating: wide. Morningstar fair value estimate: $27.50. Wednesday price quote: $27. Forward dividend yield: 7.48%.
Note that the stock is trading right around Morningstar’s fair value estimate. That indicates investors should hold off buying for now, according to the research firm. It’s “best left on a watchlist for now,” wrote Morningstar investment specialist Susan Dziubinski.
Looking at the company’s fundamentals, “Enterprise's geographical and asset diversity allow it to pursue growth in nearly any environment,” wrote Morningstar analyst Stephen Ellis.
“It can aggregate supply of every type of hydrocarbon from multiple sources in major producing basins and deliver it to multiple end markets (refiners, petrochemicals, exports).”
Further, “Enterprise’s robust marketing operations let it clip transaction-fee-like earnings during volatile oil and gas markets,” Ellis said.
The author of this story owns shares of Medtronic and Enterprise Products Partners
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