Five stocks to by as Dividend Aristocrats for income and growth feature well-known names.
To qualify as a Dividend Aristocrat, a stock must be part of the S&P 500, pay dividends consistently each year and raise the payouts at least in each of the past 25 years. A total of 66 stocks qualified as Dividend Aristocrats in 2024.
The five stocks to buy as Dividend Aristocrats feature a giant consumer retailer, a provider of home-related products and services, a fast food restaurant chain, a consumer products company and an oil and gasoline provider. Walmart (NYSE: WMT) became a Dividend King, indicating it has raised its payout for at least the last 50 years.
Five Stocks to Buy as Dividend Aristocrats for Income: Carlson’s Counsel
It’s especially important for retirees to have their income increase over time to preserve their purchasing power as inflation increases the cost of goods and services, said retired pension chairman Bob Carlson, who heads the Retirement Watch investment newsletter. Dividend Aristocrats provide that purchasing power protection because they have long-term records of increasing their dividends each year, Carlson continued.
“The dividend increases might not be by a large amount each year or keep up with inflation each year,” Carlson said. “But the steady, compounding effect of the dividend increases over time.”
A key benefit is that the financial security of retirees is enhanced more with dividends than with bonds or other income-paying vehicles that have fixed interest rates, Carlson concluded.
Bob Carlson, head of Retirement Watch, gives an interview to Paul Dykewicz.
Five Stocks to Buy as Dividend Aristocrats for Income: Walmart (WMT)
Mark Skousen, PhD, who heads the Forecasts & Strategies investment newsletter, recommends Walmart as one of the Flying Five positions in his investment newsletter. The stock has jumped 9.84% since Skousen recommended it to his newsletter subscribers on July 22.
Ben Franklin scion Mark Skousen, who heads Five Star Trader and Forecasts & Strategies, talks to Paul Dykewicz.
Walmart, the big Bentonville, Arkansas-based retailer, posted its best month in 10 years while discount rivals slumped, Skousen wrote to his subscribers. The company posted stronger-than-expected earnings by luring more bargain hunters and price-conscience shoppers.
The retailer also has seen a dramatic increase in its e-commerce business. Meanwhile, dollar stores have struggled and retailer Big Lots Inc. tanked after Bloomberg reported it’s contemplating a potential bankruptcy filing, Skousen reported.
Chart courtesy of www.stockcharts.com
Another fan of Walmart is Jim Woods, who leads the Successful Investing newsletter. Woods, who also teams up with Skousen to co-head the Fast Money Alert advisory service that includes options, lists Walmart in his newsletter’s Income Multipliers Portfolio.
Jim Woods, a former U.S. Army paratrooper, co-heads Successful Investing and Fast Money Alert.
Woods also has four other Dividend Aristocrats that are highlighted below as positions to own for the years to come.
Five Stocks to Buy as Dividend Aristocrats for Income: Lowe’s (LOW)
One of those Dividend Aristocrats recommended by Woods in Successful Investing is Lowe’s (NYSE: LOW). Woods, who likes to do home improvement projects, finds much to like about Lowe’s and its rising dividend policy.
Chart courtesy of www.stockcharts.com
Five Stocks to Buy as Dividend Aristocrats for Income: McDonald’s (MCD)
McDonald’s (NYSE: MCD) is another one of the Dividend Aristocrats that Woods recommends. The company’s share price climbed close to $20 in the past month.
McDonald’s offers a blend of breakfast, lunch and dinner items, while constantly innovating to keep its menu relevant. The company, founded in 1940, has grown to $24 billion in revenue – most of which comes from franchise and licensing fees.
Chart courtesy of www.stockcharts.com
Five Stocks to Buy as Dividend Aristocrats for Income: Procter & Gamble
Procter & Gamble is another Dividend Aristocrat favored by Woods. The consumer products company headquartered in Cincinnati, Ohio, has been on the ascent in the past week and further gains appear to be ahead for the consumer staples provider.
Chart courtesy of www.stockcharts.com
For investors looking to compound their wealth, picking high-quality dividend growth stocks to buy and hold has been shown to be a successful way to build wealth. There are many ways to pick dividend growth stocks, but choosing Dividend Aristocrats that have at least 25 consecutive years of increasing their payouts is a proven success formula.
Five Stocks to Buy as Dividend Aristocrats for Income: Exxon Mobil (XOM)
The fifth Dividend Aristocrat to buy is Houston-based Exxon Mobil (NYSE: XOM). The company’s share price has fluctuated in an up-and-down pattern during much of the past year but should benefit from interest rate cuts that are expected to stimulate economic activity.
Chart courtesy of www.stockcharts.com
Rising Payouts Are Compelling
The Dividend Aristocrats have stood the test of time in retaining competitive advantages, growing profits and resisting the worst effects of recessions. Without all these pluses, the longevity required to be a Dividend Aristocrat would be tough to achieve.
Investors should consider buying the five stocks highlighted among the 66 stocks Dividend Aristocrats that earned that distinction this year. Dividend Aristocrats offer a great place to start searching for income-oriented stocks that offer rising payouts.
Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is the editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. Follow Paul on Twitter @PaulDykewicz.
