雅虎香港財經 3 Strong-Buy Dividend Aristocrats Worth Holding Forever
Some may think holding on to a stock forever is a bad idea, but your mind may change if you look at Dividend Aristocrats. These companies belong to the S&P 500 and have consistently increased their dividends in the past 25 years.
Companies on this list have proven their ability to weather different economic conditions and emerge victorious while giving back to investors.
So, today, I’ll look at three Dividend Aristocrats that deserve a spot in your long-term portfolio. To come up with this list, I used the following criteria:
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A strong buy rating from analysts,
At least 10% full-year earnings growth, and
Dividend payout ratio below 50%.
Strong buy ratings and full-year earnings growth are self-explanatory, so I want to focus on why I included dividend payouts. The dividend payout ratio indicates that the company can pay increasing dividends. In this case, lower is always better.
PPG Industries (PPG)
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A leader in industrial coatings, finishes, caustic soda, and chlorine, PPG Industries (NYSE:PPG) manufactures and distributes various paints and specialty materials. The company mainly operates in two segments:
Performance coatings: decorative and protective coatings, sealants, and adhesives.
Industrial coatings: coatings fished with pretreatment products, low-friction coatings, and special materials.
The company is constantly expanding its product portfolio to support the growing needs of its customers. It recently unveiled the PPG NEXEON 810, an ultra-low-friction, premium copper-free antifouling coating emphasizing vessel performance, emissions reduction, and sustainability. In addition, PPG is set to build its new manufacturing facility in Tennessee, supporting the growing demand for its products.
PPG Industries ended 2023 in great shape. Net sales increased by a record 3% YOY, while net income grew by 24%. PPG stock currently offers a forward dividend rate of $2.60, translating to a 2.02% yield.
The cherry on top is that PPG also has a low 43.34% payout ratio, giving it a lot of headroom for dividend increases. Additionally, analysts give it a strong buy rating, making it one of the best Dividend Aristocrats to buy and hold forever.
The Sherwin-Williams Company (SHW)
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Considered the global leader in paints and coatings, Sherwin-Williams Company (NYSE:SHW) manufactures and sells paints, coatings, and other related products for retail, industrial, commercial, and professional clients globally. The company operates in three main segments:
Consumer Brands Group: manufactures and distributes private-label paints, varnishes, and related products to retailers and distributors.
Paint Stores Group: provides servicing needs for industrial contractors and unit owners.
Performance Coatings Group: develops and sells industrial coatings for industrial applications.
SHW stock offers an annual dividend of $2.86, translating to a relatively low 0.98% yield. However, the company has a phenomenal record of 46 consecutive years of dividend increases and a 26.97% payout ratio.
FY’23 had a lot of good news for Sherwin-William investors. Sales increased by 4.1% YOY, while gross margins improved from 42.1% in 2022 to 46.7%. Furthermore, diluted EPS grew by an impressive 19.8%, highlighting its strong position in the market.
Management is confident that this streak will continue. 2024 guidance pegs net sales increase up to mid-single digits, while diluted EPS is expected to fall between $10.05 and $10.55. Analysts give SHW stock a strong buy rating.
Cintas Corporation (CTAS)
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Recently named one of the most admired companies in 2024 by Fortune, Cintas Corporation (NASDAQ:CTAS) is North America’s largest uniform rental company. The company caters to businesses of shapes and sizes and operates in two segments:
Uniform Rental and Facility Services: offers rental and servicing for uniforms and garments.
First Aid and Safety Services segment: offers safety and first aid products.
As a Dividend Aristocrat, Cintas has consecutively increased its dividends for the last 41 years. Its continued leadership in its sector and consistent dividend growth have earned a strong buy recommendation from analysts.
Cintas Corporation ended FY’23 with strong growth metrics. Revenue increased 12.2% YOY and reached $8.82 billion. Meanwhile, diluted EPS grew 11.5% to $12.99. Revenue in the company’s most recent quarter (Q3’24) was up 9.9%, and all other metrics saw impressive double-digit growth.
Further, Cintas has increased its full fiscal year revenue guidance to $9.57 billion – $9.60 billion and EPS guidance to $14.80 – $15.00. The company has an annual dividend yield of 0.79% at a dividend payout ratio of 35.89%. While the yield may be small compared to other dividend stocks, investors are likely to be well compensated by its growth over the long term.
On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.
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