3 Dividend Aristocrats You Can't Afford to Ignore
Dividend investors appreciate the income they receive from their dividend-paying stocks, and the roughly four-dozen stocks that qualify as Dividend Aristocrats have demonstrated their ability to keep raising their payouts year in and year out for at least a quarter century. Yet many Dividend Aristocrat stocks don't check off all the boxes that investors would want, with some having low yields and others having little or no potential for future growth. PepsiCo (NYSE: PEP), Target (NYSE: TGT), and Emerson Electric (NYSE: EMR) stand out from the Aristocrat crowd because of their generous payouts and future prospects.
PepsiCo has satisfied the thirst that dividend investors have for consistent payout growth. The stock has boosted its quarterly dividend every year for 45 straight years, including its most recent 7% boost in May. PepsiCo shares currently sport a dividend yield of 2.8%, and even with its generous dividend policy, the soft-drink and snack giant only pays out about two-thirds of its earnings as dividends, leaving plenty of ammunition ready for strategic investment in its business.
PepsiCo has been smart in its handling of its two main divisions, which have benefited the company by providing it with diversification. A strong brand gives PepsiCo the ability to retain pricing power both for its soft drinks and its snack offerings, and that helped contribute to rising sales and profits in its most recent quarter despite headwinds from concerns about the health impacts of sugary carbonated beverages. PepsiCo CEO Indra Nooyi has been instrumental in preparing the company for the trend toward healthier food offerings, and initiatives to promote new products like enhanced water and controlled-calorie snack foods have a lot of promise. PepsiCo's dividend looks safe, and investors should be able to count on lucrative streams of income well into the future.
Source: Fool.com