Updated on March 8th, 2025 by Felix Martinez
The Dividend Aristocrats are a group of 69 companies in the S&P 500 Index that have increased their dividends for 25+ consecutive years.
Within the Dividend Aristocrats are various types of stocks with differing yields. Some of the Dividend Aristocrats have higher yields, but these high-yielders tend to grow their dividends at a lower rate each year.
At the same time, there are Dividend Aristocrats with low yields. While these may look unappealing on the surface, they often provide higher dividend growth levels from year to year. An example is Brown-Forman (BF.B), a Dividend Aristocrat that has increased its dividend for 41 consecutive years.
There are currently 69 Dividend Aristocrats, including Brown-Forman. You can download an Excel spreadsheet of all 69 Dividend Aristocrats (with metrics like dividend yields and price-to-earnings ratios) by clicking the link below:
Disclaimer: Sure Dividend is not affiliated with S&P Global in any way. S&P Global owns and maintains The Dividend Aristocrats Index. The information in this article and downloadable spreadsheet is based on Sure Dividend’s own review, summary, and analysis of the S&P 500 Dividend Aristocrats ETF (NOBL) and other sources, and is meant to help individual investors better understand this ETF and the index upon which it is based. None of the information in this article or spreadsheet is official data from S&P Global. Consult S&P Global for official information.
Brown-Forman has paid a dividend for 80 years. Thanks to its defensive business model, the company typically provides high dividend increases each year, even during recessions.
This article will discuss Brown-Forman’s growth prospects, valuation, and outlook.
Business Overview
Jack Daniel’s Tennessee Whiskey got its start all the way back in 1865 when Jack Daniel purchased Cave Spring Hollow. The following year, he registered the Jack Daniel Distillery, which is today America’s oldest registered distillery.
Brown-Forman has a large product portfolio focused on whiskey, vodka, and tequila. Its most famous brand is its flagship, Jack Daniel’s whiskey. Other popular brands include Herradura and El Jimador tequila and Finlandia vodka.
Brown-Forman reported revenues of $1.1 billion for its third quarter (fiscal 2025) earnings results. The company’s third quarter earnings saw a 1% decline in Q2 net sales to $1.1 billion, though organic sales grew 3%. Operating income rose 1% to $341 million, and EPS increased 9% to $0.55. For the first half of fiscal 2025, net sales dropped 5% to $2 billion, operating income fell 7% to $622 million, and EPS declined 3% to $0.96. CEO Lawson Whiting expects growth in the second half of the year despite economic challenges.
Sales declines were driven by the divestitures of Finlandia and Sonoma-Cutrer, along with lower volumes across key markets. Whiskey sales remained stable due to Woodford Reserve and Old Forester, but Tequila and ready-to-drink products saw declines. U.S. net sales fell 7% due to weaker Jack Daniel’s and Korbel sales, while international and emerging markets showed mixed performance.
Gross profit declined 8% due to high inventory and cost fluctuations, but lower expenses helped offset losses. Brown-Forman increased its dividend for the 41st consecutive year. The company expects 2%-4% organic growth in net sales and operating income but remains cautious about economic and geopolitical risks.
Source: Investor Presentation
Growth Prospects
Brown-Forman has a strong growth track record; the company even increased its earnings-per-share during the last financial crisis, as demand for alcohol is not especially cyclical. Historical earnings-per-share were driven by a combination of several factors, including revenue growth, rising margins, and the impact of a declining share count.
Because Brown-Forman owns strong brands and is active in the super and ultra-premium alcoholic beverages markets, which see consistent market growth, Brown-Forman should be able to keep its revenue growth going forward.
This has been an important growth factor for Brown-Forman in the past. Brown-Forman’s Jack Daniels brand and its American super-premium whiskeys continue to grow around the globe.
Higher overall sales allow for margin increases due to better economies of scale, which makes the company more efficient overall, and positively impacts its net earnings growth rate.
In addition, Brown-Forman has aggressively repurchased shares in the past decade, which adds some additional growth to its bottom line. Going forward, there is plenty of growth potential left as the company further expands its product line inside and outside its flagship Jack Daniels brand.
Furthermore, the company will purchase growth through acquisitions, for example, its recent purchase of the Diplomático Rum brand. This purchase launched Brown-Forman into the growing super-premium+ rum category. Diplomático Rum is a super-premium rum from Venezuela and is distributed in over 100 countries.
Source: Investor Presentation
We are forecasting 6% annual earnings-per-share growth over the next five years.
Competitive Advantages & Recession Performance
Brown-Forman has many competitive advantages. Its famous brands yield significant pricing power. Because of its global scale, it has a highly profitable business with low manufacturing and distribution costs. These qualities help Brown-Forman generate consistently high returns on invested capital.
Brown-Forman is also very resistant to recessions. This is typical among alcohol stocks, as their products tend to be consumed in greater volume when economic times are tough. One could argue that alcohol manufacturers perform well during recessions.
Brown-Forman’s earnings-per-share through the Great Recession are shown below:
- 2007 earnings-per-share of $0.76
- 2008 earnings-per-share of $0.77 (1.3% increase)
- 2009 earnings-per-share of $0.82 (6.5% increase)
- 2010 earnings-per-share of $0.95 (15.9% increase)
As you can see, the company grew its earnings per share every year through the Great Recession. This rare accomplishment demonstrates the company’s defensive business model.
Spirits manufacturers such as Brown-Forman are among the most recession-resistant businesses.
Valuation & Expected Returns
Based on our estimate for 2025 earnings-per-share of $1.80 and a current share price near $36, Brown-Forman shares are currently trading at a P/E ratio 20.
This is a fair multiple, even considering the strength of Brown-Forman’s business. We estimate a fair value P/E ratio of 22.
If shares were to increase to 22 times earnings, this implies the potential for a 1.5% valuation tailwind over the next five years. On this basis, the valuation appears fair.
A strong earnings growth rate of 6% and 2.5% dividend yield will help boost shareholder returns. Overall, we estimate annual returns of 10% over the next five years.
Final Thoughts
Brown-Forman has a dominant position in its core product categories. Its flagship Jack Daniel’s brand should continue to lead the whiskey industry, with high growth from its smaller whiskey brands and tequilas. Emerging markets are also an appealing growth catalyst, and of course, the dividend growth streak is enviable.
Brown-Forman is a good example of a great business trading at an exceptionally fair valuation. The company has a solid dividend and very strong business, the shares look particularly compelling for purchase right now.
Related: My Top 10 Buy & Hold Forever Stocks.
Additionally, the following Sure Dividend databases contain the most reliable dividend growers in our investment universe:
- The Dividend Contenders List: 10-24 consecutive years of dividend increases.
- The Dividend Challengers List: 5-9 consecutive years of dividend increases.
- The Dividend Champions: Dividend stocks with 25+ years of dividend increases, including those that may not qualify as Dividend Aristocrats.
- The Dividend Achievers: dividend stocks with 10+ years of consecutive dividend increases.
- The Dividend Kings: considered to be the ultimate dividend growth stocks, the Dividend Kings list is comprised of stocks with 50+ years of consecutive dividend increases
If you’re looking for stocks with unique dividend characteristics, consider the following Sure Dividend databases:
- The Complete List of Monthly Dividend Stocks: stocks that pay dividends each month, for 12 payments over the year.
- The Blue Chip Stocks List: this database contains stocks that qualify as either Dividend Achievers, Dividend Aristocrats, or Dividend Kings.
The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them monthly: