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10 Safest Dividend Aristocrats For 2024


Updated on October 30th, 2024 by Bob Ciura

The Dividend Aristocrats are the ‘best of the best’ dividend growth stocks. The Dividend Aristocrats have a long history of outperforming the market.

Dividend Aristocrats are elite companies that satisfy the following:

You can download an Excel spreadsheet with the full list of all 66 Dividend Aristocrats (with additional financial metrics such as price-to-earnings ratios and dividend yields) by clicking the link below:

 

Click here to instantly download your free spreadsheet of all 66 Dividend Aristocrats now, along with important investing metrics.

All Dividend Aristocrats are high-quality businesses based on their long dividend histories. A company cannot pay rising dividends for 25+ years without having a strong and durable competitive advantage.

But not all Dividend Aristocrats make equally good investments today. Some Dividend Aristocrats are better than others, based on the sustainability of their dividends.

That’s why, in this article, we have analyzed the 10 safest Dividend Aristocrats from our Sure Analysis Research Database with the safest dividends based on our Dividend Risk Score rating system.

The stocks below are all Dividend Aristocrats with Dividend Risk Scores of ‘A’, the top rating, and with the lowest payout ratios.

Table of Contents

Why The Payout Ratio Matters

The dividend payout ratio is simply a company’s annual per-share dividend, divided by the company’s annual earnings-per-share. It is a measure of the level of earnings a company distributes to its shareholders via dividends.

The payout ratio is a valuable investing metric because it differentiates companies with low payout ratios that have lots of room for dividend growth, from companies with high payout ratios whose dividends may not be sustainable.

Indeed, research has shown that companies with higher dividend growth have outperformed companies with lower dividend growth or no dividend growth.

In research performed by Ned Davis and Hartford Funds, it was found that dividend growers and initiators delivered total returns of 10.19% per year from 1973 through 2023, better than the equal-weighted S&P 500’s performance of 7.72% per year.

Interestingly, the dividend growers and initiators analyzed in this study generated outperformance with less volatility – a rarity and a contradiction to what modern academic financial theory tells us.

A summary of this research can be found below.

Source: Hartford Funds – The Power Of Dividends

Outperformance of 2.47% annually might not seem like a game-changer, but it certainly is thanks to the wonder that is compound interest.

Using data from the same piece of research, investors who chose to invest exclusively in dividend growers and initiators were capable of turning $100 into $14,118. During the same time period, the S&P 500 index turned $100 into $4,439.

Source: Hartford Funds – The Power Of Dividends

Stocks that did not pay dividends could not match the performance of all types of dividend payers, turning $100 into $843 from 1973-2022. Dividend cutters and eliminators fared even worse, turning $100 into just $73–meaning these stocks actually lost money.

As a result, investors looking for stocks with better dividend growth (and long-term return potential) could consider the Dividend Aristocrats with the lowest payout ratios.

Safest Dividend Aristocrats #10: Dover Corporation (DOV)

Dover Corporation is a diversified global industrial manufacturer with annual revenues of nearly $9 billion. Dover is composed of five reporting segments: Engineered Systems, Clean Energy & Fueling, Pumps & Process Solutions, Imaging & Identification, and Climate & Sustainability Technologies.

Slightly more than half of revenues come from the U.S., with the remainder coming from international markets.

Source: Investor Presentation

Dover Corporation reported its financial results for Q3 2024, highlighting steady revenue growth despite economic challenges.

Revenue rose by 1% to $2.0 billion compared to the same period in 2023, while GAAP earnings from continuing operations increased by 19% to $313 million, with diluted earnings per share (EPS) from continuing operations up 22% to $2.26.

Click here to download our most recent Sure Analysis report on DOV (preview of page 1 of 3 shown below):

Safest Dividend Aristocrats #9: Sherwin-Williams (SHW)

Sherwin-Williams, founded in 1866, is North America’s largest manufacturer of paints and coatings.

The company distributes its products through wholesalers as well as retail stores (including a chain of more than 4,900 company-operated stores and facilities) to 120 countries under the Sherwin-Williams name.

The company also manufactures Dutch Boy, Pratt & Lambert, Minwax, Thompson’s Waterseal, Krylon, Valspar (acquired in 2017), and other brands.

On July 23rd, 2024, Sherwin-Williams released financial results for the second quarter of fiscal 2024. Sales edged up only 0.5% over the prior year’s quarter, primarily due to poor demand in Consumer Brands Group.

However, gross margin expanded from 46.0% to 48.8% thanks to price hikes and adjusted earnings-per-share grew 12.5%, from $3.29 to $3.70.

Sherwin-Williams raised its guidance for 2024. It expects sales to be up a low-single digit percentage and raised its guidance for earnings-per-share from $10.85-$11.35 to $11.10-$11.40.

Click here to download our most recent Sure Analysis report on SHW (preview of page 1 of 3 shown below):


Safest Dividend Aristocrats #8: S&P Global (SPGI)

S&P Global is a worldwide provider of financial services and business information and revenue of over $13 billion. Through its various segments, it provides credit ratings, benchmarks and indices, analytics, and other data to commodity market participants, capital markets, and automotive markets.

S&P Global has paid dividends continuously since 1937 and has increased its payout for 51 consecutive years.

S&P Global posted second quarter earnings on July 30th, 2024, and results were much better than expected on both the top and bottom lines. Adjusted earnings-per-share came to $4.04, which was 39 cents better than estimates.

Earnings were up from $3.12 per share in last year’s Q2. Revenue soared 14.5% year-over-year to $3.55 billion, $140 million better than expected. Management also boosted guidance, and we’ve raised our estimate accordingly.

Expenses were $2.11 billion, the same as Q1, and up fractionally from last year’s Q2. Given revenue rose sharply, operating profit soared from $1.44 billion to $1.81 billion.

Revenue growth was strongest in the Ratings business, which saw revenue rise from $851 million to $1.14 billion year over-year. The Market Intelligence business is still the largest segment, but only just, as revenue rose modestly year over-year.

Click here to download our most recent Sure Analysis report on SPGI: (preview of page 1 of 3 shown below):

Safest Dividend Aristocrats #7: Pentair plc (PNR)

Pentair is a pure-play water solutions company that operates in 3 segments: Aquatic Systems, Filtration Solutions, and Flow Technologies. Pentair was founded in 1966.

Pentair has increased its dividend for more than four decades in a row, when adjusted for spin-offs. Pentair is one of the top water stocks.

Pentair reported its third quarter earnings results on October 22. The company was able to generate revenues of $990 million during the quarter, which was 2% less than the company’s revenues during the previous year’s quarter, a result that beat estimates slightly.

Core sales, which exclude the impact of currency rate movements, acquisitions, and dispossessions, were down 1% year over year, which was worse than the core revenue growth rate during the previous quarter when core sales had improved by 1%.

Pentair recorded earnings-per-share of $1.09 for the third quarter, which was up 16% year-over-year. Pentair’s earnings-per-share beat the analyst consensus by $0.02.

Click here to download our most recent Sure Analysis report on Pentair (preview of page 1 of 3 shown below):

Safest Dividend Aristocrats #6: W.W. Grainger (GWW)

W.W. Grainger, headquartered in Lake Forest, IL, is one of the world’s largest business-to-business distributors of maintenance, repair, and operations (“MRO”) supplies.

Grainger has more than 4.5 million active customers, with more than 30 million products offered globally.

Source: Investor Presentation

On July 31st, 2024, W.W. Grainger reported its Q2 results for the period ending June 30th, 2024. Revenues came in at $4.3 billion, up 3.1% on a reported basis and up 5.1% on a daily, constant currency basis (adjusted) compared to last year.

Results were driven by solid performance across the board. The High-Touch Solutions segment achieved sales growth of 3.1% due to solid volume growth in all geographies. In the Endless Assortment segment, sales were up 3.3%.

Growth was again driven by B2B customers across the segment as well as enterprise customer growth, partially offset by declining sales to non-core, consumer-like customers.

Click here to download our most recent Sure Analysis report on GWW (preview of page 1 of 3 shown below):

 

Safest Dividend Aristocrats #5: Chubb Limited (CB)

Chubb Ltd is a global provider of insurance and reinsurance services headquartered in Zurich, Switzerland. The company provides insurance services including property & casualty insurance, accident & health insurance, life insurance, and reinsurance.

For its fiscal second quarter, Chubb Ltd reported net earned premiums of $12.3 billion, which was 12% year-over-year growth. Net written premiums were up 12% year-over-year in the company’s Global P&C business unit, while other business units such as Life saw solid growth as well.

CB generated net investment income of $1.47 billion during the quarter, or $1.56 billion after adjustments, which was up by a nice 26% compared to the previous year’s period.

Click here to download our most recent Sure Analysis report on Chubb (preview of page 1 of 3 shown below):

Safest Dividend Aristocrats #4: Roper Technologies (ROP)

Roper Technologies is a specialized industrial company that manufactures products such as medical and scientific imaging equipment, pumps, and material analysis equipment.

Roper Technologies also develops software solutions for the healthcare, transportation, food, energy, and water industries. The company was founded in 1981, generates  around $5.4 billion in annual revenues, and is based in Sarasota, Florida.

On July 24th, 2024, Roper posted its Q2 results for the period ending June 30th, 2024. Quarterly revenues and adjusted EPS were $1.72 billion and $4.48, indicating a year-over-year increase of 12% and 9%, respectively.

The company’s momentum during the quarter remained strong, with organic growth coming in at 4% and acquisitions further boosting top-line growth. Organic growth was once again driven by broad-based strength across its portfolio of niche-leading businesses.

Backed by Roper’s growth momentum, balance sheet strength, and a large pipeline of quality acquisition opportunities, management continues to believe Roper is well positioned for continued double-digit cash flow growth.

Click here to download our most recent Sure Analysis report on ROP (preview of page 1 of 3 shown below):

Safest Dividend Aristocrats #3: Brown & Brown (BRO)

Brown & Brown Inc. is a leading insurance brokerage firm that provides risk management solutions to both individuals and businesses, with a focus on property & casualty insurance. Brown & Brown has a notably high level of insider ownership.

Brown & Brown posted second quarter earnings on July 23rd, 2024, and results were better than expected on both the top and bottom lines. Adjusted earnings-per-share came to 93 cents, which was a nickel ahead of estimates.

Source: Investor Presentation

Revenue was up 12.4% year-over-year to $1.18 billion, which was also $40 million ahead of expectations.

Brown & Brown’s competitive advantage comes from its willingness to execute small and frequent acquisitions. This growth-by-acquisition strategy gives the company an enduring opportunity to continue growing its business for the foreseeable future.

Click here to download our most recent Sure Analysis report on BRO (preview of page 1 of 3 shown below):

Safest Dividend Aristocrats #2: Nucor Corp. (NUE)

Nucor is the largest publicly traded US-based steel corporation. The steel industry is notoriously cyclical, which makes Nucor’s streak of 50 consecutive years of dividend increases even more remarkable.

Nucor Corporation reported its financial results for the second quarter of 2024, demonstrating strong performance amidst challenging market conditions.

The company posted net earnings of $645.2 million, or $2.68 per diluted share, with net sales totaling $8.08 billion. Net earnings before noncontrolling interests were $712.1 million, and EBITDA reached $1.23 billion.

Click here to download our most recent Sure Analysis report on NUE (preview of page 1 of 3 shown below):

Safest Dividend Aristocrats #1: West Pharmaceutical Services (WST)

West Pharmaceutical Services manufactures packaging and components involved in the distribution and application of pharmaceuticals. The company’s products include Zenith Crystal, a medical glass alternative, and SmartDose, an automatic medication delivery system.

West Pharmaceutical Services reported its second quarter earnings results on July 25. The company reported that its revenues totaled $702 million, which represents a revenue decline of 7% compared to the prior year’s quarter.

West Pharmaceutical Services’ revenues were lower than what the analyst community had expected, unlike during the previous quarter, when it beat the consensus estimate. Revenues were not positively impacted by currency rate changes during the period, unlike during the previous year.

West Pharmaceutical Services generated adjusted earnings-per-share of $1.52 during the second quarter, which represents a decline of 28% compared to the prior year’s quarter.

Click here to download our most recent Sure Analysis report on WST (preview of page 1 of 3 shown below):

Final Thoughts

Investors looking for quality dividend growth stocks should start their search with the Dividend Aristocrats, a select group of 67 stocks in the S&P 500 Index with at least 25 consecutive years of dividend growth.

Income investors should also consider dividend safety before investing in dividend stocks.

Fortunately, investors do not have to sacrifice quality when investing in dividend growth stocks. These 10 Dividend Aristocrats have have high-quality business models, durable competitive advantages, and safe dividend payouts that can withstand recessions.

Additional Reading

Don’t miss the resources below for more Dividend Aristocrats investing research.

And see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.

Thanks for reading this article. Please send any feedback, corrections, or questions to support@suredividend.com.



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