7 Dividend Aristocrats With Ever-Rising Payouts (2024)

To build wealth over time, investors should learn the crucial role dividend stocks play in a well-rounded portfolio. These stocks provide stability when markets get rocky, while putting cash directly into your brokerage account. This is money that can be used to either reinvest or supplement your income. Thus, when it comes to dividends, I focus on the creme de la creme: “Dividend Aristocrats.” These stocks have increased their payouts yearly for at least 25 consecutive years. Talk about reliability!

By reinvesting those rising dividends and letting compound interest work its magic, you’ll be amazed at how a relatively small up-front investment can snowball over decades. For instance, if you’d invested $1,000 in McDonald’s (NYSE:MCD) stock 25 years ago, reinvesting dividends along the way would have grown this position to more than $13,463.44 today! That’s not too shabby at all.

With that said, let’s take a look at seven dividend aristocrats I think investors should be paying more attention to right now.

Coca-Cola (KO)

As one of the most recognizable brands in the world, Coca-Cola (NYSE:KO) needs no introduction. This beverage giant’s products are sold in over 200 countries and territories. Even amid recent bearishness stemming from boycotts and new weight loss products that could dent soda consumption, Coca-Cola’s sheer scale insulates it from material damage, in my view.

Coca-Cola boasts unrivaled staying power, having weathered countless economic cycles and consumer trend shifts. Come recession or high inflation, I believe folks will keep reaching for those iconic red cans and bottles. Soft drinks remain an affordable indulgence in good times and bad.

Valuation-wise, Coca-Cola trades at a premium. Its stock is valued at roughly 22-times earnings and nearly 6-times sales. However, the company’s exceptional profitability and dividend track record warrant these lush multiples. With net and gross margins of 24% and 60%, respectively, Coca-Cola has ample room to continue rewarding shareholders.

And despite being a 132+ year-old company, Coca-Cola continues growing at a brisk clip, having just logged 8% annual revenue growth and a 9% profit jump in Q3 2022. Its forward dividend yield is also healthy at more than 3%, backed by 62 straight years of payout hikes.

In short, this Dividend Aristocrat offers stability, steady dividend growth, and promising emerging market reach. That’s a compelling mix for risk-averse income investors.

Emerson Electric (EMR)

While largely unknown to everyday consumers, Emerson Electric’s (NYSE:EMR) products power major swaths of the industrial economy. Emerson technology enables automation across infrastructure, manufacturing, and even healthcare, from control valves to switches to drives. So, in many ways, our modern way of life hinges on this 134+ year-old stalwart.

With global trends like on-shoring and automation gaining momentum, I foresee sturdy growth ahead for Emerson. As companies pull production out of China amid geopolitical tensions, North American and European plants will likely lean on Emerson’s measurement instruments and factory automation solutions.

Already highly-profitable, I expect Emerson’s margins to balloon further as industrial automation accelerates. Facing widespread labor shortages, manufacturers have embraced cost-saving technologies like AI and advanced robotics. By automating repetitive tasks, companies are increasingly able to stretch their limited workforces. Indeed, Emerson stands well-poised to capitalize on this seismic shift.

Topping it off, Emerson has provided income investors with 67 years of consecutive dividend hikes, making this company a true Dividend Aristocrat. Its shares currently yield 2.24%, and are one of the best ways to gain exposure to dividend growth right now, in my view.

Sonoco Products (SON)

Though lesser-known than the previous two companies, Sonoco Products (NYSE:SON) merits equal attention. As a leading packaging supplier, Sonoco provides the materials and containers that hold everything from food to medical devices. Its customers range from producers to retailers and wholesalers across diverse sectors.

In today’s tumultuous economic environment, I believe Sonoco offers a compelling risk-reward profile. The company’s share price has retreated nearly 17% from 2021 highs amid supply chain snarls and inflationary pressures. However, with the worst likely behind us, Sonoco looks poised to bounce back in 2024 alongside improving business conditions.

Currently, SON stock appears attractively-priced given the company’s essential niche, trading at just 11-times forward earnings compared to its 5-year average, which is closer to 16-times. Its 3.6% dividend yield also hits the sweet spot between stability and income, buoyed by 42 straight years of payout growth.

Realty Income (O)

Realty Income (NYSE:O) offers formidable staying power. However, its stock trades at a discount, likely due to fears of a housing collapse as interest rates remain elevated.

Now, while predictions abound regarding the outlook for real estate, I believe Realty Income’s scale and financial muscle equip the company to emerge well regardless of what materializes. Once the Fed pivots to cuts, I expect housing demand to rebound. Until then, this dividend stalwart will pay investors on a monthly basis to be patient.

With ample liquidity and a weighted average remaining lease term of 9.7 years across its tenant base, Realty Income has shown the ability to outperform through recessions and recoveries alike. The stock’s 5.5% dividend yield looks relatively secure, and is buoyed by 31 consecutive years of payout hikes. That’s a testament to the prudence of this company’s management team.

As economic activity normalizes in 2024, Realty Income deserves a spot among investors’ dividend holdings.

Procter & Gamble (PG)

This ubiquitous consumer goods titan requires no introduction. Indeed, Procter & Gamble (NYSE:PG) holds some of the world’s most well-known brands like Tide, Pampers, Gillette, Pantene, Downy, Crest, and the list goes on. These leading brands enjoy fierce customer loyalty and stand recession-resistant. Yet, PG stock has retreated almost 10% from its peak, presenting longer-term investors a chance to buy this defensive Dividend Aristocrat at an attractive price.

Trading at 23-times forward earnings, shares look reasonably valued at current levels given P&G’s steady mid-single-digit growth trajectory. Yes, periods of high inflation will strain the company’s margins over the near-term, as rising input costs eat into the company’s profits. However, price hikes combined with productivity gains should restore profitability as the economic backdrop improves.

When looking for reliable rising income, P&G’s 68-year dividend growth streak offers peace of mind. With a 2.5% forward yield, PG stock provides an inflation hedge to help offset near-term turbulence.

PepsiCo (PEP)

I view PepsiCo’s (NASDAQ:PEP) recent pullback as a gift for investors who are yet to initiate a position. Down 11% off its peak, PEP stock currently trades at 20-times forward earnings.

To me, heightened uncertainty has driven an unwarranted excessive discount for this beverage giant. Yes, periods of economic weakness will pressure consumer spending on discretionary snacks and beverages. However, PepsiCo boasts a diversified product suite focused on value, which is crucial in inflationary times.

PepsiCo’s top-line growth still trends at 6.8% per year due to volume gains across categories. Accordingly, in my view, this is a company with a sustainable growth narrative. As macro conditions incrementally improve in 2024, I expect revenues and earnings growth to accelerate.

For over five decades spanning economic ups and downs, PepsiCo has delivered for income investors with 52 consecutive years of dividend increases. Its 3% forward yield is supported by balance sheet strength and continued revenue growth, which I anticipate will continue over the long-term.

Tennant Company (TNC)

Rounding out this group of Dividend Aristocrats is the smaller-cap Tennant Company (NYSE:TNC), a leader in commercial cleaning equipment and solutions. The stock has been riding high on plenty of momentum, recently reaching new highs.

Tennant definitely warrants consideration at today’s levels. Its automated cleaning technologies support facilities managing tight budgets and staffing – crucial edge cases today.

While Tennant’s 1.2% dividend yield may feel skimpy at first glance, don’t underestimate the power of long-term compounding. Its 52 straight years of dividend growth signals a shareholder-friendly approach geared toward consistent dividend growth. For those thinking long-term, those dividends can really add up.

On the date of publication, Omor Ibne Ehsan did not hold (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.comPublishing Guidelines.

Omor Ibne Ehsan is a writer at InvestorPlace. He is a self-taught investor with a focus on growth and cyclical stocks that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as cryptocurrencies and penny stocks. You can follow him on LinkedIn.