Dividend aristocrats are stocks that have been increasing their dividend payout every year for at least 25 years. It is no easy feat to be classified as one. These are stocks ideal for passive streams of income. The dividend-paying companies have weathered tough economic cycles, and their business models have stood the test of time (so far).
These entities generally enjoy a wide economic moat, making them top bets for the long-term investor. Below are three Dividend Aristocrats that should be on the top of your shopping list for 2022.
This company is most known for its cleaning products: bleach, disinfectant swipes, multiple types of cleaning sprays etc. Its portfolio of products helped Clorox’s share price to zoom in 2020 before tempering since then.
However, Clorox (NYSE: CLX) is more than just a cleaning company. It has food products (Hidden Valley), minerals and supplements (RenewLife, Natural Vitality,etc), cat litter (Fresh Step, Scoop Away, etc), bags and wraps (Glad), grilling products (Kingsford), personal care (Burt’s Bees), and a whole lot of other segments.
People don’t realize it but they use Clorox products in almost every aspect of their lives. This company isn’t going anywhere. It has recorded 45 years of dividend growth, and its current yield stands at 2.54%. The company’s results have beaten expectations in three out of the last four quarters.
Clorox launched the IGNITE initiative in 2019 to harness new trends in the world, one of which is sustainability. Its lad range of trash bags are made from 50% recycled plastic. Clorox is a brand that consumers trust and this will hold the company in good stead.
International Business Machines Corporation (NYSE: IBM) is one of the well-known names around the world. It is the newest entrant into the dividend aristocrats list in 2021 after completing 25 years of continuous dividend increases. Its current yield is a very healthy 4.87%. IBM sells hardware, middleware and software. It also provides IT consulting services, cloud, and enterprise systems and software.
It has a presence in over 175 countries and its customers include small businesses as well as conglomerates. IBM’s cloud and cognitive software business is fast becoming one of its biggest revenue drives and is already its largest profit center.
Its global business services segment, that includes its consulting arm, saw its Q3 2021 revenues go up 17% year-on-year. It has said that in 2022 it expects cash flow to grow in the high-single digits through 2024 and will grow to a cumulative $35 billion.
This might be a good time to enter IBM stock. It has spent the last six months consolidating between $115-$135 levels, and it looks ripe for a breakout now.
NextEra Energy (NYSE: NEE) is another stock that entered the dividend aristocrat list recently. The company consistently pops on ‘Energy stocks to buy and hold for the next decade’ kind of articles. And for good reason too.
The company is the largest utility player in the US and is known for its clean energy push. It is the largest generator of solar and wind energy in the world. It is consistently placed in the top percentile when it comes to ESG lists.
The last five years have seen the stock deliver over 154% returns to its shareholders. The company’s services are evergreen, and it is very unlikely that it will massive negative impact in the future. This is one stock investors tend to rely on during volatile markets.
NEE stock closed January 14 at $83.2 and analysts have a target of $95.3 on the stock which indicates a potential upside of over 14.5%. Its current yield is 1.85% which makes this stock a good buy.