Updated on September 18th, 2023 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:
Are in the S&P 500 Index
Have 25+ consecutive years of dividend increases
Meet certain minimum size & liquidity requirements
You can download an Excel spreadsheet with the full list of all 67 Dividend Aristocrats (with additional financial metrics such as price-to-earnings ratios and dividend yields) by clicking the link below:
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
Safest Dividend Aristocrats #10: Archer Daniels Midland (ADM)
Safest Dividend Aristocrats #9: Pentair plc (PNR)
Safest Dividend Aristocrats #8: Dover Corporation (DOV)
Safest Dividend Aristocrats #7: W.W. Grainger (GWW)
Safest Dividend Aristocrats #6: Chubb Limited (CB)
Safest Dividend Aristocrats #5: Brown & Brown (BRO)
Safest Dividend Aristocrats #4: Roper Technologies (ROP)
Safest Dividend Aristocrats #3: Nucor Corp. (NUE)
Safest Dividend Aristocrats #2: West Pharmaceutical Services (WST)
Safest Dividend Aristocrats #1: Albemarle Corp. (ALB)
Safest Dividend Aristocrats #10: Archer Daniels Midland (ADM)
Payout Ratio: 24.9%
Archer-Daniels-Midland is the largest publicly-traded farmland product company in the United States. Archer-Daniels-Midland’s businesses include processing cereal grains, oilseeds, and agricultural storage and transportation.
Archer-Daniels-Midland reported its second-quarter results for Fiscal Year (FY) 2023 on July 25th, 2023. The company posted net earnings of $0.9 billion, with adjusted net earnings reaching $1.0 billion. The company’s trailing four quarter average adjusted return on invested capital (ROIC) stood at an impressive 13.8%.
Source: Investor Presentation
ADM reported earnings per share (EPS) of $1.70. This figure incorporates a charge of $0.17 per share linked to impairments, restructuring, and a contingency loss provision pertaining to import duties. Adjusted for these elements, the company’s adjusted EPS was $1.89, offering a more accurate view of its operational performance during the period.
Click here to download our most recent Sure Analysis report on ADM (preview of page 1 of 3 shown below):
Safest Dividend Aristocrats #9: Pentair plc (PNR)
Payout Ratio: 23.8%
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.
Source: Investor Presentation
Pentair reported its second quarter earnings results on July 27. Revenues of $1.08 billion during increased 2%, a resultthat beat estimates easily. Core sales, which excludes the impact of currency rate movements, acquisitions, and dispossessions, were up 9% year over year. Pentair recorded earnings-per-share of $1.03 for the second quarter, which was up 1% year-over-year and beat the analyst consensus by $0.08.
Pentair updated its guidance for the current year during the earnings report. For fiscal 2023, Pentair is now forecasting earnings-per-share of around $3.70.
Click here to download our most recent Sure Analysis report on Pentair (preview of page 1 of 3 shown below):
Safest Dividend Aristocrats #8: Dover Corporation (DOV)
Payout Ratio: 22.8%
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.
On July 25th, 2023, Dover reported second quarter results. For the quarter, revenue decreased 2.8% to $2.1 billion, which was $100 million less than expected. Adjusted earnings-per-share of $2.05 compared unfavorably to $2.14 in the prior year and was $0.16 below estimates.
Click here to download our most recent Sure Analysis report on DOV (preview of page 1 of 3 shown below):
Safest Dividend Aristocrats #7: W.W. Grainger (GWW)
Payout Ratio: 20.7%
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.
On July 27th, 2023, W.W. Grainger reported its Q2 results for the period ending June 30th, 2023. Revenues came in at $4.8 billion, up 9.0% on a reported basis and up 10.1% on a daily, constant currency basis (adjusted) compared to last year.
Results were driven primarily by the High-Touch Solutions segment achieving adjusted sales growth of 9.9% due to both strong price realization and continued volume gains across all geographies.
Click here to download our most recent Sure Analysis report on GWW (preview of page 1 of 3 shown below):
Safest Dividend Aristocrats #6: Chubb Limited (CB)
Payout Ratio: 18.6%
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 premium of $11.0 billion, up 15% year-over-year. Net written premiums were up 17% yearover-year on a company-wide basis at constant currency rates. Chubb generated net investment income of $1.15 billion during the quarter.
Chubb generated earnings-per-share of $4.92 during the second quarter, which was above what the analyst community had forecasted. Chubb’s solid profitability during the quarter can be explained by a reasonable combined ratio of 85%, despite some natural disasters that impacted Chubb’s catastrophe losses.
Click here to download our most recent Sure Analysis report on Chubb (preview of page 1 of 3 shown below):
Safest Dividend Aristocrats #5: Brown & Brown (BRO)
Payout Ratio: 18.0%
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 24th, 2023, and results were ahead of expectations on both the top and bottom lines. Adjusted earnings-per-share totaled 68 cents, which was an impressive nine cents ahead of expectations.
Earnings were down from 84 cents in the first quarter, but up from 51 cents in last year’s Q2. Revenue was $1.04 billion, up 24% year-over-year, and $41 million better than estimates. That was off from $1.12 billion in Q1, but much higher than $840 million in last year’s Q2.
Click here to download our most recent Sure Analysis report on BRO (preview of page 1 of 3 shown below):
Safest Dividend Aristocrats #4: Roper Technologies (ROP)
Payout Ratio: 16.6%
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 21st, 2023, Roper reported its Q2 results for the period ending June 30th, 2023. On a continuing operations basis, quarterly revenues and adjusted EPS were $1.53 billion and $4.12, indicating a year-over-year increase of 17% and 20%, respectively. The company’s momentum during the quarter remained strong, with organic growth coming in at 9%.
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 high-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: Nucor Corp. (NUE)
Payout Ratio: 15.4%
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.
On July 24th, Nucor reported its second quarter results. It reported consolidated net earnings of $1.46 billion, or $5.81 per diluted share, for Q2 2023, compared to $1.14 billion, or $4.45 per diluted share, in Q1 2023 and $2.56 billion, or $9.67 per diluted share, in Q2 2022.
In the first six months of 2023, they reported consolidated net earnings of $2.60 billion, or $10.26 per diluted share, compared to $4.66 billion, or $17.30 per diluted share, in the first six months of 2022.
Click here to download our most recent Sure Analysis report on NUE (preview of page 1 of 3 shown below):
Safest Dividend Aristocrats #2: West Pharmaceutical Services (WST)
Payout Ratio: 9.8%
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 27. Revenues totaled $750 million, which represents a revenue decline of 2% compared to the prior year’s quarter. West Pharmaceutical Services’ revenues were in line with what the analyst community had expected, unlike during the previous quarter, when it beat estimates by $20 million.
Revenues were not meaningfully impacted by currency rate changes during the period, unlike during the last couple of quarters. West Pharmaceutical Services generated adjusted earnings-per-share of $2.11 during the second quarter, which represents a decline of 15% 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):
Safest Dividend Aristocrats #1: Albemarle Corp. (ALB)
Payout Ratio: 6.9%
Albemarle is the largest producer of lithium and second largest producer of bromine in the world. The two products account for nearly two-thirds of annual sales. Albemarle produces lithium from its salt brine deposits in the U.S. and Chile. The company has two joint ventures in Australia that also produce lithium.
Related: 2023 Lithium Stocks List
Source: Investor Presentation
In the second quarter, revenue grew 60.1% to $2.37 billion, but missed estimates by $20 million. Adjusted earnings-per-share of $7.33 compared very favorably to $3.45 in the prior year and was $2.81 above estimates.
For the quarter, revenue for Energy Storage grew 119.7% to $1.76 billion, due to higher prices and a 36% improvement in volumes from the company’s expansion in Chile and a new processing plant in China.
Click here to download our most recent Sure Analysis report on Albemarle (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 in the search for yield. These 10 Dividend Aristocrats have market-beating dividend yields. But they also have high-quality business models, durable competitive advantages, and strong dividend payouts that can withstand recessions.
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.
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