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Dividend Aristocrats are usually known for consistency, not speed. Their long histories of raising dividends make them popular among income investors, but they’re not always the first stocks that come to mind when the market is moving higher.
However, some of these companies are doing both- delivering dependable income while outperforming the S&P 500 so far this year.
To find these companies, I screened for Dividend Aristocrats with positive market momentum, broad analyst coverage, and bullish consensus ratings. I then narrowed the results to the three highest-yielding stocks.
These names show that investors don’t always have to choose between a reliable dividend and solid share-price gains.
How I came up with these stocks
Using Barchart’s Stock Screener, I selected the following filters to build my list:
・Annual Dividend Yield % (FWD): Left blank so I could sort the results later from highest to lowest.
・YTD Performance Difference From Market: I looked for stocks that had outperformed the S&P 500 by at least 1% YTD. The index has gained 9.70% this year, so qualifying stocks had gained at least 10% since the beginning of the year.
・Number of Analysts: Stocks covered by 12 or more analysts. The more coverage, the better the consensus.
・Current Analyst Rating: “Moderate” or “Strong Buy” stocks.
・Dividend Investing Ideas: Dividend Aristocrats.
The screen returned 18 results, which I arranged from highest to lowest yields. Then, I’ll take the top three.
Let’s start with the first Dividend Aristocrat:
J.M. Smucker Company (SJM)
J.M. Smucker Co. is a packaged food company that manufactures and markets a broad portfolio of branded consumer products. While it is best known for its fruit spreads and jams, the company also owns popular brands across coffee, peanut butter, pet food, frozen sandwiches, baking products, and sweet baked snacks.
And since many of these products are now household staples, demand tends to remain relatively stable across different market environments, making J.M. Smucker Co. more resilient than most.
SJM stock is up 18% year-to-date, outperforming the S&P 500 by nearly nine percentage points.
For dividend investors, outperforming the S&P 500 might matter, but it isn’t everything. The company also pays $4.40 per share annually, which translates to an attractive yield of around 4%.
Meanwhile, a consensus among 18 analysts rates the stock a “Moderate Buy,” and its target prices imply moderate upside over the next year.
Chevron Corp (CVX)
Chevron Corp is a global energy company that produces crude oil and natural gas and refines fuels. The company also manufactures transportation fuels, petrochemicals, and additives. It recently signed a licensing agreement with ZL Chemicals to commercialize Chevron-developed surfactant technology, which can improve oil recovery from shale reservoirs by increasing the amount of crude that can be extracted from existing wells.
CVX stock is up almost 27% year-to-date, easily outperforming the S&P 500.
As for dividends, Chevron pays a forward annual dividend of $7.12, translating to a yield of around 3.8%.
Meanwhile, a consensus among 25 analysts rates the stock a “Moderate Buy,” while target prices suggest as much as 23% upside potential over the next 52 weeks.
Stanley Black & Decker (SWK)
The last Dividend Aristocrat on my list is Stanley Black & Decker, a global manufacturer of tools and industrial equipment. Its DEWALT brand recently launched DALE, a drilling robot that can drill up to 10 times faster than traditional methods. Perhaps it's still too early to gauge the commercial impact, but, the launch demonstrates that the company’s not content with coasting on its existing product line and is pushing for innovation.
The stock is up 19% year-to-date, outperforming the S&P 500 by more than nine percentage points.
In terms of dividends, Stanley Black & Decker pays $3.32 yearly, which translates to a yield of approximately 3.7%.
Finally, the consensus among 16 analysts rates the stock a “Moderate Buy,” while its high target price suggests as much as 25% potential upside over the next year.
Final thoughts
Income stocks don’t always have to come at the expense of momentum. Chevron, J.M. Smucker, and Stanley Black & Decker show that Dividend Aristocrats aren’t always slow-moving and that dividend income and strong share-price performance can go hand in hand.
That’s what makes these stocks worth keeping on the radar. They’ve continued raising payouts through good years and bad, while still giving investors a chance to earn more than just a steady dividend check.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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