Long-term dividend-growth investors got some good news this week: The list of 64 Best Dividend Stocks You Can Count On in 2023 (opens in new tab) and beyond is expanding to 67 equities next month.
Standard & Poor’s annual rebalancing of the S&P 500 Dividend Aristocrats – an index of S&P 500 companies that have increased their dividends (opens in new tab) without fail for at least 25 consecutive years – will result in three additions to the equity income benchmark prior to the market open on Feb. 1.
Without further ado, here are the 2023 additions to the S&P 500 Dividend Aristocrats (opens in new tab):
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J.M. Smucker
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Market value: $16.0 billionDividend yield: 2.7%Analysts’ consensus recommendation: Hold J.M. Smucker (SJM (opens in new tab)) is a well-known consumer staples (opens in new tab) stock thanks to the company’s wide range of popular brands. Folgers and Dunkin’ coffee, Jif peanut butter and Smucker’s eponymous jams and jellies represent just a few of its offerings.
Perhaps less well known is that SJM is an equity income machine, having increased its dividend annually for 25 years, per S&P.
And those dividends sure have come in handy.
Over the past three years, SJM has generated an annualized total return (price appreciation plus dividends) of 15%, vs. 8.6% for the S&P 500. Its more recent performance is even more handsome: Over the past 52 weeks, SJM has generated a total return of 8.4%. The broader market, by comparison, is sitting on a 52-week total return of -7.4%.
Be aware, however, that SJM’s recent outperformance has Wall Street mostly sitting on the sidelines at current levels. Of the 16 analysts covering the stock tracked by S&P Global Market Intelligence, one rates it at Strong Buy, 10 have it a Hold, three call it a Sell and two say it’s a Strong Sell. That works out to a consensus recommendation of Hold.
Nordson
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Market value: $13.9 billionDividend yield: 1.1%Analysts’ consensus recommendation: BuyNordson (NDSN (opens in new tab)) boosts the industrial (opens in new tab) sector’s representation in the Dividend Aristocrats. The company designs and manufactures systems that dispense, apply and control fluids like adhesives, coatings and sealants. As such, Nordson’s customers are found in industries ranging from food packaging and biotechnology (opens in new tab) to aerospace (opens in new tab) and semiconductor (opens in new tab) manufacturing.
Although the yield on the payout might not wow investors, Nordson’s epic streak of dividend increases certainly proves the company’s commitment to returning cash to shareholders. S&P says the company has hiked its payout for 42 consecutive years. By Nordson’s count, it’s raised the dividend for 59 straight years (opens in new tab).
Either way, those regular bumps to the dividend have helped NDSN become a long-time market beater (opens in new tab). Indeed, shares have outperformed the broader market on an annualized total return basis over the past one, three, five, 10, 15 and 20 years.
Of the 11 analysts covering the stock tracked by S&P Global Market Intelligence, five rate it at Strong Buy and six call it a Hold. That works out to a consensus recommendation of Buy, albeit with mixed conviction.
C.H. Robinson Worldwide
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Market value: $11.7 billionDividend yield: 2.5%Analysts’ consensus recommendation: HoldC.H. Robinson Worldwide (CHRW (opens in new tab)) provides freight transportation (opens in new tab) and logistics (opens in new tab) services to industries around the globe. It also delivers reliable increases to its dividend each and every year.
The company joins the Dividend Aristocrats in February by dint of its 25-year streak of payout hikes.
The most recent increase was announced in November 2022 – a 10.9% bump in the disbursement to 61 cents per share quarterly.
CHRW stock has a mixed record when compared to the broader market over the longer term. Shares have outperformed the S&P 500 on an annualized total return basis over the past one- and three-year periods, but are laggards over the past five, 10 and 15 years. Going back 20 years, CHRW’s annualized total return beats the S&P 500 by a bit more than 2 percentage points.
The Street isn’t particularly bullish on the stock’s prospects at current levels, at least not over the next 12 to 18 months. Of the 28 analysts covering CHRW, three rate it at Strong Buy, one says Buy, 17 have it at Hold, three call it a Sell and four say it’s a Strong Sell. That works out to a consensus recommendation of Hold, with a negative tilt.