Dividend aristocrats have a good history of distributing payouts to their investors. These corporations are listed on the S&P 500 and have raised their dividends for at least 25 consecutive years.
These stocks aren’t the ones you would pick to outperform the market. However, these same firms offer more stability than most assets. Investors can find a good margin of safety and solid cash flow if they explore dividend aristocrats. These are some of the dividend aristocrats that can grow your portfolio.
IBM (IBM)
IBM (NYSE:IBM) has been going through a renaissance as it generates more revenue from cloud computing and artificial intelligence. The stock has rallied by more than 40% over the past year and has a 3.60% dividend yield. Shares currently trade at a 23 P/E ratio.
The company reported good earnings in the fourth quarter of 2023. During that quarter, revenue reached $17.4 billion and went up by 4% year-over-year. Demand for artificial intelligence solutions contributed to the rally.
CEO Arvind Krishna, IBM chairman and CEO, offered these remarks about artificial intelligence in the Q4 press release.
“Client demand for AI is accelerating and our book of business for watsonx and generative AI roughly doubled from the third to the fourth quarter,” he stated. The new technology will make it easier for IBM to achieve its objectives for 2024. IBM is aiming to grow revenue in the mid-single-digits for the full year 2024. This makes it one of those dividend aristrocrats to consider.
Realty Income (O)
Realty Income (NYSE:O) is a real estate investment trust with over 55 years of real estate investing experience. The company aims to generate attractive risk-adjusted returns over the long run while paying out monthly dividends.
Realty Income is known for raising its dividend every quarter. Investors currently receive a monthly dividend of $0.2565 per share, but it’s due to increase in March. Funds from operations per share took a small step backward in Q4 2023 going from $1.05 to $0.98. However, it’s more than enough to cover the dividend. Adjusted funds from operations per share inched higher from $1.00 per share to $1.01 per share. Revenue increased by 21.1% year-over-year.
Realty Income has a large real estate portfolio with globally recognized clients. Casinos, warehouses, grocery stores, convenience stores, fast food restaurants, and other businesses are Realty Income tenants. These companies can keep up with the monthly rent payments which means stable income. Realty Income currently has a 5.85% dividend yield.
T. Rowe Price (TROW)
T. Rowe Price (NASDAQ:TROW) is a financial firm that assists clients with investment management and other financial services. The firm serves a vast array of clients ranging from individuals to corporations.
The stock has a 14 P/E ratio and a 4.50% dividend yield. T. Rowe Price is flat for the year but is up by 10% over the past five years. The company has healthy net profit margins and has been growing its financials.
T. Rowe Price reported a 7.7% year-over-year revenue growth in Q4 2023. Net income attributable to T. Row Price increased by 64.5% year-over-year. Revenue was flat across the year while net income was up by 14.8% year-over-year.
The firm’s large-cap funds had a strong year that helped to offset net outflows. CEO Rob Sharps mentioned that the company is seeing numerous indicators that suggest better days are ahead. T. Rowe Price offers a good valuation and a high yield. If better days are ahead, investors can expect to receive plenty of cash flow and some appreciation.
On the date of publication, Marc Guberti did not have (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.com Publishing Guidelines.
