Category Monthly Dividend

Updated on March 13th, 2025 by Bob Ciura

Return on invested capital, or ROIC, is a valuable financial ratio that investors can add to their research process.

Understanding ROIC and using it to screen for high ROIC stocks is a good way to focus on the highest-quality businesses.

With this in mind, we ran a stock screen to focus on the highest ROIC stocks in the S&P 500.

You can download a free copy of the top 100 stocks with the highest ROIC (along with important financial metrics like dividend yields and price-to-earnings ratio) by clicking on the link below:

 

Using ROIC allows investors to filter out the highest-quality businesses that are effectively generating a return on capital.

This article will explain ROIC and its usefulness for investors. It will also list the top 10 highest ROIC stocks right now.

Table Of Contents

You can use the links below to instantly jump to an individual section of the article:

What Is ROIC?

Put simply, return on invested capital (ROIC) is a financial ratio that shows a company’s ability to allocate capital. The common formula to calculate ROIC is to divide a company’s after-tax net operating profit, by the sum of its debt and equity capital.

Once the ROIC is calculated, it is evaluated against a company’s weighted average cost of capital, commonly referred to as WACC.

If a company’s WACC is not immediately available, it can be calculated by taking a weighted average of the cost of a company’s debt and equity.

Cost of debt is calculated by averaging the yield to maturity for a company’s outstanding debt. This is fairly easy to find, as a publicly-traded company must report its debt obligations.

Cost of equity is typically calculated by using the capital asset pricing model, otherwise known as CAPM.

Once the WACC is calculated, it can be compared with the ROIC. Investors want to see a company’s ROIC exceed its WACC.

This indicates the underlying business is successfully investing its capital to generate a profitable return. In this way, the company is creating economic value.

Generally, stocks generating the highest ROIC are doing the best job of allocating their investors’ capital. With this in mind, the following section ranks the 10 stocks with the highest ROIC.

The Top 10 Highest ROIC Stocks

The following 10 stocks have the highest ROIC in the Sure Analysis Research Database. Stocks are listed by ROIC, from lowest to highest.

High ROIC Stock #10: Yum Brands Inc. (YUM)

• Return on invested capital: 44.6%

Yum Brands owns the KFC, Pizza Hut, Taco Bell, and The Habit Restaurants chains. It is present in more than 155 countries and has more than 59,000 restaurants, 60% of which are located abroad. KFC generates about half of the total revenue and operating profit of the company.

In early February, Yum Brands reported (2/6/25) results for Q4-2024. It grew its sales 8% over the prior year’s quarter thanks to 14% growth at Taco Bell, 6% growth at KFC and 3% growth at Pizza Hut. Store count grew 5%. Digital sales were over $9 billion and exceeded 50% of total sales.

Earnings-per-share grew 28%, from $1.26 to $1.61, and exceeded the analysts’ consensus by $0.01. Yum Brands keeps opening new stores at a fast pace. Management provided guidance for 8% growth of operating income in 2025. Accordingly, we expect earnings-per-share of $5.92 this year.

The strength of Yum’s brands and their appeal to consumers constitute a significant competitive advantage. Thanks to its established brands, the company enjoys reliable free cash flows.

As a result, the company is not likely to have issues servicing its debt. It is also worth noting that Yum Brands has proved markedly resilient during recessions, mostly thanks to its low-priced fast food offerings.

Click here to download our most recent Sure Analysis report on YUM (preview of page 1 of 3 shown below):

High ROIC Stock #9: TJX Companies (TJX)

• Return on invested capital: 46.9%

TJX Companies is a leading off-price retailer of apparel and home fashions in the U.S. and worldwide. As of November 2, 2024, the company operated 5,057 stores in nine countries.

These include 1,331 T.J. Maxx (26% of total), 1,219 Marshalls (24%) and 941 HomeGoods (19%) in the United States. TJX also operates e-commerce sites. In a normal year, the company generates ~$50 billion in annual revenue and ~$4 billion in net profit.

On 2/26/25, TJX released its fiscal Q4 and full-year 2025 results for the period ending 2/1/25. For the quarter, net sales fell marginally by 0.4% year over year to $16.4 billion due partly from Q4 FY2025 having 13 weeks vs 14 weeks in FY2024.

Consolidated comparable store sales rose 5%, driven by an increase in customer transactions. It witnessed comparable store sales growth across all its divisions with the strongest of 10% at TJX Canada, followed by 7% at TJX International (Europe & Australia), 5% at HomeGoods (U.S.), and 4% at Marmaxx (U.S.).

Diluted earnings-per-share rose 0.8% to $1.23, helped by a 1.2% reduction in its share count. The company repurchased stock at an average price of $123.62 per share.

For fiscal 2025, net sales climbed 4.0% to $56.4 billion with consolidated comparable store sales rising 4%. Net income rose 8.7% to $4.9 billion, and diluted EPS rose 10.4% to $4.26. During this period, TJX used nearly $2.5 billion to buy back shares at an average price of ~$111.88 per share.

Management provided an initial outlook for FY 2026: comparable store sales increase of 2-3% and diluted EPS to be $4.34-4.43.

Click here to download our most recent Sure Analysis report on TJX (preview of page 1 of 3 shown below):

High ROIC Stock #8: Altria Group (MO)

• Return on invested capital: 47.5%

Altria is a tobacco stock that sells cigarettes, chewing tobacco, cigars, e-cigarettes, and more under a variety of brands, including Marlboro, Skoal, and Copenhagen, among others.

With a current dividend yield of nearly 8%, Altria is an ideal retirement investment stock.

This is a period of transition for Altria. The decline in the U.S. smoking rate continues. In response, Altria has invested heavily in new products that appeal to changing consumer preferences, as the smoke-free category continues to grow.

Source: Investor Presentation

The company also has a 35% investment stake in e-cigarette maker JUUL, and a 45% stake in the Canadian cannabis producer Cronos Group (CRON).

Altria Group reported solid financial results for the fourth quarter and full year of 2024. For the fourth quarter, revenue of $5.1 billion beat analyst estimates by $50 million, and increased 1.6% year-over-year. Adjusted EPS of $1.29 beat by a penny.

For the full year, Altria generated adjusted diluted EPS growth of 3.4% and returned over $10.2 billion to shareholders through dividends and share repurchases.

For 2025, Altria expects adjusted diluted EPS in a range of $5.22 to $5.37. This represents an adjusted diluted EPS growth rate of 2% to 5% for 2025.

Click here to download our most recent Sure Analysis report on Altria (preview of page 1 of 3 shown below):

High ROIC Stock #7: Starbucks Corporation (SBUX)

• Return on invested capital: 51.2%

Starbucks began with a single store in Seattle’s Pike Place Market in 1971 and now has more than 39,000 stores worldwide. Nearly half of the stores are in the U.S. and nearly 20% of the stores are in China.

The company operates under the Starbucks brand, but also holds the Teavana, Evolution Fresh, and Ethos Water brands in its portfolio. The company generated $36 billion in annual revenue in fiscal 2024.

In late January, Starbucks reported (1/28/25) financial results for the first quarter of fiscal year 2025 (Starbucks’ fiscal year ends the Sunday closest to September 30th).

Source: Investor Presentation

Comparable store sales declined -4% due to a -4% decline in North America and a -4% decline in international markets. Same-store sales in China fell -6%.

Adjusted earnings-per-share decreased -23%, from $0.90 in the prior year’s quarter to $0.69, but exceeded the analysts’ consensus by $0.02.

Looking further out, Starbucks has a strong growth trajectory available over the long-term thanks to a growing U.S. and International store count, where the company is still in the early innings of expansion, coupled with pricing power.

Click here to download our most recent Sure Analysis report on SBUX (preview of page 1 of 3 shown below):

High ROIC Stock #6: Mastercard Inc. (MA)

• Return on invested capital: 52.9%

MasterCard is a world leader in electronic payments. The company partners with 25,000 financial institutions around the world to provide an electronic payment network. MasterCard has more than 3.1 billion credit and debit cards in use.

On January 30th, 2025, MasterCard announced fourth quarter and full year results for the period ending December 31st, 2024.

For the quarter, revenue improved 15.4% to $7.5 billion, which was $120 million above estimates. Adjusted earnings-per-share of $3.82 compared favorably to $3.18 in the prior year and was $0.13 more than expected.

For the year, revenue grew 12% to $28.2 billion while adjusted earnings-per-share of $14.60 compared to $12.26 in 2023.

On a local currency basis, gross dollar volumes for the quarter grew 12% worldwide to $2.56 trillion during the quarter, with the U.S. improving 9% and the rest of the world higher by 13%.

Cross border volumes remained strong, growing 20% from the prior year and 17% from Q3 2024.

Click here to download our most recent Sure Analysis report on Mastercard (preview of page 1 of 3 shown below):

High ROIC Stock #5: Apple, Inc. (AAPL)

• Return on invested capital: 54.1%

Apple designs, manufactures and sells products such as iPhones, iPads, Mac, Apple Watch and Apple TV. Apple also has a services business that sells music, apps, and subscriptions.

On January 30th, 2025, Apple reported financial results for the first quarter of fiscal year 2025 (Apple’s fiscal year ends the last Saturday in September).

Total sales grew 4% over the prior year’s quarter, to a new record of $124.3 billion, thanks to sustained growth in iPhone, iPad and Wearables across all regions.

Earnings-per-share grew 10%, from $2.18 to $2.40, and exceeded the analysts’ consensus by $0.05. Notably, Apple has missed the analysts’ estimates only once in the last 25 quarters.

Going forward, Apple’s earnings growth will be driven by several factors. One of these is the ongoing cycle of iPhone releases, which creates lumpy results. In the long run, Apple should be able to grow its iPhone sales, albeit in an irregular fashion.

Click here to download our most recent Sure Analysis report on AAPL (preview of page 1 of 3 shown below):

High ROIC Stock #4: Domino’s Pizza Inc. (DPZ)

• Return on invested capital: 59.3%

Domino’s Pizza was founded in 1960. It is the largest pizza company in the world based on global retail sales. The company operates more than 21,000 stores in more than 90 countries.

It generates nearly half of its sales in the U.S. while 99% of its stores worldwide are owned by independent franchisees.

In late February, Domino’s reported (2/24/25) financial results for the fourth quarter of fiscal 2024. Its U.S. same-store sales grew 0.4% and its international same-store sales rose 2.7% over the prior year’s quarter.

Earnings-per-share grew 9%, from $4.48 to $4.89, thanks to higher sales and lower selling costs. Earnings-per-share missed the analysts’ consensus by $0.01, for the first time after 8 consecutive quarters of wide earnings beats.

Domino’s still expects to grow its global retail sales and its operating income by 7% and 8% per year, respectively, until the end of 2028.

The pizza chain has ample room to keep growing for years. Its management sees potential for the addition of more than 10,000 new stores in its top 15 markets.

As the current store count in these countries is approximately 11,000, it is evident that there is still tremendous growth potential even without taking into account the growth potential in the other ~75 markets where the company is present.

Click here to download our most recent Sure Analysis report on DPZ (preview of page 1 of 3 shown below):

High ROIC Stock #3: McKesson Corporation (MCK)

• Return on invested capital: 64.3%

McKesson Corporation traces its lineage to 1833 when its founders began to offer wholesale chemicals and pharmaceuticals in New York City.

In the 190 years since, McKesson has grown into a powerhouse in the pharmaceutical and medical distribution industry and today, generates more than $300 billion in annual revenue.

The company has generated strong growth in the past five years.

Source: Investor Presentation

McKesson posted third quarter earnings on February 5th, 2025, and results were mixed. Adjusted earnings-per-share narrowly beat expectations by four cents, coming to $8.03.

Revenue was up 18% year-over-year to $95.3 billion, a record for McKesson. That was, however, $570 million short of expectations.

Specialty pharmaceutical revenue soared 45% year-over-year to $10.9 billion. This was helped greatly by the continued adoption of GLP-1 medications.

Medical-Surgical revenues fell 3% to $2.9 billion due to lower-than-expected illness season demand. Operating profit was up 4% to $294 million due to cost containment efforts.

Consolidated operating profit was up 16% to $1.5 billion. The company also noted it took an 80% ownership interest in PRISM Vision Holdings for $850 million for its ophthalmology and retina management services.

Click here to download our most recent Sure Analysis report on MCK (preview of page 1 of 3 shown below):

High ROIC Stock #2: Otis Worldwide (OTIS)

• Return on invested capital: 69.0%

Otis Worldwide Corp. debuted as an independent, publicly traded company on April 3rd, 2020, after being spun off from United Technologies (previously UTX, now Raytheon Technologies, RTX).

Today Otis is the leading company for elevator and escalator manufacturing, installation, and service.

On January 29th, 2025, Otis reported financial results for the fourth quarter of fiscal 2024. Sales and organic sales grew 1.5% and 2%, respectively, while adjusted earnings-per-share grew 7%, from $0.87 to $0.93, though they missed the analysts’ consensus by $0.03.

Otis has missed the analysts’ estimates twice after 17 consecutive quarters of having beaten estimates. Backlog grew 10%. This bodes well for the performance of Otis in the upcoming quarters.

Thanks to sustained business momentum, Otis provided positive guidance for 2025. It expects 2%-4% growth of organic sales and adjusted earnings-per-share of $4.00-$4.10.

At the mid-point, this guidance implies 6% growth over the prior year.

Click here to download our most recent Sure Analysis report on OTIS (preview of page 1 of 3 shown below):

High ROIC Stock #1: Cardinal Health (CAH)

• Return on invested capital: 71.6%

Cardinal Health is one of the “Big 3” drug distribution companies along with McKesson (MKC) and AmerisourceBergen (ABC). Cardinal Health serves over 24,000 United States pharmacies and more than 85% of the country’s hospitals.

Over 90% of the company’s revenue comes from the Pharma & Specialty areas.

Source: Investor Presentation

With 36 years of dividend increases, the company is a member of the Dividend Aristocrats Index.

On January 30th, 2025, Cardinal Health announced results for the second quarter of fiscal year 2025 for the period ending December 31st, 2024. For the quarter, revenue decreased 3.7% to $55.3 billion, but this was $330 million above estimates.

On an adjusted basis, earnings of $468 million, or $1.93 per share, compared favorably to earnings of $464 million, or $1.89 per share, in the prior year. Adjusted EPS was $0.17 better than expected.

Collectively the three major pharmaceutical wholesalers have a competitive advantage in the industry. Competition is held at bay by the massive scale already in place and the exceptionally low margins.

Cardinal Health has proven to be a solid operator in many ways – strong earnings for the past decade, a growing dividend and ample interest coverage.

Click here to download our most recent Sure Analysis report on CAH (preview of page 1 of 3 shown below):

Final Thoughts

There are many different ways for investors to value stocks. One popular valuation method is to calculate a company’s return on invested capital.

By doing so, investors can get a better gauge of companies that do the best job of investing their capital.

ROIC is by no means the only metric that investors should use to buy stocks. There are many other worthwhile valuation methods that investors should consider.

That said, the top 10 ROIC stocks on this list have proven the ability to create economic value for shareholders.

Further Reading

If you are interested in finding high-quality dividend growth stocks suitable for long-term investment, the following Sure Dividend databases will be useful:

Major U.S. equities indexes lost ground Thursday amid worries about the economy and political uncertainty.

The S&P 500 dropped 1.4%, falling into a correction for the first time since 2023. The Dow closed the session 1.3% lower, nearing a correction as well, while the Nasdaq dropped 2%.

Adobe (ADBE) shares suffered the heaviest loss of any stock in the S&P 500, plunging 14.4% after the maker of web design, photo, and video software provided an underwhelming outlook.

Super Micro Computer (SMCI) shares also dropped, falling 7.1% to reverse gains posted in the previous session after a volatile run for the server maker’s stock.

Shares of Ticketmaster parent Live Nation (LYV) fell 6.5%. The company remains the subject of an antitrust lawsuit filed last year by the U.S. Department of Justice, and federal officials accused the company earlier this week of failing to preserve text and chat messages relevant to the case.

Intel (INTC) surged 14.2%, logging the S&P 500’s top daily performance, after the chipmaker announced former board member Lip-Bu Tan will become its new CEO. The move followed reports that TSMC (TSM) approached other chip firms about forming a joint venture to run Intel’s foundry business.

Dollar General (DG) reported better-than-expected sales for the fourth quarter, helping drive gains for shares of discount retailers. However, the company said a review of its store portfolio weighed on profitability and expressed caution about consumers’ spending capacity. Dollar General shares gained 6.1%, while shares of rival Dollar Tree (DLTR) were up 5.8%.

The spot price of gold popped to an all-time high, bolstered by concerns about tariffs and anticipation of potential interest-rate cuts by the Federal Reserve. Investors often turn to the metal as a safe haven in times of market uncertainty. The soaring price provided a boost for mining stocks including Newmont (NEM), the world’s largest gold producer, with shares climbing 4.8% Thursday.

Updated on March 13th, 2025 by Bob Ciura

DRIP stands for Dividend Reinvestment Plan. When an investor is enrolled in DRIP stocks, it means that incoming dividend payments are used to purchase more shares of the issuing company – automatically.

Many businesses offer DRIPs that require the investors to pay fees. Obviously, paying fees is a negative for investors. As a general rule, investors are better off avoiding DRIP stocks that charge fees.

Fortunately, many companies offer no-fee DRIP stocks. These allow investors to use their hard-earned dividends to build even larger positions in their favorite high-quality, dividend-paying companies – for free.

The Dividend Champions are a group of quality dividend stocks that have raised their dividends for at least 25 consecutive years.

You can download your free copy of the Dividend Champions list, along with relevant financial metrics like price-to-earnings ratios, dividend yields, and payout ratios, by clicking on the link below:

 

Think about the powerful combination of DRIPs and Dividend Champions…

You are reinvesting dividends into a company that pays higher dividends every year. This means that every year you get more shares – and each share is paying you more dividend income than the previous year.

This makes a powerful (and cost-effective) compounding machine.

This article takes a look at the top 15 Dividend Champions that are no-fee DRIP stocks, ranked in order of expected total returns from lowest to highest.

The updated list for 2025 includes our top 15 Dividend Champions, ranked by expected returns according to the Sure Analysis Research Database, that offer no-fee DRIPs to shareholders.

You can skip to analysis of any individual Dividend Champion below:

Additionally, please see the video below for more coverage.

#15: Realty Income (O)

• 5-year expected annual returns: 9.0%

Realty Income is a retail real estate focused REIT that has become famous for its successful dividend growth history and monthly dividend payments.

Realty Income owns retail properties that are not part of a wider retail development (such as a mall), but instead are standalone properties.

This means that the properties are viable for many different tenants, including government services, healthcare services, and entertainment.

Source: Investor Presentation

On February 25, 2025, Realty Income Corporation reported its financial results for the fourth quarter of 2024.

The company achieved a 1.8% increase in core funds from operations (FFO) for the year, alongside over $550 million in acquisition volume. The year concluded with a strong 98.5% occupancy rate.

These achievements reflect the dedication and expertise of Realty Income’s best-in-class team, positioning the company well for the near term.

Click here to download our most recent Sure Analysis report on Realty Income (preview of page 1 of 3 shown below):

#14: Illinois Tool Works (ITW)

• 5-year expected annual returns: 9.3%

Illinois Tool Works is a diversified multi-industrial manufacturer with seven unique operating segments: Automotive, Food Equipment, Test & Measurement, Welding, Polymers & Fluids, Construction Products and Specialty Products.

Last year the company generated $15.9 billion in revenue.

On February 5th, 2025, Illinois Tool Works reported fourth quarter 2024 results for the period ending December 31st, 2024. For the quarter, revenue came in at $3.9 billion, shrinking 1.3% year-over-year.

Sales declined 3.7% in the Automotive OEM segment, the largest out of the company’s seven segments. The Food Equipment and Test & Measurement and Electronics segments grew revenues by 2.7% and 2.2%, respectively.

Click here to download our most recent Sure Analysis report on ITW (preview of page 1 of 3 shown below):

#13: A.O. Smith (AOS)

• 5-year expected annual returns: 10.0%

A.O. Smith is a leading manufacturer of residential and commercial water heaters, boilers and water treatment
products. It generates two-thirds of its sales in North America, and most of the rest in China.

A.O. Smith has raised its dividend for 30 years in a row, making the company a Dividend Aristocrat. The company was founded in 1874 and is headquartered in Milwaukee, WI.

A.O. Smith reported its fourth quarter earnings results on January 30. The company generated revenues of $912 million during the quarter, which represents a decline of 8% compared to the prior year’s quarter.

A.O. Smith’s revenues were down by 7% in North America, but the international business saw a wider decline, primarily due to lower sales in China, which has ongoing troubles in its real estate market.

A.O. Smith generated earnings-per-share of $0.85 during the fourth quarter, which was down 12% on a year over year basis. This was caused by lower revenues and lower margins, with buybacks not being able to fully offset these headwinds.

Click here to download our most recent Sure Analysis report on AOS (preview of page 1 of 3 shown below):

#12: Universal Health Realty Trust (UHT)

• 5-year expected annual returns: 9.6%

Universal Health Realty Income Trust operates as a real estate investment trust (REIT), specializing in the healthcare sector. The trust owns healthcare and human service-related facilities.

Its property portfolio includes acute care hospitals, medical office buildings, rehabilitation hospitals, behavioral healthcare facilities, sub-acute care facilities and childcare centers. Universal Health’s portfolio consists of 69 properties in 20 states.

On October 24, 2024, UHT reported its third quarter results. Funds from Operations (FFO) saw a slight improvement, rising to $11.3 million, or $0.82 per diluted share, from $11.2 million, or $0.81 per diluted share, in the third quarter of 2023. This increase in FFO was mainly due to the rise in net income during the period.

The company maintained a strong liquidity position with significant cash reserves and continued strategic investments to enhance its property portfolio.

Click here to download our most recent Sure Analysis report on UHT (preview of page 1 of 3 shown below):

#11: Tompkins Financial (TMP)

• 5-year expected annual returns: 9.7%

Tompkins Financial is a regional financial services holding company headquartered in Ithaca, NY that can trace its roots back more than 180 years. It has total assets of about $8 billion, which produce about $300 million in annual revenue.

The company offers a wide range of services, including checking and deposit accounts, time deposits, loans, credit cards, insurance services, and wealth management to its customers in New York and Pennsylvania.

Tompkins also sports a 38-year dividend increase streak after boosting its payout for November 2024.

Tompkins posted fourth quarter and full-year earnings on January 31st, 2025, and results were somewhat mixed.

Earnings-per-share came in 15 cents ahead of estimates at $1.37. Revenue was up more than 8% year-over-year to $77.1 million, but missed estimates by about 1%.

Net interest margin for the fourth quarter was 2.93%, up from 2.79% in the third quarter, and up from 2.82% a year ago.

Total average cost of funds was 1.88% for Q4, down 13 basis points from Q3 as funding mix and lower interest rates both contributed.

Click here to download our most recent Sure Analysis report on TMP (preview of page 1 of 3 shown below):

#10: Northwest Natural Holding (NWN)

• 5-year expected annual returns: 10.4%

NW Natural was founded in 1859 and has grown from just a handful of customers to serving more than 760,000 today. The utility’s mission is to deliver natural gas to its customers in the Pacific Northwest.

The company’s locations served are shown in the image below.

Source: Investor Presentation

On February 28, 2025, Northwest Natural Holding Company (NWN) reported its financial results for the fourth quarter of 2024.

The company achieved an adjusted net income of $90.6 million for the full year, or $2.33 per share, slightly down from $93.9 million, or $2.59 per share, in 2023.

This decrease was primarily due to regulatory lag affecting the first ten months of 2024 until new Oregon gas utility rates became effective on November 1.

Click here to download our most recent Sure Analysis report on NWN (preview of page 1 of 3 shown below):

#9: Nucor Corp. (NUE)

• 5-year expected annual returns: 10.8%

Nucor is the largest publicly traded US-based steel corporation based on its market capitalization. The steel industry is notoriously cyclical, which makes Nucor’s streak of 52 consecutive years of dividend increases even more remarkable.

Nucor Corporation reported its fourth-quarter 2024 earnings on January 28, 2025, highlighting strong operational performance despite ongoing challenges in the steel industry.

The company posted net earnings of $287 million, or $1.22 per share, and $8.46 per share for the full year. EBITDA reached $751 million for the quarter and nearly $4.4 billion for the year.

Source: Investor Presentation

Nucor ended 2024 with $4.1 billion in cash, reflecting its robust financial position.

As a commodity producer, Nucor is vulnerable to fluctuations in the price of steel. Steel demand is tied to construction and the overall economy.

Investors should be aware of the significant downside risk of Nucor as it is likely to perform poorly in a protracted recession.

That said, Nucor has raised its base dividend for 52 straight years. This indicates the strength of its business model and management team.

Click here to download our most recent Sure Analysis report on NUE (preview of page 1 of 3 shown below):

#8: Johnson & Johnson (JNJ)

• 5-year expected annual returns: 11.1%

Johnson & Johnson is a diversified health care company and a leader in the area of innovative medicines and medical devices Johnson & Johnson was founded in 1886 and employs nearly 132,000 people around the world.

On January 22nd, 2025, Johnson & Johnson announced fourth quarter and full year results for the period ending December 31st, 2024.

Source: Investor Presentation

For the quarter, revenue grew 5.1% to $22.5 billion, which beat estimates by $50 million. Adjusted earnings-per-share of $2.04 compared to $2.29 in the prior year, but this was $0.02 above expectations.

For the year, revenue grew 4.3% to $88.8 billion while adjusted earnings-per-share of $9.98 was up slightly from the prior year. Results included adjustments related to the costs of acquisitions.

Click here to download our most recent Sure Analysis report on JNJ (preview of page 1 of 3 shown below):

#7: Polaris Inc. (PII)

• 5-year expected annual returns: 11.3%

Polaris designs, engineers, and manufactures snowmobiles, all-terrain vehicles (ATVs) and motorcycles. In addition, related accessories and replacement parts are sold with these vehicles through dealers located throughout the U.S.

The company operates under 30+ brands including Polaris, Ranger, RZR, Sportsman, Indian Motorcycle, Slingshot and Transamerican Auto Parts. The global powersports maker, serving over 100 countries, generated $7.2 billion in sales in 2024.

Source: Investor Presentation

On January 28th, 2025, Polaris announced fourth quarter and full year results. For the quarter, revenue declined 23.6% to $1.75 billion, but this was $70 million higher than excepted. Adjusted earnings-per-share of $0.92 compared very unfavorably to $1.98 in the prior year, but topped estimates by $0.02.

For the year, revenue fell 19.7% to $7.12 billion while adjusted earnings-per-share of $3.25 was down from $9.16 in 2023.

For the quarter, Marine sales declined 4%, On-Road was lower by 21%, and Off-Road, the largest component of the company, decreased 25%.

As with previous quarters, decreases in all three businesses were mostly due to lower volumes. Off-Road was also negatively impacted planned reductions in shipments. Parts, Garments, and Accessories were weaker in the Off-Road and On-Road segments.

Click here to download our most recent Sure Analysis report on PII (preview of page 1 of 3 shown below):

#6: New Jersey Resources (NJR)

• 5-year expected annual returns: 11.9%

New Jersey Resources provides natural gas and clean energy services, transportation, distribution, asset management and home services through its five main subsidiaries. The company owns both regulated and non-regulated operations.

NJR’s principal subsidiary, New Jersey Natural Gas (NJNG), owns and operates natural gas transportation and distribution infrastructure serving over half a million customers.

NJR Clean Energy Ventures (CEV) invests in and operates solar projects, to provide customers with low-carbon solutions.

NRJ Energy Services manages a portfolio of natural gas transportation and storage assets, as well as provides physical natural gas services to customers in North America.

The midstream subsidiary owns and invests in several large midstream gas projects.

Finally, the home services business provides heating, central air conditioning, water heaters, standby generators, and solar products to residential homes.

Source: Investor Presentation

New Jersey Resources was founded in 1952 and has paid a quarterly dividend since. The company has increased its annual dividend for 28 consecutive years.

On November 25th, 2024, NJR sold its 91MW residential solar portfolio to Spruce Power Holdings Corporation (SPRU) for $132.5 million, which it will use to pay down debt and for working capital.

New Jersey Resources reported first quarter 2025 results on February 3rd, 2025, for the period ending December 31st, 2024. First quarter net income of $131.3 million compared favorably to the prior year quarter’s $89.4 million.

Consolidated net financial earnings (NFE) amounted to $128.9 million, compared to net financial earnings (NFE) of $72.4 million in Q1 2024 and NFE per share of $1.29 compared to $0.74 per share one year ago.

Click here to download our most recent Sure Analysis report on NJR (preview of page 1 of 3 shown below):

#5: Emerson Electric (EMR)

• 5-year expected annual returns: 11.9%

Emerson Electric is a diversified global leader in technology and engineering. Its global customer base and diverse product and service offerings afford it more than $17 billion in annual revenue.

Emerson posted first quarter earnings on February 5th, 2025, and results were mixed. Adjusted earnings-per-share came to $1.38, which was a dime ahead of estimates. Revenue was up 1.5% year-over-year to $4.18 billion, but missed estimates by $40 million.

Underlying sales rose 2%, and adjusted segment EBITDA margin was 28% of revenue, a 340-basis point improvement from the year-ago period. Gross profit reached a record level of 53.5% of revenue, supported by operational efficiencies, cost controls, and acquisition synergies.

Free cash flow was $694 million, up 89% year-over-year, with working capital improvements being the primary driver. Emerson’s backlog rose to $7.3 billion, excluding forex translation impacts.

Click here to download our most recent Sure Analysis report on EMR (preview of page 1 of 3 shown below):

#4: Arrow Financial Corporation (AROW)

• 5-year expected annual returns: 12.7%

Arrow Financial Corporation is a multi-bank holding company based in Glen Falls, New York. The company operates through two main subsidiary banks, the Glens Falls National Bank and Trust Company, and the Saratoga National Bank and Trust Company.

Arrow Financial Corporation is also the parent company of North Country Investment Advisers and Update Agency, an insurance agency. The company is a small cap, and it produces about $163 million in annual revenue. Arrow Financial has increased its dividend for 28 consecutive years.

Arrow posted fourth quarter and full-year earnings on January 30th, 2025, with earnings-per-share coming to 27 cents, and revenue at just over $31 million.

The company’s adjusted net income was $7.8 million, or 47 cents per share after removing non-recurring items. These were related to charges and expenses related to the repositioning of the securities portfolio, primarily.

Net interest margin came to 2.83%, which was up from 2.78% in the prior quarter. That’s still quite low based upon our universe of banks. Loan growth was 7% on an annualized basis, or $59 million, from Q3. Loan balances ended the year at $3.4 billion, which is a record for Arrow.

Click here to download our most recent Sure Analysis report on AROW (preview of page 1 of 3 shown below):

#3: S&P Global (SPGI)

• 5-year expected annual returns: 13.6%

S&P Global is a worldwide provider of financial services and business information and revenue of over $13 billion.

Through its various segments, it provides credit ratings, benchmarks and indices, analytics, and other data to commodity market participants, capital markets, and automotive markets.

S&P Global has paid dividends continuously since 1937 and has increased its payout for 51 consecutive years.

S&P posted fourth quarter and full-year earnings on February 11th, 2025, and results were much better than expected on both the top and bottom lines.

Adjusted earnings-per-share came to $3.77, which was a staggering 30 cents ahead of estimates. Earnings rose from $3.13 a year ago.

Revenue was up 14% year-over-year to $3.59 billion, beating estimates by $90 million. The company posted revenue growth in all of its operating segments, in addition to strong operating margin expansion.

Operating expenses rose slightly from $2.26 billion to $2.33 billion year-over-year. That led to operating profit of $1.68 billion, sharply higher from $1.39 billion a year ago.

With dividend growth above 10%, SPGI is one of the rock solid dividend stocks.

Click here to download our most recent Sure Analysis report on SPGI (preview of page 1 of 3 shown below):

#2: Nordson Corporation (NDSN)

• 5-year expected annual returns: 14.6%

Nordson was founded in 1954 in Amherst, Ohio by brothers Eric and Evan Nord, but the company can trace its roots back to 1909 with the U.S. Automatic Company.

Today the company has operations in over 35 countries and engineers, manufactures, and markets products used for dispensing adhesives, coatings, sealants, biomaterials, plastics, and other materials, with applications ranging from diapers and straws to cell phones and aerospace.

Source: Investor Presentation

On December 11th, 2024, Nordson reported fourth quarter results for the period ending October 31st, 2024. For the quarter, the company reported sales of $744 million, 4% higher compared to $719 million in Q4 2023, which was driven by a positive acquisition impact, and offset by organic decrease of 3%.

Industrial Precision saw sales decrease by 3%, while the Medical and Fluid Solutions and Advanced Technology Solutions segments had sales increases of 19% and 5%, respectively.

The company generated adjusted earnings per share of $2.78, a 3% increase compared to the same prior year period.

Click here to download our most recent Sure Analysis report on NDSN (preview of page 1 of 3 shown below):

#1: Hormel Foods (HRL)

• 5-year expected annual returns: 14.9%

Hormel Foods is a juggernaut in the food products industry with nearly $10 billion in annual revenue. It has a large portfolio of category-leading brands. Just a few of its top brands include include Skippy, SPAM, Applegate, Justin’s, and more than 30 others.

It has also pursued acquisitions to drive growth. For example, in 2021, Hormel acquired the Planters snack nuts business from Kraft-Heinz (KHC) for $3.35 billion, which has boosted Hormel’s growth.

Source: Investor Presentation

Hormel posted fourth quarter and full-year earnings on December 4th, 2024, and results were in line with expectations. The company posted adjusted earnings-per-share of 42 cents, which met estimates. Revenue was off 2% year-on-year to $3.14 billion, also hitting estimates.

Operating income was $308 million for the quarter on an adjusted basis, or 9.8% of revenue. Operating cash flow was $409 million for Q4. For the year, sales were $11.9 billion, and adjusted operating income was $1.1 billion, or 9.6% of revenue. Adjusted earnings-per-share was $1.58. Operating cash flow hit a record of $1.3 billion.

Guidance for 2025 was initiated at $11.9 billion to $12.2 billion in sales, with organic net sales growth of 1% to 3%.

Click here to download our most recent Sure Analysis report on HRL (preview of page 1 of 3 shown below):

Final Thoughts and Additional Resources

Enrolling in DRIP stocks can be a great way to compound your portfolio income over time. Additional resources are listed below for investors interested in further research for DRIP stocks.

For dividend growth investors interested in DRIP stocks, the 15 companies mentioned in this article are a great place to start. Each business is very shareholder friendly, as evidenced by their long dividend histories and their willingness to offer investors no-fee DRIP stocks.

At Sure Dividend, we often advocate for investing in companies with a high probability of increasing their dividends each and every year.

If that strategy appeals to you, it may be useful to browse through the following databases of dividend growth stocks:

• The Dividend Kings List is even more exclusive than the Dividend Aristocrats. It is comprised of 54 stocks with 50+ years of consecutive dividend increases.
• The High Dividend Stocks List: stocks that appeal to investors interested in the highest yields of 5% or more.
• The Monthly Dividend Stocks List: stocks that pay dividends every month, for 12 dividend payments per year.

Updated on March 13th, 2025 by Nathan Parsh

The Dividend Aristocrats are 69 companies in the S&P 500 Index that have raised their dividends for at least 25 years in a row. Over the decades, many of these companies have become huge multi-national corporations.

You can see the full list of all 69 Dividend Aristocrats here.

We created a full list of all Dividend Aristocrats and important financial metrics like price-to-earnings ratios and dividend yields. You can download your copy of the Dividend Aristocrats list by clicking on the link below:

 

Disclaimer: Sure Dividend is not affiliated with S&P Global in any way. S&P Global owns and maintains The Dividend Aristocrats Index. The information in this article and downloadable spreadsheet is based on Sure Dividend’s own review, summary, and analysis of the S&P 500 Dividend Aristocrats ETF (NOBL) and other sources, and is meant to help individual investors better understand this ETF and the index upon which it is based. None of the information in this article or spreadsheet is official data from S&P Global. Consult S&P Global for official information.

Kenvue Inc. (KVUE) is a recent addition to the Dividend Aristocrats list, having been spun off from former parent company Johnson & Johnson (JNJ) in 2023.

As a spin-off, Kenvue carries its former parent company’s dividend growth history, and is a Dividend Aristocrat.

This article will analyze Kenvue’s business model, future growth catalysts, and expected returns.

Business Overview

Kenvue operates in the healthcare sector as a consumer products manufacturer. In May 2023, Kenvue was spun off from Johnson & Johnson. Now, Kenvue operates three segments: Self Care, Skin Health & Beauty, and Essential Health.

Self-care’s product portfolio includes cough, cold, allergy, smoking cessation, and pain care products, among others. Skin Health & Beauty holds products for the face, body, hair, and sun.

Essential Health contains products for women’s health, wound care, oral care, and baby care.

Kenvue’s well-known brands include Tylenol, Listerine, Band-Aid, Neutrogena, Nicorette, and Zyrtec.

On February 6th, 2025, Kenvue reported fourth-quarter and full year earnings results.

Source: Investor Presentation

Revenue decreased 0.1% to $3.66 billion, which was was $109 million less than expected. Adjusted earnings-per-share totaled $0.26, which was down from $0.31 in the prior year, but was in-line with estimates.

For the year, revenue grew 0.1% to $15.5 billion while adjusted earnings-per-share of $1.14 compared to $1.29 in 2023.

Organic sales grew 1.7% for the quarter and 1.5% for the year. Pricing and mix added 1% to quarterly sales growth while volume improved 0.7%. Skin Health & Beauty and Self Care were positive for the quarter, but this was offset by weaker results from essential health. The gross profit margin expanded 80 basis points to 56.5%.

Kenvue provided guidance for 2025 as well. The company expects revenue growth to be in a range of -1.0% to 1.0% and adjusted earnings-per-share are projected to be higher by 2%. We anticipate that the company can earn $1.15 per share in 2025.

Growth Prospects

Prior to the spin-off, Johnson & Johnson produced annual earnings growth of 7% from 2013 to 2022, as the company’s diversification allowed it to be one of the more stable companies in the marketplace.

Today, Kenvue consists of just the consumer products businesses, which have often produced the lowest growth rates.

For its part, Kenvue management expects the company to generate organic revenue growth around 3%- 4% per year over the long term. Therefore, we expect Kenvue to grow earnings-per-share by 3% annually through 2030.

Johnson & Johnson’s dividend growth streak of more than six decades is one of the longest in the marketplace. Including the company’s dividend increase announced last summer, Kenvue has a dividend growth streak of 62 years. This qualifies Kenvue as both a Dividend King and a Dividend Aristocrat.

We believe that the penchant for dividend growth is part of Kenvue’s business DNA.

Competitive Advantages & Recession Performance

Kenvue’s former parent company Johnson & Johnson has proven to be one of the most successful companies at navigating recessions.

Though Kenvue no longer benefits from its parent company’s diversification, we believe that it would prove equally effective at handling economic downturns.

Since Kenvue was a subsidiary of Johnson & Johnson during the Great Recession of 2008-2009, there is no data on its earnings-per-share performance during that time.

However, investors can reasonably infer that Kenvue would display a similar degree of resilience during recessions as its former parent company.

The company’s products, such as Band-Aid and Tylenol, are needed regardless of the state of the economy as they directly affect consumers’ health and well-being. As trusted products, they would like to continue to perform well even under adverse conditions.

Overall, Kenvue should continue to raise its dividend for many more years thanks to its low payout ratio, decent recessions resilience, and healthy balance sheet.

Valuation & Expected Returns

We expect Kenvue to generate adjusted earnings-per-share of $1.15 for 2025. Therefore, shares of Kenvue currently trade for a price-to-earnings ratio of 20.

For context, Johnson & Johnson shares have an average price-to-earnings ratio of close to 19 since 2013.

Countering the fact that Kenvue holds some of the industry-leading brands and that its products were lower-margin businesses within the parent company, we have a target price-to-earnings ratio of 14 for the stock.

This implies a future headwind from P/E multiple contraction.

Therefore, if the stock were to reach our target multiple by 2030, valuation could reduce annual returns by 6.9%. EPS growth (estimated at 3% per year) and the dividend yield will generate positive returns.

On July 20th, 2023, Kenvue announced its first-ever quarterly dividend of $0.20 per share. The company raised its dividend 2.5% on July 25th, 2024. The annualized payout of $0.82 per share represents a current yield of 3.6%.

Putting it all together, total returns are expected to be just 0.1% annually through 2030.

Final Thoughts

Kenvue is a relatively new addition to the Dividend Aristocrats list. After decades as part of Johnson & Johnson, Kenvue became an independent entity in 2023.

While we find the legacy business recession-resistant and the high dividend yield attractive for income investors, the total return profile is not high enough for a buy or even a hold recommendation. Due to valuation, we rate KVUE stock as a sell.

Additionally, the following Sure Dividend databases contain the most reliable dividend growers in our investment universe:

• The Dividend Champions: Dividend stocks with 25+ years of dividend increases, including those that may not qualify as Dividend Aristocrats.
• The Best DRIP Stocks: The top 15 Dividend Aristocrats with no-fee dividend reinvestment plans.

If you’re looking for stocks with unique dividend characteristics, consider the following Sure Dividend databases:

The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them monthly:

An index measuring wholesale prices was unchanged in February from January, as falling gas prices and rising egg prices canceled each other out. 

The Producer Price Index stayed flat in February after rising a revised 0.6% in January, as gas prices fell 4.7% and egg prices rose 53.6%. Forecasters had expected a 0.3% increase, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal.

The data shows inflation pressures simmering down faster than expected just before President Donald Trump roiled the inflation outlook in March by imposing, revoking, and promising an array of tariffs against U.S. trading partners that could push up prices if they are actually put into effect. Producer prices influence what consumers pay once products reach the shelves and are considered a leading indicator of consumer price changes.

“The moderation in February conforms with expectations that inflation is set to cool in the coming months before trade tensions start pushing prices upward, though next month’s report will confirm whether February’s softness was a one-off,” Justin Begley, an economist at Moody’s Analytics, wrote in a commentary.

Evidence of cooling inflation could influence officials at the Federal Reserve, who meet next week to set the key fed funds rate, which influences borrowing costs on all kinds of loans.

The Fed has held rates high to discourage spending and stifle inflation but also aims to prevent a severe rise in unemployment. Cooling inflation gives the Fed more leeway to cut rates and boost the economy if Trump’s trade wars start to damage the job market.

Financial markets expect the Fed to hold interest rates steady at the policy committee’s meeting next week, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data.

Dollar General (DG) on Thursday reported better-than-expected fourth-quarter sales, but profit missed estimates due to costs from a review of the retailer’s store portfolio.

The chain posted earnings per share (EPS) of $0.87 on revenue of $10.30 billion. Analysts polled by Visible Alpha estimated $1.52 and $10.26 billion, respectively. The retailer said the profit figure included a $0.81-per-share negative impact from an “optimization review” of its stores. After the review, the company “plans to close 96 Dollar General stores and 45 pOpshelf stores, and convert an additional six pOpshelf stores to Dollar General stores in the first quarter.”

“While the number of closings represents less than one percent of our overall store base, we believe this decision better positions us to serve our customers and communities,” CEO Todd Vasos said.

Same-store sales rose 1.2% year-over-year, above analysts’ 0.93% growth projection.

Dollar General expects fiscal 2025 EPS of $5.10 to $5.80, net sales to grow by 3.4% to 4.4%, and same-store sales to increase by 1.2% to 2.2%. Analysts were expecting full-year EPS of $5.94, revenue growth of 3.96%, and same-store sales growth of 1.77%.

Oppenheimer analysts said Tuesday they expected Dollar General’s 2025 projections to come in below consensus, adding they think the company’s ongoing turnaround effort has so far been “masked by both macro and competitive headwinds.”

Shares of the retailer were up 4% immediately following Thursday’s report. They entered the day down more than 50% over the past year.

Intel (INTC) shares soared in extended trading Wednesday after the company named former board member and chip industry veteran Lip-Bu Tan as its new CEO.

Tan, who is the former CEO of chip software company Cadence Design Systems (CDNS), will succeed interim Co-CEOs David Zinsner and Michelle Johnston Holthaus, who have shared the position since Pat Gelsinger retired in December. Tan will assume the roll next Tuesday.

The development follows a report earlier Wednesday that Taiwan Semiconductor Manufacturing Company (TSM) has approached Nvidia (NVDA), Advanced Micro Devices (AMD) and Broadcom (AVGO) about forming a joint venture to own and run Intel’s foundry division — a unit that manufactures chips for third party customers.

Intel shares have lost more than half their value over the past 12 months, weighed down by the company’s inability to capture a greater share of the lucrative AI chip market and months of restructuring and deal rumors. The stock jumped 10% to $22.84 in the after-hours session Wednesday following news of the CEO appointment.

Below, we break down the technicals on Intel’s chart and identify crucial price levels that investors may be watching.

Potential Rangebound Bottom

Since gapping sharply lower in early August last year, Intel shares have remained mostly rangebound, potentially carving out a market bottom. 

More recently, the stock staged a short-lived rally to the closely followed 200-day moving average (MA) before retracing towards its trading floor of the past seven months.

However, the shares moved higher in Wednesday’s regular trading session and look set for further gains on Thursday.

Let’s locate three crucial overhead areas to watch on Intel’s chart amid the potential for a new trend higher and also identify a major support level worth monitoring if the stock retraces to multi-month lows.

Crucial Overhead Areas to Watch

The first overhead area to watch sits around $22. While the stock is currently projected to open above this price on Thursday, it’s worth looking if bulls can hold this level into tomorrow’s close, given its proximity to a horizontal line that links a range of comparable trading action on the chart from August last year to March this year.

A successful close above this level could see the shares rally to the $26 area. Investors who have bought recent lows may look to lock in profits near the prominent November and March peaks.

Buying above this region could propel a move to around $30. This area would likely provide resistance near the psychological round number and the low of a prior trading range on the chart that preceded the early-August gap lower.

Major Support Level Worth Monitoring

Further selling in Intel shares could see the price revisit multi-month lows around $19. Bargain hunters may seek to scoop up shares in this location near a trendline that connects multiple troughs in the stock between August and February.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.

Updated on March 12th, 2025 by Nathan Parsh

When it comes to dividend growth stocks, not many can surpass the Dividend Aristocrats. The Dividend Aristocrats are a group of 69 stocks in the S&P 500 Index that have increased their dividends for 25+ consecutive years. These companies have increased their dividends every year without exception, even during recessions.

The Dividend Aristocrats have a proven ability to raise their dividends even during economic downturns. We have created a full list of all 69 Dividend Aristocrats, along with important metrics such as price-to-earnings ratios and dividend yields.

You can download an Excel spreadsheet with the full list of Dividend Aristocrats by clicking on the link below:

 

Disclaimer: Sure Dividend is not affiliated with S&P Global in any way. S&P Global owns and maintains The Dividend Aristocrats Index. The information in this article and downloadable spreadsheet is based on Sure Dividend’s own review, summary, and analysis of the S&P 500 Dividend Aristocrats ETF (NOBL) and other sources, and is meant to help individual investors better understand this ETF and the index upon which it is based. None of the information in this article or spreadsheet is official data from S&P Global. Consult S&P Global for official information.

In this article we are going to look more deeply at healthcare distributor Cardinal Health (CAH).

With 38 consecutive years of dividend increases, the company has clearly proven to be a reliable dividend growth stock, which speaks to the resilience of Cardinal Health’s business model.

Business Overview

Cardinal Health, founded in 1971, is one of the “Big 3” drug distribution companies, along with McKesson (MKC) and AmerisourceBergen (ABC). It serves over 24,000 United States pharmacies and more than 90% of the country’s hospitals.

The company has two operating segments: Pharmaceutical and Specialty Solutions and Global Medical Products and Distribution. The Pharmaceutical and Specialty Solutions segment is by far the largest, representing more than 90% of total revenue.

The Pharmaceutical and Specialty Solutions segment distributes branded and generic drugs and consumer products to hospitals and other healthcare providers.

Meanwhile, the Global Medical Products and Distribution segment distributes medical, surgical, and laboratory products to hospitals, surgery centers, clinical laboratories, and other service centers.

On January 30th, 2025, Cardinal Health released results for the second quarter of fiscal year 2025, which ended December 31st, 2024. Revenue declined 3.7% to $55.3 billion.

On an adjusted basis, the company’s posted earnings of $468 million, or $1.93 per share, compared favorably to earnings of $464 million, or $1.89 per share, in the prior year. Revenue results were $330 million ahead of estimates while adjusted earnings-per-share were $0.17 better than expected.

Source: Investor Presentation

For the quarter, Pharmaceutical and Specialty Solutions sales fell 4% to $50.8 billion, but segment profit grew 7% to $495 million. An expiring contract negatively impacted revenue. Excluding this, revenue was up 17% for the period as this segment continues to benefit from higher sales to existing customers and strength in brand and specialty pharmaceuticals.

Revenue for the Global Medical Products and Distribution segment of $3.2 billion was a 1% improvement year-over-year while segment profit of $18 million compared favorably to $11 million last year. Higher demand from existing customers led to an increase in volume for this segment.

Growth Prospects

Cardinal Health provided updated guidance for fiscal year 2025 as well.

Source: Investor Presentation

The company now expects adjusted earnings-per-share in a range of $7.85 to $8.00 for the fiscal year, up from $7.75 to $7.90 and $7.55 to $7.70 previously. At the midpoint, this would be a 5.3% improvement from the prior year.

Cardinal Health has grown earnings-per-share by an average compound rate of 6.2% and 7.8% over the last ten and five years, respectively. Since fiscal 2015, the dividend has grown at 4.0% annually, but this has slowed to 0.9% for the last five years. Moving forward, we anticipate slightly lower growth rates.

We are forecasting 5% intermediate-term earnings growth based on management’s guidance. Our subdued growth rate view could turn out to be conservative, especially given the company’s penchant for share repurchases. Cardinal Health has reduced its share count by more than 3% annually over the last decade. Dividends are projected to grow by just 1% annually through 2030.

Competitive Advantages & Recession Performance

Cardinal Health’s biggest competitive advantage is its distribution capability, which makes it very difficult for competitors to enter the market successfully.

Cardinal Health distributes its products to roughly 90% of U.S. hospitals. It serves more than 29,000 U.S. pharmacies and over 10,000 specialty physician offices and clinics. It also manufactures and distributes more than 50,000 types of Cardinal Health medical products and procedure kits. The company’s home healthcare business serves over 3.4 million patients, with over 46,000 products.

In addition, Cardinal Health operates in a stable industry with high demand. The company should remain steadily profitable, as pharmaceutical products will always be needed to be distributed.

Here’s a look at Cardinal Health’s earnings-per-share during the Great Recession:

• 2007 earnings-per-share of $3.41
• 2008 earnings-per-share of $3.80 (11.4% increase)
• 2009 earnings-per-share of $2.26 (40.5% decline)
• 2010 earnings-per-share of $2.22 (1.8% decline)

While part of this is recession-related, keep in mind that Cardinal Health’s financial results were materially impacted by its 2009 spinoff of CareFusion Corporation. Despite this spinoff, the company’s segment revenues, segment earnings, and dividends continued to grow.

Since people will always need their medications and healthcare products, regardless of the economic climate, Cardinal Health could be considered more recession-resistant than the average company.

Valuation & Expected Returns

Based on anticipated adjusted earnings-per-share of $7.93 for fiscal 2025, and a share price of ~$124, Cardinal Health is currently trading at a P/E ratio of 15.6.

The stock has traded hands with an average P/E ratio of 13.1 times earnings since 2015. In recognition of our lower anticipated growth rate, we have used a multiple of 11 times earnings as a starting place for fair value.

A declining P/E multiple could reduce annual returns by 6.8% per year over the next five years.

In addition to changes in the valuation multiple, future returns will be generated from earnings growth and dividends. We expect Cardinal Health to grow earnings-per-share by 5% per year, primarily from revenue growth and share repurchases.

Finally, the stock has a current dividend yield of 1.6%. While the pace of dividend growth has slowed, the starting yield is above the average yield for the S&P 500 Index. Again, we note the company’s track record of dividend growth.

As a Dividend Aristocrat, Cardinal Health will likely continue raising its dividend each year. Moreover, the dividend appears secure, with a projected dividend payout ratio of approximately 25% for fiscal 2025.

Putting all the pieces together – average growth and dividend yield offset by a meaningful valuation headwind – our expected total return for Cardinal Health is -0.4% per year over the next five years. The negative expected rate of return qualifies Cardinal Health stock as a sell right now.

Final Thoughts

Cardinal Health is a Dividend Aristocrat that has increased its dividend for nearly 40 years. Excluding an expiring contract, the company continues to grow revenue and segment profit improved in both businesses last quarter. Combined with share repurchases, the company should continue to see positive earnings-per-share growth going forward.

High-quality companies like Cardinal Health have withstood difficult periods and will do so again. The company’s history, its dividend history, and its current yield of 1.6% make the stock an interesting choice for income investors. However, total expected returns remain very low, making the stock a sell at the moment.

Additionally, the following Sure Dividend databases contain the most reliable dividend growers in our investment universe:

If you’re looking for stocks with unique dividend characteristics, consider the following Sure Dividend databases:

The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them monthly:

Updated on March 12th, 2025 by Nathan Parsh

Each year, we review all of the Dividend Aristocrats. Attaining membership to this group is difficult: companies must be of a certain size, belong to the S&P 500 Index, and (most importantly) have at least 25 consecutive years of dividend growth.

There are just 69 Dividend Aristocrats, proving the exclusivity of the list.

You can download an Excel spreadsheet of all 69 Dividend Aristocrats, including important financial metrics such as P/E ratios and dividend yields, by clicking the link below:

 

Disclaimer: Sure Dividend is not affiliated with S&P Global in any way. S&P Global owns and maintains The Dividend Aristocrats Index. The information in this article and downloadable spreadsheet is based on Sure Dividend’s own review, summary, and analysis of the S&P 500 Dividend Aristocrats ETF (NOBL) and other sources, and is meant to help individual investors better understand this ETF and the index upon which it is based. None of the information in this article or spreadsheet is official data from S&P Global. Consult S&P Global for official information.

Albemarle Corporation (ALB) joined this exclusive list in 2020. The company is one of the most volatile names among the Dividend Aristocrats, but this makes its dividend growth streak even more impressive.

This article will review Albemarle’s investment prospects.

Business Overview

Albemarle is the largest producer of lithium and second-largest producer of bromine in the world. The two products account for the vast majority 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. Albemarle’s Chile assets offer a very low-cost source of lithium. The company operates in nearly 100 countries.

Beginning January 1st, 2023, the company reorganized into the following segments: Energy Storage, Specialties, and Ketjen.

Albemarle produces annual sales above $5 billion.

Source: Investor Presentation

On February 12th, 2025, Albemarle announced fourth-quarter and full-year 2024 results. For the quarter, revenue declined 48% to $1.23 billion, which was $110 million less than expected. Adjusted earnings-per-share of -$1.09 compared very unfavorably to $1.85 in the prior year, which was $0.42 below estimates.

For the year, revenue declined 44% to $5.4 billion, while adjusted earnings-per-share were—$2.34 compared to $22.25 in 2023. It should be noted that the company had nearly $10 billion in sales in 2023, helping to illustrate that wide swings in the business can occur rapidly.

Lower lithium prices once again negatively impacted results. For the quarter, revenue for Energy Storage decreased 63.2% to $616.8 million. Volume declined 10%, while prices were down 53%.

Specialties revenues were lower by 2.0% to $332.9 million, as a 3% improvement in volume was offset by a price decrease. Ketjen sales of $245 million were down 17.4% from the prior year, as a slight price increase was more than offset by weakening volume.

Albemarle provided an outlook for 2025 as well, with the company expecting revenue in a range of $4.9 billion to $5.2 billion. The company is expected to produce earnings-per-share of -$0.80 in 2025. We believe that Albemarle has earnings power of $3.50.

Growth Prospects

Results are expected to be well above prior numbers, and Albemarle stands to benefit from the increased sales of electric vehicles, as the company’s lithium is used to provide the batteries.

Lithium is expected to be a growth segment over the next five years due to increasing demand for a wide range of applications, including electric vehicles and consumer electronics.

Source: Investor Presentation

Demand for energy storage tends to fluctuate, but the future looks promising for electric vehicles as more consumers consider making that purchase. By 2035, electric vehicles are projected to account for 26% of all cars on the road in the U.S. Battery size is also expected to grow.

With this growth will come a significant increase in demand for lithium.

Due to its leadership positions in lithium and bromine, we believe the company can grow earnings per share at a rate of 7.5% annually for the next five years.

Competitive Advantages & Recession Performance

Despite being among global leaders in multiple businesses, Albemarle isn’t content to rest on its previous success. The company has been active in acquiring businesses that strengthen its market share.

Albemarle is not a recession-proof company. Listed below are the company’s earnings-per-share during and after the last recession:

• 2007 earnings-per-share of $2.41
• 2008 earnings-per-share of $2.40 (0.4% decrease)
• 2009 earnings-per-share of $1.94 (19% increase)
• 2010 earnings-per-share of $3.51 (45% increase)

The specialty chemical business is heavily reliant on customer demand. Lower demand results in lower pricing, which negatively impacts Albemarle’s performance. The company is likely to face a similar type of slowdown during the next recession.

That said, the company has durable competitive advantages. A key competitive advantage is that it ranks as the largest producer of lithium in the world. The metal is used in batteries for electric cars, pharmaceuticals, airplanes, mining, and other applications.

Albemarle is also a top producer of Bromine, which is used in the electronics, construction, and automotive industries. The company possesses a size and scale that others cannot match.

Investors interested in investing in Albemarle should understand that ownership of the stock comes with risks due to the nature of its industry.

Valuation & Expected Returns

Using our expected earnings power figure of $3.50 for the year, ALB shares have a price-to-earnings ratio of 20.9. Over the last decade, Albemarle has traded with an average price-to-earnings ratio of 21.3.

Our multiple target is 18x earnings, which we feel takes into account the demand for the company’s materials and the high volatility of lithium prices. If the stock were to trade with this target by 2030, then valuation would be a 2.9% headwind to annual returns over this time period.

In addition, the dividend yield of 2.2% will add to shareholder returns. The dividend payout is well-covered, as the projected payout ratio for the year is just 46% of our earnings power estimate.

Given the nature of its business, the company has been successful at prudently managing its dividend. Albemarle has raised its dividend for 29 consecutive years.

Therefore, we project that Albemarle will provide a total annual return of 6.6% over the next five years, stemming from 7.5% earnings growth and a starting yield of 2.2% that are offset by a low single-digit headwind from multiple contraction.

Final Thoughts

Reaching Dividend Aristocrat status is no small feat. Albemarle is the dominant player in the lithium industry. The company benefits from low-cost mines and its leadership position in multiple categories.

Albemarle is far from recession-proof and has experienced some significant earnings declines over the last decade, but this makes the company’s dividend growth track record even more impressive.

While the company’s business can be unpredictable, we rate Albemarle’s shares as a hold.

Additionally, the following Sure Dividend databases contain the most reliable dividend growers in our investment universe:

If you’re looking for stocks with unique dividend characteristics, consider the following Sure Dividend databases:

The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them monthly:

Updated on March 12th, 2025 by Nathan Parsh

The Dividend Aristocrats are a group of stocks in the S&P 500 Index with 25+ years of consecutive dividend increases. These companies have high-quality business models that have stood the test of time and have shown a remarkable ability to raise dividends every year regardless of the economy.

We believe the Dividend Aristocrats are some of the highest-quality stocks to buy and hold for the long term. With that in mind, we created a full list of all 69 Dividend Aristocrats.

You can download the full Dividend Aristocrats list, along with important metrics like dividend yields and price-to-earnings ratios, by clicking on the link below:

 

Disclaimer: Sure Dividend is not affiliated with S&P Global in any way. S&P Global owns and maintains The Dividend Aristocrats Index. The information in this article and downloadable spreadsheet is based on Sure Dividend’s own review, summary, and analysis of the S&P 500 Dividend Aristocrats ETF (NOBL) and other sources, and is meant to help individual investors better understand this ETF and the index upon which it is based. None of the information in this article or spreadsheet is official data from S&P Global. Consult S&P Global for official information.

The list of Dividend Aristocrats is diversified across multiple sectors, including consumer goods, financials, industrials, and healthcare.

One group that is surprisingly underrepresented is the utility sector. Only three utility stocks, including Consolidated Edison (ED), are on the list of Dividend Aristocrats.

The fact that just three utilities are on the Dividend Aristocrats list may come as a surprise, especially since utilities are widely regarded as steady dividend stocks. The two other utilities on the list are Atmos Energy (ATO) and NextEra Energy (NEE).

Consolidated Edison is about as consistent a dividend stock as they come. The company has over 100+ years of steady dividends and more than 50 years of annual dividend increases. This article will discuss what makes Consolidated Edison appealing for income investors.

Business Overview

Consolidated Edison is a large-cap utility stock. The company generates approximately $15 billion in annual revenue. The company serves over 3 million electric customers, and another 1 million gas customers, in New York.

It operates electric, gas, and steam transmission businesses.

Source: Investor Presentation

On January 16th, 2025, Consolidated Edison announced that it was raising its quarterly dividend 2.4% to $0.85. This was the company’s 51st annual increase, qualifying Consolidated Edison as a Dividend King.

On February 20th, 2025, Consolidated Edison announced its fourth-quarter and full-year results. Revenue increased 6.5% to $3.7 billion, beating estimates by $36 million.

Adjusted earnings of $340 million, or $0.98 per share, compared to adjusted earnings of $346 million, or $1.00 per share, in the previous year. Adjusted earnings-per-share were $0.02 ahead of expectations.

For the year, revenue of $15.3 billion improved 4% year-over-year. Adjusted earnings of $1.87 billion, or $5.40 per share, compared to adjusted earnings of $1.76 billion, or $5.07 per share, in 2023.

As with prior quarters, higher rate bases for gas and electric customers were the primary contributors to results in the CECONY business, which is accounts for the vast majority of the company’s assets. Average rate base balances are expected to grow by 8.2% annually through 2029 off of 2025 levels. This is up from the company’s prior forecast for growth of 6.4%.

Consolidated Edison is expected to produce earnings-per-share of $5.63 in 2025. The company expects 5% to 7% earnings growth from 2025 through 2029.

Growth Prospects

Earnings growth across the utility industry typically mimics GDP growth, plus a couple of points. Over the next five years, we expect Consolidated Edison to increase earnings-per-share by more than 6% per year, which is in line with the company’s guidance.

New customers and rate increases are Consolidated Edison’s growth drivers. ConEd forecasts 8.2% annual rate base growth through 2029.

Source: Investor Presentation

One potential threat to future growth is high interest rates, which could increase the cost of capital for companies that utilize debt, such as utilities. Fortunately, the market isn’t expecting the Federal Reserve to raise interest rates any further, with the added potential for rate cuts in the future that would lower the company’s cost of capital. Lowering rates helps companies that rely heavily on debt financing, such as utilities.

Consolidated Edison is in strong financial condition. It has an investment-grade credit rating of A-, and a modest capital structure with balanced debt maturities over the next several years.

Competitive Advantages & Recession Performance

Consolidated Edison’s main competitive advantage is the high regulatory hurdles of the utility industry. Electricity and gas services are necessary and vital to society.

As a result, the industry is highly regulated, making it virtually impossible for a new competitor to enter the market. This provides a wide moat for Consolidated Edison.

In addition, the utility business model is highly recession-resistant. While many companies experienced significant earnings declines in 2008 and 2009, Consolidated Edison held up relatively well. Earnings-per-share during the Great Recession are shown below:

• 2007 earnings-per-share of $3.48
• 2008 earnings-per-share of $3.36 (3% decline)
• 2009 earnings-per-share of $3.14 (7% decline)
• 2010 earnings-per-share of $3.47 (11% increase)

Consolidated Edison’s earnings fell in 2008 and 2009, but recovered in 2010. The company still generated healthy profits, even during the worst of the economic downturn. This resilience allowed Consolidated Edison to continue increasing its dividend each year.

The same pattern held up in 2020 when the U.S. economy entered a recession due to the coronavirus pandemic. Last year, ConEd remained highly profitable, which allowed the company to raise its dividend again.

Valuation & Expected Returns

Using the current share price of ~$102 and EPS estimates for 2025, the stock has a price-to-earnings ratio of 18.1. This is just ahead of our fair value estimate of 18.0, which is in line with the 10-year average price-to-earnings ratio for the stock.

As a result, Consolidated Edison shares appear to be slightly overvalued. If the stock valuation retraces to the fair value estimate, the corresponding multiple contractions would reduce annualized returns by 0.1% over the next five years.

Fortunately, the stock could still provide positive returns to shareholders, through earnings growth and dividends. We expect the company to grow earnings by 6% per year over the next five years. In addition, the stock has a current dividend yield of 3.3%.

Utilities like ConEd are prized for their stable dividends and safe payouts. The company’s expected payout ratio for 2025 is 60%, below the 10-year average payout ratio of 67%.

Putting it all together, Consolidated Edison’s total expected returns could look like the following:

• 6% earnings growth
• -0.1% multiple reversion
• 3.3% dividend yield

Consolidated Edison is expected to return 8.6% annually over the next five years. This is a modest rate of return, but not high enough to warrant a buy recommendation at this time.

Income investors may find the yield attractive, as it is meaningfully higher than the yield of the S&P 500 Index.

Final Thoughts

Consolidated Edison can be a valuable holding for income investors, such as retirees, due to its 3%+ dividend yield. The stock offers secure dividend income, and is also a Dividend Aristocrat, meaning it should raise its dividend each year.

Overall, with expected returns of 8.6%, we rate the stock as a hold at today’s current price.

Additionally, the following Sure Dividend databases contain the most reliable dividend growers in our investment universe:

If you’re looking for stocks with unique dividend characteristics, consider the following Sure Dividend databases:

The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them monthly: