- Investors seek security amid market uncertainty.
- This is especially true for those investing for retirement.
- Discover seven dividend aristocrats for reliable passive income.
Markets feel more uncertain right now. Geopolitical tensions remain high, and the global economy faces several unclear risks. In this environment, many investors are looking for stability, especially those saving for retirement.
That is one reason dividend stocks are gaining attention. Companies that pay regular dividends can help cushion portfolios during volatile periods and provide steady income over time.
Within this space, a select group stands out. These are known as Dividend Aristocrats, companies that have raised their dividends every year for at least 25 straight years.
What Defines a Dividend Aristocrat?
To raise dividends consistently for decades, a company needs a strong and resilient foundation:
- Recurring and strong cash flow
- Sustainable competitive advantage
- A healthy balance sheet and controlled debt
- Ability to weather multiple economic cycles
These companies also tend to operate in stable, established sectors such as consumer staples, healthcare, and industrials. They usually have a long history of disciplined capital allocation, which helps them navigate economic slowdowns and short-term shocks with greater stability.
Why Dividend Aristocrats Fit Well in a Retirement Portfolio
For retirement investors, the focus usually comes down to two goals: steady income and long term capital protection. Dividend Aristocrats support both.
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Income that grows over time: Unlike fixed-rate bonds, these companies’ dividends are expected to increase. This helps offset monetary erosion and gradually improve retirees’ purchasing power.
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Increased historical resilience: Companies that have been able to increase their dividends for 25 years or more have generally demonstrated their resilience during periods of crisis, recession, or high volatility. This relative stability can help cushion the impact of stock market corrections.
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A sign of financial quality: Regular dividend increases are a strong commitment to shareholders. They reflect management’s confidence in the visibility of future earnings and disciplined capital allocation.
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Attractive total return potential: In the long term, a significant portion of stock market performance comes from reinvesting dividends. Dividend aristocrats thus combine yield, gradual growth in distributions, and potential price appreciation.
That said, Dividend Aristocrats are not automatic buys. Some offer relatively low yields, while others trade at stretched valuations, which can increase the risk of capital losses if prices correct.
In Search of the Best Dividend Aristocrats
To narrow the field, we used the Investing.com stock screener to identify companies that meet the following criteria:
- Dividends have been growing for at least 25 years
- Market capitalization of more than $1 billion
- Dividend yield greater than 3.5%
- Positive potential according to InvestingPro Fair Value (summary of valuation models)
This search identified seven opportunities:
Specifically, these stocks have been paying dividends for 31 to 56 years, with increasing payments over the last 27 to 55 consecutive years.
The dividend yield on these stocks ranges from 3.6% to 6.1%. Finally, InvestingPro’s Fair Value assigns some of these stocks solid upside potential, with one of them undervalued by nearly 42%.
Finally, note that there are many other methods for finding the best dividend stocks, including preconfigured searches, which allow you to search for stocks that meet a set of criteria with just one click.
These screens cover themes such as value, growth, quality, and defensive strategies, helping investors with different goals find stocks that match their approach.
Please note: Some searches are reserved for InvestingPro subscribers with a PRO+ plan.
Below are the key ways an InvestingPro subscription can enhance your stock market investing performance:
- ProPicks AI: AI-managed stock picks every month, with several picks that have already taken off this month and in the long term.
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- Fair Value: This feature aggregates 17 institutional-grade valuation models to cut through the noise and show you which stocks are overhyped, undervalued, or fairly priced.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belong to the investor. We also do not provide any investment advisory services.