Dividend aristocrats can offer steady reliable payments with less volatility than the broader market.
Dividend yielding stocks can offer stability in volatile markets. If you are an investor and are willing to take a little more risk, then dividend yielding stocks can offer reliable payments on top of the possibility of price appreciation of the underlying asset.
Not All Dividend Stocks Are the Same
Beware that not all dividend stocks are created equal. Don’t simply pick stocks with a high yield. Often, dividend stocks with a high yield have an unsustainable payment. For the purpose of our list, I am sticking with Dividend Aristocrats. These are companies who have raised their dividends for the last 25 straight years. While nothing is guaranteed, these are companies that have longevity and reliable steady payout histories.
A Few Stocks to Consider
Here are a few stocks to consider if you are looking for a little more return than cash can provide. Always do your own research before deciding on any investment.
Automatic Data Processing (ADP)
ADP is one of the largest suppliers of human capital management (HCM), offering services such as payroll and benefits administration, HR outsourcing, and software solutions.
The HCM space is a $150 billion dollar industry, and ADP only has 10% of the market. They are currently growing their share by 5% a year. ADP is forecasting over 11% EPS growth, as more businesses embrace outsourcing and automating more non-core functions.
Founded in 1949, ADP is currently trading for $222 per share and has a dividend yield of 2.25%. The dividend was raised by 20% in November of 2022, and the company should be able to continue delivering double digit dividend increases moving forward into the foreseeable future.
Air Products and Chemicals (APD)
APD is an industrial gas company that supplies industrial gases and supplies to various industrial clients.
Half of its revenue comes from plants that produce gas and deliver it to customers via pipelines. Contracts are typically 15 to 20 years which provides a reliable income stream.
Another third of the company’s revenue comes from gasses that are delivered to customers with tanker trucks.
The company’s reliable cash flows, hard to replicate infrastructure, and diversified customer base has resulted in a dividend payment that has been paid out for over 40 consecutive years.
ADP currently trades at $286 per share and has a dividend yield of 2.44%. The dividend was raised by 8% in February of 2023.
Caterpillar (CAT)
CAT is a manufacturer of construction and mining equipment. It also operates a financing division and a segment that makes tools and fluids for its machinery.
CAT is divided into three primary business segments including construction industries, resource industries, and energy and transportation.
It is currently trading at $228 per share and has a dividend yield of 2.10%. It’s dividend is considered very safe, and it has been increased for 29 consecutive years.
Final Thoughts
Dividend yielding stocks can offer stability in volatile markets. If you are looking for some stability in volatile times, then dividend aristocrats can offer consistent and reliable payouts and less volatile share prices.
As always, do your research before investing in any stock.
Read More:
5 Dividend Paying Stocks Under $10
Understanding the Power of Dividend Kings.
Are There Any Stocks Under $3 That Pay a Dividend?
Writer and Investor. Based in the Pittsburgh, PA area, Brian holds full-time employment as a Warehouse Manager for an electronics firm. Brian enjoys wealth building, investing, gardening and the great outdoors. Brian holds a B.A. in Environmental Studies from the University of Pittsburgh and an MBA from Robert Morris University.