To become a “Dividend Aristocrat,” a dividend-paying company must accomplish an incredible feat: consistently increase shareholder dividends every year for at least 20 consecutive years. Companies with this kind of track record tend to attract a lot of investor attention – and furthermore, “track” funds that follow the Dividend Aristocrats Index. must own them. With all this demand for stocks, dividend growth stocks can sometimes become “fully priced,” where there isn’t much upside to analysts.
But we here at ETF Channel took a look at the underlying holdings of the SPDR S&P Dividend ETF (which tracks the S&P High Yield Dividend Aristocrats Index), and found these five dividend growth stocks that actually still have a pretty big upside to the average target price of the analyst. 12 months out. Which means, if the analysts are right, these are five dividend growth stocks that could produce capital gains on top of their growing dividend payments.
In the first table below, we present the five stocks. The recent stock price, average analyst 12-month target price, and percentage upside to reach the analyst target are presented.
Stock | Recent Price | Avg. Analyst 12-Mo. Purpose | % Up to Target |
---|---|---|---|
Perrigo Company plc (Symbol: PRGO) | $30.25 | $41.67 | 37.74% |
Xcel Energy Inc (Symbol: XEL) | $51.02 | $65.45 | 28.29% |
Brady Corp (Symbol: BRC) | $57.28 | $68.50 | 19.59% |
Chesapeake Utilities Corp. (Symbol: CPK) | $105.03 | $121.25 | 15.44% |
S&P Global Inc (Symbol: SPGI) | $428.23 | $478.06 | 11.64% |
The average 12-month analysis goals are only goals for the stock price however, and each of these stocks is expected to pay dividends during that holding period – hence the expected total return if these stocks reach their analyst targets, it is actually the stock price up seen by the analysts plus the dividend yield shareholders can expect. To show that total return potential, we added the current yield to the analyst target price upwards, to arrive at the 12-month total return potential:
Stock | Dividend Yield | % Up to Analyst Target | Understood All in all Return Potential |
---|---|---|---|
Perrigo Company plc (Symbol: PRGO) | 3.65% | 37.74% | 41.39% |
Xcel Energy Inc (Symbol: XEL) | 4.29% | 28.29% | 32.58% |
Brady Corp (Symbol: BRC) | 1.64% | 19.59% | 21.23% |
Chesapeake Utilities Corp. (Symbol: CPK) | 2.25% | 15.44% | 17.69% |
S&P Global Inc (Symbol: SPGI) | 0.85% | 11.64% | 12.49% |
Another consideration with dividend growth stocks is just how much the dividend grows. We looked for the trailing twelve months of dividends that shareholders of each of the top five companies collected, and then also looked for the same number for the prior after twelve months. This gives us a rough measure to see how much the dividend has grown, from one twelve month period to another.
Stock | Previous TTM Dividend | TTM Dividend | % Growth |
---|---|---|---|
Perrigo Company plc (Symbol: PRGO) | $1,053 | $1,095 | 3.99% |
Xcel Energy Inc (Symbol: XEL) | $1,952 | $2.08 | 6.56% |
Brady Corp (Symbol: BRC) | $0.91 | $0.93 | 2.20% |
Chesapeake Utilities Corp. (Symbol: CPK) | $2,085 | $2,305 | 10.55% |
S&P Global Inc (Symbol: SPGI) | $3.45 | $3.61 | 4.64% |
These five stocks are part of our full Dividend Aristocrat List. The average analyst price target data on which this article was based is courtesy of data provided by Zacks Investment Research via Quandl.com.
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Dividend Growth Stocks: 25 Aristocrats »
See also:
• Funds Holding APSA
• IWO market cap history
• LWLG market cap history
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.