That said, shares are quite expensive at the moment. These 57 are large, US companies that have historically provided (slightly) better performance and (slightly) lower volatility than the S&P 500 as a whole. This group represents some of the largest companies within the S&P 500. The fact that there are only two utilities on the list may come as a surprise, especially since utilities are widely regarded as being steady dividend stocks. The company also expects earnings per share growth to remain strong (6%-8% annualized) through 2024. Realty Income has done this by building a broadly diversified portfolio of well located real estate with many high quality tenants. Final ThoughtsYou can also watch the following video for more information on the Dividend Aristocrats and see a table of the Dividend Aristocrats below. In return, the dividend investors receive a high dividend yield above 5% and a positive EPS growth. AT&T, founded in 1983, is the largest communications company in the world, operating in four distinct business units: Debt reduction is and should be a priority for AT&T over the next three years. In addition, the stock has a current dividend yield of 1.8%. Operating free cash flow and free cash flow are 2 important metrics for a dividend stock. You can invest in dividend aristocrats on most traditional and online brokerages. We have compiled a list of 150+ REITs, that are worthy of further consideration, based on their dividend yields and dividend growth potential. Realty Income was founded in 1969 and is headquartered in San Diego. Based on our fair value estimate of 12, we view this stock as undervalued right now and with upside potential. In December, AT&T announced another dividend increase. It is now one of only two U.S. REITs to sport both an A- credit rating and boast the dividend growth track record of being a Dividend Aristocrat. We expect the company to grow earnings by 6% per year over the next five years. International Dividend Portfolio dropped -1.17% after +5.76% last month, Dividend Retirement Portfolio -0.89% in September, European Dividend Aristocrats Performance: September 2020, Dividend Kings Performance September 2020, Dividend Aristocrats Performance: September 2020, must have increased dividends every year for at least 25 consecutive years, Liquidity at least USD 5 million (average daily value traded), Diversification, at least 40 constituents and no sector allocation above 30%, 2007 adjusted earnings-per-share of $2.76, 2008 adjusted earnings-per-share of $2.16 (22% decline), 2009 adjusted earnings-per-share of $2.12 (1.8% decline), 2010 adjusted earnings-per-share of $2.29 (8% increase), For the European focused investors there is also the list of. Atmos Energy is expected to earn $4.65 this year. The quality and value unlocked through this large deal reflects the power of Realty Income’s broad network and attractive cost of capital. To conclude, AT&T has a secure dividend payout with room for annual increases in the low single-digit range. The company also has exposure to industrial, office, and agricultural tenants, though retail does make up the vast majority (82.7%) of its rental income. In 1923, Archer-Daniels Linseed Company acquired Midland Linseed Products Company, which created Archer Daniels Midland. There are currently 64 Dividend Aristocrats. Thanks for reading this article. We believe the Dividend Aristocrats are among the highest-quality dividend stocks to buy and hold for the long-term. Sector Overview 4. Dividend Aristocrats Analysis (The Dividend Aristocrats In Focus Series) 5. AT&T’s forward P/E ratio of 10.6 is well below its 5-year average of 12.4 and the Communications sector average of 21.6. One benefit of operating in a regulated industry is that utilities are permitted to raise rates on a regular basis, which virtually assures a steady level of growth. One group that is surprisingly under-represented, is the utility sector. While long-term conservative dividend growth investors may want to hold on to it, we overall rate it a sell simply due to valuation. AT&T has generated positive free cash flow in each of the last 10 years, which is a sign that AT&T’s business has consistently earned enough cash to cover its spending needs, giving more flexibility to maintain its dividend over time. There are only two utility stocks on the list of Dividend Aristocrats: Consolidated Edison (ED) and 2020 addition Atmos Energy (ATO). The primary risk facing the company is its ability to achieve timely and positive regulatory rate adjustments. The company has a projected 2020 payout ratio of ~50%, which indicates a sustainable dividend. At the same time, Real Estate Investment Trusts (REITs) seem like natural fits for the Dividend Aristocrats. Approximately 96% of its rent comes from e-commerce and recession resistant tenants, making it a good bond substitute. Based on our expected 2019 adjusted FFO-per-share of $3.32, Realty Income’s stock trades for a price-to-FFO ratio of 24.1. There are only two utility stocks on the list of Dividend Aristocrats: Consolidated Edison (ED) and 2020 addition Atmos Energy (ATO). REITs are required to distribute at least 90% of their earnings to shareholders, which leads to steady dividend growth for the asset class, provided earnings grow over time. Realty Income’s future growth will be fueled by its proven, highly scalable business model, access to significant low-cost capital, and extensive network of relationships with a diverse array of tenants. Therefore, future returns will be comprised of a mix of FFO growth (~5% annually) and dividends (current yield is ~3.5%), though we expect this will be largely offset by multiple contraction. Today, it is an agricultural giant. Realty Income also benefits from a favorable economic backdrop, with high occupancy rates, and the ability to raise rents over time. With a very low expected rate of return, Atmos Energy gets a sell recommendation from Sure Dividend. Realty Income has increased its dividend for 25 years in a row, enabling it to recently join the list of Dividend Aristocrats. Putting it all together, Atmos Energy’s total expected returns could look like the following: Added up, Atmos Energy is expected to generate negative annualized total returns over the next five years, making the stock unattractive for investors interested in total returns. This excludes a potential positive impact from changes in the stock valuation, which could happen when AT&T returns to its 5-year average P/E ratio of 12.4. Dividend investors considering AT&T must be aware and accept the risks that come with current debt levels and the successful execution of the deleveraging plan presented by the management.
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