Queens’ famous 1977 rock anthem “We Are The Champions” was once considered by scientists to be the sexiest song in the history of popular music. To this day, it is often heard during coronation moments in sports stadiums and in exciting television commercials.
In the investment world, Freddie Mercury’s recognizable music can also be applied to the achievements of dividend champions. These are companies that have increased annual dividends for at least 25 consecutive years. During the court less than 50 Year Dividend KingsThis collection of nearly 130 stocks is a great place for income investors to find high-quality dividend payers.
The current dividend champions have an average yield of 2.4%, compared to 1.7% for the S&P 500. More importantly, these companies have the financial strength to support extensive dividend histories — and future dividend hikes.
Unfortunately, there are no ETFs that mimic the dividend champs yet. Creating a custom portfolio that includes all names is possible but cost-prohibitive.
An alternative way to gain exposure to these dividend growers is to invest in a few companies in the sector for diversification. But how to narrow down the choices?
Bullish Wall Street Sense is a good place to start. These are some names of most preferred research institutes.
What makes Linde a good long-term investment?
Based in England Linde plc (NYSE: LIN) It has raised its dividend for 29 consecutive years. In 2018, it merged with Praxair to become the world’s largest industrial gas producer. The company sells to a variety of industries, from chemicals and manufacturing to food and healthcare. A A diversified customer base Provides a steady source of demand that translates into stable liquidity throughout the economic cycle.
It’s Linde’s strong foothold in various defense markets that allows it to generate reliable revenue even as the broader economy slows. Third-quarter revenue rose 15% to $8.8 billion, and adjusted EPS rose 14% to $3.10. Both figures beat expectations and gave management confidence to raise its full-year guidance.
Linde is rapidly advancing toward its January 2022 all-time high of $352.18, but it will likely move to a new record. Ten analyst price targets fall within the $360 to $380 range. Besides a solid balance sheet and steady dividend, Wall Street is bullish on Linde’s $13 billion project backlog, most of which comes from blue-chip clients.
Which safety stocks does Wall Street prefer?
Compared to competitor Raytheon, General Dynamics Corporation (NYSE: GD) The stock is supportive of sell-side analysts, both in terms of valuation and upside. Citigroup began coverage last week Defense contractor With a Buy rating and a $298 target, it indicates a 20% upside. That’s saying a lot considering the stock is up 19% already this year, following a 40% advance in 2021.
General Dynamics excels because it has a leading position in several aerospace and defense markets that are experiencing solid growth. Third-quarter earnings were better than expected on demand from Gulf Airlines and US Navy in the 20th quarter due to more business with General Dynamics. Contracts for the Virginia-class attack submarine and the Columbia-class ballistic-missile submarine represent an outstanding $126 billion.
The quarterly dividend was recently increased by 6% to extend General Dynamics’ dividend hike to 26 years. This makes it a new member of the Dividend Champions, but it will be around for a while. Management’s projection of modest revenue growth and margin expansion coupled with a 36% payout ratio will further increase the dividend.
Is Stryker a Good Dividend Stock?
Medical device manufacturer Stryker Corporation (NYSE: SYK) 28-year dividend increase streak. This comes on the heels of a solid third quarter performance highlighted by accelerated organic sales growth led by MetSerg and the Neurotechnology division. Need for endoscopy, neurocranial and others Medical products It was particularly strong in the Asia-Pacific region.
It is an encouraging development for Stryker to have a second strong growth contributor with its core orthopedics business. The stock has been weighed down as increased operating costs and foreign exchange effects dampened profitability. But with election practice volumes on the rise, many new product launches and margin pressures expected to ease, 2023 is shaping up to be a great year.
After minimal bottom-line improvement expected this year, Wall Street is forecasting 8% EPS growth next year. This means Stryker trades at 25x next year’s earnings, which sets it up for significant multiple expansion above its five-year average P/E of 40x. The dividend champ has another compelling streak heading into the new year — its first three-month winning streak since August 2021.
Before you consider Linde, you should ask yourself this.
MarketBeat tracks Wall Street’s top-rated and top-performing research analysts and the stocks they recommend to clients on a daily basis. As MarketBeat identified Five stocks The best analysts quietly whisper to their clients, buy now before the broader market catches up…and Linde is off the list.
Although Linde currently has a “moderate buy” rating among analysts, top analysts believe these five stocks are great buys.