FactSet Research Systems, an American financial data and software company, is now a $16 billion (by market cap) financial data powerhouse. The company has already increased its dividend for 24 consecutive years with a 10-year dividend growth rate of 10.9%. FactSet has moved its revenue from $920 million in FY 2014 to $2.1 billion in FY 2023, a compound annual growth rate of 9.6%.
REITs have performed well recently due to indications of interest rate hikes, but inflation uncertainties may lead investors to diversify into less interest rate-sensitive assets. Emerson Electric is a global leader in automation equipment and services, focusing on high-growth areas like sustainability and energy transition, with strong profitability and growth opportunities. EMR has shown better downside protection compared to real estate over the past 3 years, and carries a strong project pipeline.
McDonald's, an American multinational fast-food restaurant chain, is now a $193 billion (by market cap) QSR monster. McDonald's has increased its dividend for 48 consecutive years, with a 10-year dividend growth rate of 7.2%. McDonald's revenue has actually slightly decreased from $27.4 billion in FY 2014 to $25.5 billion in FY 2023.
Market volatility has become extreme, but smart investors know that great stock returns are created by volatility. Missing the market's best 60 days over the last 20 years resulted in 75% inflation-adjusted losses, worse than the Great Depression loss of 67%. Dividend aristocrats are some of the world's most dependable dividend blue chips. And despite aristocrats being flat in this downturn, plenty of bargains are available.
With the first rate cut on the horizon, investors are increasingly looking toward sectors that could benefit the most from lower interest rates. Real estate investment trusts are a prime example as their operations are typically heavily leveraged and highly dependent on the current cost of money.
Abbott Laboratories is a Dividend Aristocrat more than twice over. The healthcare juggernaut exceeded analysts' expectations for both sales and adjusted diluted EPS during the second quarter. Abbott Laboratories' $7.5 billion net debt balance is modest for its size.
Community Financial System has a history of increasing dividends for 32 years, conservative management, and sustainable dividend yield, making it a reliable choice for investors. But it is still a bit expensive. Fear of recession prompts investors to seek passive income, with some regional banks offering high dividend yields. CBU stands out as a strong bank with low-cost deposits and a focus on consumer loans.
As with diamonds, there is a Dividend Aristocrat for pretty much every need. A Dividend Aristocrat is a member of the S&P 500 that has increased its dividends annually for 25 years or more.
McCormick & Company is a leader in the spices and condiments market, showing potential for future growth. Revenue has been steadily increasing, with the flavor solutions segment growing faster but the consumer segment having better margins. Dividend aristocrat McCormick offers a safe and growing dividend with the potential for future dividend increases.
British American Tobacco has seen a 25% rally in recent months, with a 10% rally since the market dip began on July 16. BTI began this rally at the same a 47% historical discount it had in 2000, delivering 24% annual returns for almost two decades. BTI just delivered solid earnings, and management reiterated and even raised long-term growth guidance to 5% to 7% EPS growth and a total return guidance of 13.6% to 15.6%.
Stocks keep setting record highs, with valuations becoming steadily more challenging. But even at record highs, there are plenty of blue-chip bargains to buy. Free cash flow yield is a gold standard of valuation. It combines yield and quality and, if combined with growth, creates the ultimate PEG ratio, popularized by Peter Lynch. This article highlights 10 high-yield dividend aristocrats with the lowest PEG ratios, 6X better than the aristocrats and 3X better than US stocks.
PepsiCo NASDAQ: PEP shares have struggled with traction for the last two years as inflation, pricing pressure, consumer pushback, and economic headwinds impact results, but those days will soon end. The latest CPI report shows inflation cooling faster than expected and has the FOMC on track to make at least one interest rate cut this year.