Up to date on December nineteenth, 2022 by Bob Ciura
DRIP stands for Dividend Reinvestment Plan. When an investor is enrolled in DRIP shares, it signifies that incoming dividend funds are used to buy extra shares of the issuing firm – robotically.
Many companies provide DRIPs that require the traders to pay charges. Clearly, paying charges is a detrimental for traders. As a normal rule, traders are higher off avoiding DRIP shares that cost charges.
Luckily, many corporations provide no-fee DRIP shares. These permit traders to make use of their hard-earned dividends to construct even bigger positions of their favourite high-quality, dividend-paying corporations – without spending a dime.
Dividend Aristocrats are the proper type of DRIP shares. Dividend Aristocrats are elite corporations that fulfill the next:
- Are within the S&P 500 Index
- Have 25+ consecutive years of dividend will increase
- Meet sure minimal dimension & liquidity necessities
You may obtain an Excel spreadsheet with the total checklist of all 65 Dividend Aristocrats (with extra monetary metrics corresponding to price-to-earnings ratios and dividend yields) by clicking the hyperlink under:
Take into consideration the highly effective mixture of DRIPs and Dividend Aristocrats…
You’re reinvesting dividends into an organization that pays larger dividends yearly. Which means yearly you get extra shares – and every share is paying you extra dividend earnings than the earlier yr.
This makes a strong (and cost-effective) compounding machine.
This text takes a have a look at the highest 15 Dividend Aristocrats which can be no-fee DRIP shares, ranked so as of anticipated complete returns from lowest to highest.
The up to date checklist for 2022 contains our high 15 Dividend Aristocrats, ranked by anticipated returns in line with the Sure Analysis Research Database, that supply no-fee DRIPs to shareholders.
You may skip to evaluation of any particular person Dividend Aristocrat under:
Moreover, please see the video under for extra protection.
No-Price DRIP Dividend Aristocrat #15: Exxon Mobil (XOM)
- 5-year anticipated annual returns: -0.3%
Exxon Mobil is a diversified vitality large with a market capitalization above $300 billion. In 2021, the upstream section generated 62% of the full earnings of Exxon whereas the downstream and chemical segments generated 8% and 30% of the full earnings, respectively.
In late October, Exxon reported (10/28/22) monetary outcomes for the third quarter of fiscal 2022. Its manufacturing within the Permian reached an all-time excessive however its complete manufacturing remained flat sequentially. Oil costs dipped 12% sequentially however fuel costs skyrocketed and refining margins improved as a result of sanctions of western international locations on Russia for its invasion in Ukraine. Consequently, Exxon grew its earnings-per-share 7% sequentially, from $4.14 to an all-time excessive of $4.45, and exceeded the analysts’ consensus by $0.65.
Furthermore, Exxon raised its dividend by 3% and thus it prolonged its dividend progress streak to 40 years. It additionally has a $30 billion share repurchase program for 2022-2023.
Click here to download our most recent Sure Analysis report on Exxon Mobil (preview of web page 1 of three proven under):
No-Price DRIP Dividend Aristocrat #14: Aflac Inc. (AFL)
- 5-year anticipated annual returns: 1.3%
Aflac was shaped in 1955, when three brothers — John, Paul, and Invoice Amos — got here up with the concept to promote insurance coverage merchandise that paid money if a policyholder received sick or injured. Within the mid-Twentieth century, office accidents had been widespread, with no insurance coverage product on the time to cowl this danger.
Associated: Detailed analysis on the best insurance stocks.
Right this moment, Aflac has a variety of product choices, a few of which embrace accident, short-term incapacity, vital sickness, hospital indemnity, dental, imaginative and prescient, and life insurance coverage.
The corporate focuses on supplemental insurance coverage, which pays out to coverage holders if they’re sick or injured, and can’t work. Aflac operates within the U.S. and Japan, with Japan accounting for about 70% of the corporate’s income. Due to this, traders are uncovered to forex danger.
Typically phrases, Aflac has two sources of earnings: earnings from premiums and earnings from investments. Taking the objects collectively, along with an energetic share repurchase program, affordable expectations could be for 4% annual earnings-per-share progress over the subsequent 5 years.
Click here to download our most recent Sure Analysis report on Aflac (preview of web page 1 of three proven under):
No-Price DRIP Dividend Aristocrat #13: AbbVie Inc. (ABBV)
- 5-year anticipated annual returns: 3.6%
AbbVie Inc. is a pharmaceutical firm spun off by Abbott Laboratories (ABT) in 2013. Its most necessary product is Humira, which is now going through biosimilar competitors in Europe, which has had a noticeable impression on the corporate. Humira will lose patent safety within the U.S. in 2023.
Even so, AbbVie stays a large within the healthcare sector, with a big and diversified product portfolio.
AbbVie reported its third quarter earnings outcomes on October 28. Revenues of $14.8 billion which was 3% greater than AbbVie’s revenues through the earlier yr’s quarter. Income missed consensus by $130 million. Revenues had been positively impacted by compelling progress from a few of its newer medicine, together with Skyrizi and Rinvoq, whereas Humira remained AbbVie’s largest drug when it comes to general income contribution.
AbbVie earned $3.66 per share through the third quarter, which was 29% greater than the corporate’s earnings-per-share through the earlier yr’s quarter. AbbVie’s earnings-per-share beat the consensus analyst estimate by $0.10. AbbVie’s steerage for 2022’s adjusted earnings-per-share was lowered barely since our final replace, the corporate now expects to earn $13.76 – $13.96 on a per-share foundation this yr.
Click here to download our most recent Sure Analysis report on AbbVie (preview of web page 1 of three proven under):
No-Price DRIP Dividend Aristocrat #12: Abbott Laboratories (ABT)
- 5-year anticipated annual returns: 5.1%
Abbott Laboratories is among the largest medical home equipment & tools producers on the earth, comprised of 4 segments: Diet, Diagnostics, Established Prescribed drugs and Medical Gadgets.
Abbott has elevated its dividend for 50 years. Abbott has a big and diversified product portfolio, with management throughout a number of classes.
On October nineteenth, 2022, Abbott Laboratories reported third quarter outcomes for the interval ending September thirtieth, 2022. For the quarter, the corporate generated $10.4 billion in gross sales (61% outdoors of the U.S.), representing a 4.8% lower in comparison with the second quarter of 2021. Adjusted earnings-per-share of $1.15 in contrast unfavorably to $1.40 within the prior yr. Income was $750 million higher than anticipated whereas adjusted earnings-per-share topped estimates by $0.21.
Click here to download our most recent Sure Analysis report on Abbott Laboratories (preview of web page 1 of three proven under):
No-Price DRIP Dividend Aristocrat #11: Sherwin-Williams (SHW)
- 5-year anticipated annual returns: 5.1%
Sherwin-Williams, based in 1866, is North America’s largest producer of paints and coatings.
The corporate distributes its merchandise by means of wholesalers in addition to retail shops (together with a sequence of greater than 4,900 company-operated shops and amenities) to 120 international locations below the Sherwin-Williams title.
The corporate additionally manufactures Dutch Boy, Pratt & Lambert, Minwax, Thompson’s Waterseal, Krylon, Valspar (acquired in 2017), and different manufacturers.
Supply: Investor Presentation
On October twenty fifth, 2022, Sherwin-Williams launched Q3 2022 outcomes for the interval ending September thirtieth, 2022. For the quarter, Sherwin-Williams generated income of $6.05 billion, a 17.5% enhance in comparison with Q3 2021. This was pushed by a 21.4% enhance within the Americas Group, a 13.7% enhance within the Efficiency Coatings Group and an 8.5% enhance within the Shopper Manufacturers Group. Adjusted earnings-per-share equaled $2.83 versus $2.09 in Q3 2021.
Sherwin-Williams additionally up to date its 2022 steerage, anticipating low-double digit gross sales progress and $8.50 to $8.80 in adjusted earnings-per-share.
Click here to download our most recent Sure Analysis report on Sherwin-Williams (preview of web page 1 of three proven under):
No-Price DRIP Dividend Aristocrat #10: Emerson Electrical (EMR)
- 5-year anticipated annual returns: 5.6%
Emerson Electric is a perfect candidate for a no-fee DRIP program, as the corporate has elevated its dividend for over 60 years in a row.
Emerson Electrical was based in Missouri in 1890 and since that point, it has developed by means of natural progress, in addition to strategic acquisitions and divestitures, from a regional producer of electrical motors and followers right into a $49 billion diversified international chief in expertise and engineering. Its international buyer base and numerous product and repair choices afford it about $20 billion in annual income. The corporate has elevated its dividend for 65 years in a row.
Emerson reported fourth quarter and full-year earnings on October thirty first, 2022, and outcomes had been higher than anticipated. The corporate posted adjusted earnings-per-share of $1.53, which was 14 cents higher than anticipated. Income was up greater than 8% to $5.36 billion, and was $30 million higher than anticipated.
Emerson’s outcomes had been overshadowed by some very massive portfolio strikes. The corporate bought its InSinkErator meals waste disposer enterprise for $3 billion to Whirlpool Company (WHR). As well as, Emerson is promoting a 55% stake in its Local weather Applied sciences enterprise to Blackstone for $9.5 billion, valuing the enterprise at $14 billion. That features about $5 billion in annual gross sales.
Emerson beforehand introduced its divestiture of Them-O-Disc earlier this yr, bringing complete proceeds from divestitures to about $18 billion in money for this yr.
Click here to download our most recent Sure Analysis report on EMR (preview of web page 1 of three proven under):
No-Price DRIP Dividend Aristocrat #9: Illinois Device Works (ITW)
- 5-year anticipated annual returns: 5.7%
Illinois Device Works is a diversified multi-industrial producer with seven distinctive working segments: Automotive, Meals Tools, Take a look at & Measurement, Welding, Polymers & Fluids, Building Merchandise and Specialty Merchandise.
On October twenty fifth, 2022, Illinois Device Works reported third quarter 2022 outcomes for the interval ending September thirtieth, 2022. For the quarter, income got here in at $4.0 billion, up 13% year-over-year. Gross sales had been up 25% within the Automotive OEM section, the biggest out of the corporate’s seven segments.
Supply: Investor Presentation
5 out of those seven segments had double-digit natural gross sales progress within the quarter. Internet earnings equaled $727 million or $2.35 per share in comparison with $639 million or $2.02 per share in Q3 2021.
Illinois Device Works up to date its 2022 steerage and now sees full-year GAAP EPS to be between $9.45 and $9.55.
Illinois Device Works has a superb dividend progress historical past. Its payout ratio was comparatively excessive over the past monetary disaster, however the firm was not compelled to chop the payout. Right this moment the dividend payout ratio sits at 53% of anticipated earnings, above the corporate’s long-term goal, that means that future dividend progress could path earnings progress.
Click here to download our most recent Sure Analysis report on ITW (preview of web page 1 of three proven under):
No-Price DRIP Dividend Aristocrat #8: Federal Realty Funding Belief (FRT)
- 5-year anticipated annual returns: 6.1%
Federal Realty was based in 1962. As a Real Estate Investment Trust, Federal Realty’s enterprise mannequin is to personal and lease out actual property properties. It makes use of a good portion of its rental earnings, in addition to exterior financing, to amass new properties. This helps create a “snow-ball” impact of rising earnings over time.
Federal Realty primarily owns purchasing facilities. Nonetheless, it additionally operates in redevelopment of multi-purpose properties together with retail, residences, and condominiums. The portfolio is very diversified when it comes to tenant base.
Supply: Investor Presentation
On November third, 2022, Federal Realty reported Q3 outcomes. It generated funds from operations per diluted share of $1.59 for the quarter in comparison with $1.51 for the third quarter 2021. FRT additionally generated comparable property working earnings progress of three.7% for the third quarter and eight.8% year-to-date.
It additionally achieved continued report ranges of leasing with 119 signed leases for 562,859 sq. toes of comparable area within the third quarter, the very best third quarter quantity on report. Federal Realty’s portfolio was 92.1% occupied and 94.3% leased, representing year-over-year will increase of 190 foundation factors and 150 foundation factors, respectively and 10 foundation level and 20 foundation level will increase, respectively quarter-over-quarter.
Click here to download our most recent Sure Analysis report on Federal Realty (preview of web page 1 of three proven under):
No-Price DRIP Dividend Aristocrat #7: Hormel Meals (HRL)
- 5-year anticipated annual returns: 6.5%
Hormel Foods was based again in 1891 in Minnesota. Since that point, the corporate has grown right into a juggernaut within the meals merchandise business with almost $10 billion in annual income.
Hormel has stored with its core competency as a processor of meat merchandise for properly over 100 years, however has additionally grown into different enterprise strains by means of acquisitions.
Hormel has a big portfolio of category-leading manufacturers. Only a few of its high manufacturers embrace embrace Skippy, SPAM, Applegate, Justin’s, and greater than 30 others.
Hormel reported fourth quarter and full-year earnings on November thirtieth, 2022, and outcomes had been considerably blended. Earnings-per-share beat expectations by two cents, coming in at 51 cents. Income, nonetheless, fell 5% to $3.3 billion, and missed estimates by $50 million.
Natural gross sales had been up 2%, excluding the impression of the extra week that was current within the prior yr’s fourth quarter. Working earnings was $367 million, up 3%. Working margin was 11.2%, which was 80 foundation factors larger than final yr’s This autumn. Earnings-per-share had been flat at 51 cents.
Money circulate from operations got here to $372 million, down 34% year-over-year. The corporate stated it expects to see risky prices and gross sales for the foreseeable future given provide chain constraints and inflationary pressures.
Click here to download our most recent Sure Analysis report on Hormel (preview of web page 1 of three proven under):
No-Price DRIP Dividend Aristocrat #6: S&P World Inc. (SPGI)
- 5-year anticipated annual returns: 7.6%
S&P Global is a worldwide supplier of economic providers and enterprise data. The corporate has generated robust progress over the previous a number of years. It has elevated its dividend for 49 consecutive years.
S&P reported third quarter earnings on October twenty seventh, 2022, and outcomes had been blended. Adjusted earnings-per-share got here to $2.93, which was 13 cents higher than anticipated. Income, nonetheless, regardless of rising 37% year-over-year to $2.86 billion, was $60 million gentle towards estimates. Adjusted working revenue declined 200bps to 46.0% of income from the year-ago interval.
The corporate has accomplished $11 billion of its $12 billion accelerated share repurchase program put in place earlier this yr, and expects to finish the ultimate $1 billion in December. Adjusted income fell 8% year-over-year, and declined 6% on a continuing forex foundation. The corporate is struggling as charges have risen, as that leads to fewer debt issuances from world wide. On an adjusted foundation, earnings-per-share declined from $3.05 to $2.93.
Click here to download our most recent Sure Analysis report on SPGI (preview of web page 1 of three proven under):
No-Price DRIP Dividend Aristocrat #5: Johnson & Johnson (JNJ)
- 5-year anticipated annual returns: 7.8%
Johnson & Johnson is a diversified well being care firm and a frontrunner within the space of prescribed drugs (~49% of gross sales), medical units (~34% of gross sales) and client merchandise (~17% of gross sales). The corporate has annual gross sales in extra of $93 billion.
The corporate’s most up-to-date earnings report was delivered on October 18th, 2022, for the third quarter. Outcomes had been higher than anticipated on each income and earnings.
Supply: Investor Presentation
For the third quarter, adjusted earnings-per-share got here to $2.55, which was six cents forward of expectations, however in contrast unfavorably to $2.60 within the prior yr. Income was $23.8 billion, up 2% year-over-year and $360 million forward of estimates.
Johnson & Johnson narrowed its earnings per share steerage to $10.02 to $10.07 (in comparison with $10.00 to $10.00 beforehand) and lowered its income steerage to be between $93.0 billion and $93.5 billion ($93.3 billion to $94.3 billion beforehand). The steerage revision was a results of the strengthening U.S. greenback.
Johnson & Johnson’s key aggressive benefit is the dimensions and scale of its enterprise. The corporate is a worldwide chief in a number of healthcare classes. Johnson & Johnson’s diversification permits it to proceed to develop even when one of many segments is underperforming.
The corporate has elevated its dividend for 60 consecutive years, making it a Dividend King. The inventory is owned by many well-known cash managers. For instance, J&J is a Kevin O’Leary dividend stock.
Click here to download our most recent Sure Analysis report on JNJ (preview of web page 1 of three proven under):
No-Price DRIP Dividend Aristocrat #4: A.O. Smith (AOS)
- 5-year anticipated annual returns: 9.1%
A.O. Smith is a number one producer of residential and business water heaters, boilers and water therapy merchandise. A.O. Smith generates nearly all of its gross sales in North America, with the rest from the remainder of the world.It has category-leading manufacturers throughout its varied geographic markets.
Supply: Investor Presentation
A.O. Smith is among the top water stocks.
A.O. Smith reported its third quarter earnings outcomes on October 27. The corporate generated revenues of $870 million through the quarter, which represents a decline of 4% in comparison with the prior yr’s quarter. Revenues had been flat in North America and declined by 13% in the remainder of the world, as a result of forex fee actions and COVID-related shutdowns in China as properly.
A.O. Smith generated earnings-per-share of $0.69 through the third quarter, which was down 15% on a yr over yr foundation. This may largely be defined by the mix of decrease revenues and a few margin headwinds from inflation and detrimental working leverage. A.O. Smith has reaffirmed its steerage for 2022.
The corporate is forecasting earnings-per-share in a spread of $3.05 and $3.15. On the midpoint of the steerage vary, A.O. Smith’s earnings-per-share would develop by 3% for 2022.
Click here to download our most recent Sure Analysis report on A.O. Smith (preview of web page 1 of three proven under):
No-Price DRIP Dividend Aristocrat #3: Realty Revenue (O)
- 5-year anticipated annual returns: 9.9%
Realty Income is a retail-focused REIT that owns greater than 6,500 properties. It owns retail properties that aren’t a part of a wider retail improvement (corresponding to a mall), however as a substitute are standalone properties.
Which means the properties are viable for a lot of completely different tenants, together with authorities providers, healthcare providers, and leisure.
Supply: Investor Presentation
The corporate’s lengthy historical past of dividend funds and will increase is because of its high-quality enterprise mannequin and diversified property portfolio.
Realty Revenue introduced its third quarter earnings outcomes on November 3. The belief reported that it generated revenues of $840 million through the quarter, which was 71% greater than the revenues that Realty Revenue generated through the earlier yr’s quarter.
Realty investments into new properties and its acquisition of VEREIT that closed in late 2021 impacted the year-over-year comparability to a big diploma. Realty Revenue’s funds-from-operations rose considerably versus the prior yr’s quarter, though AFFO-per-share progress was decrease, as a result of share issuance.
Realty Revenue however managed to generate adjusted FFO-per-share of $0.98 through the quarter. Realty Revenue expects that its outcomes throughout 2022 will characterize a brand new report, as funds from operations are forecasted to return in at ~$3.90 on a per-share foundation throughout fiscal 2022.
Click here to download our most recent Sure Analysis report on Realty Income (preview of web page 1 of three proven under):
No-Price DRIP Dividend Aristocrat #2: 3M Firm (MMM)
- 5-year anticipated annual returns: 15.8%
3M sells greater than 60,000 merchandise which can be used each day in houses, hospitals, workplace buildings and faculties across the world. It has about 95,000 staff and serves prospects in additional than 200 international locations.3M is now composed of 4 separate divisions. The Security & Industrial division produces tapes, abrasives, adhesives and provide chain administration software program in addition to manufactures private protecting gear and safety merchandise.
The Healthcare section provides medical and surgical merchandise in addition to drug supply techniques. Transportation & Digitals division produces fibers and circuits with a objective of utilizing renewable vitality sources whereas decreasing prices. The Shopper division sells workplace provides, residence enchancment merchandise, protecting supplies and stationary provides.
Supply: Investor Presentation
The corporate additionally introduced that it is going to be spinning off its Health Care segment right into a standalone entity, which might have had $8.6 billion of income in 2021.
The transaction is anticipated to shut by the top of 2023.3M offered an up to date outlook for 2022, with the corporate now anticipating adjusted earnings-per-share of $10.30 to $10.80 for the yr, down from $10.75 to $11.25 beforehand.
Click here to download our most recent Sure Analysis report on 3M (preview of web page 1 of three proven under):
No-Price DRIP Dividend Aristocrat #1: Albemarle Company (ALB)
- 5-year anticipated annual returns: 17.6%
Albemarle is the biggest producer of lithium and second largest producer of bromine on the earth. The 2 merchandise account for almost two-thirds of annual gross sales. Albemarle produces lithium from its salt brine deposits within the U.S. and Chile. The corporate has two joint ventures in Australia that additionally produce lithium.
Albemarle’s Chile belongings provide a really low-cost supply of lithium.The corporate operates in almost 100 international locations and consists of 4 segments. Albemarle produces annual gross sales of greater than $5 billion.
Supply: Investor Presentation
The corporate operates in almost 100 international locations and consists of 4 segments: Lithium & Superior Supplies (49% of gross sales), Bromine Specialties (21% of gross sales), Catalysts (21% of gross sales), and Different (9% of gross sales).
Albemarle produces annual gross sales of $7.3 billion. It is among the top lithium stocks.
Click here to download our most recent Sure Analysis report on Albemarle (preview of web page 1 of three proven under):
Closing Ideas and Further Assets
Enrolling in DRIP shares might be a good way to compound your portfolio earnings over time.Further sources are listed under for traders excited by additional analysis for DRIP shares.
For dividend progress traders excited by DRIP shares, the 15 corporations talked about on this article are an incredible place to start out. Every enterprise could be very shareholder pleasant, as evidenced by their lengthy dividend histories and their willingness to supply traders no-fee DRIP shares.
At Certain Dividend, we frequently advocate for investing in corporations with a excessive likelihood of accelerating their dividends each yr.
If that technique appeals to you, it might be helpful to flick thru the next databases of dividend progress shares:
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