While we know that the stock market will grow over time, on a day-to-day or even month-to-month basis, the stock market is always changing value due to the daily fluctuation of all the stocks.
The opportunities will vary every month and that’s why it’s important to have a systematic approach to understanding which dividend stocks are an opportunity. An opportunity can be for a stock you already own or simply for a new addition to your portfolio. It is important to note that the rankings below do not assess the viability of the business.
Top 5 S&P500 Dividend Aristocrat Stocks
Here are the top 5 US aristocrat stocks for this month, see below for the details. This is obviously a snapshot in time at the time of writing, many factors could change the rankings.
Stay on top of your next investment decision with the Dividend Snapshot US Aristocrats List. Review the Chowder Rule along with the 3, 5, and 10 year ratios for dividend growth, EPS growth and the payout ratio to pick a solid investment for your portfolio.
Cardinal HealthHeadquartered in Dublin, Ohio, Cardinal Health, Inc. is a global, integrated healthcare services and products company, providing customized solutions for hospitals, health systems, pharmacies, ambulatory surgery centers, clinical laboratories and physician offices worldwide. The company provides clinically-proven medical products and pharmaceuticals and cost-effective solutions that enhance supply chain efficiency from hospital to home. Cardinal Health connects patients, providers, payers, pharmacists and manufacturers for integrated care coordination and better patient management. Backed by nearly 100 years of experience, with approximately 50,000 employees in nearly 60 countries, Cardinal Health ranks among the top 25 on the Fortune 500.
- Opportunity Score: 89%
- Stock: NYSE:CAH
- Sector: Healthcare
- Dividend Yield: 3.44%
- Dividend Payout Ratio: 79.05%
- Chowder Score: 16.55%
Nucor and its affiliates are manufacturers of steel products, with operating facilities primarily in the U.S. and Canada. Products produced include: carbon and alloy steel -- in bars, beams, sheet and plate; hollow structural section tubing; electrical conduit; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; steel grating; and wire and wire mesh. Nucor, through The David J. Joseph Company, also brokers ferrous and nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America's largest recycler.
- Opportunity Score: 89%
- Stock: NYSE:NUE
- Sector: Basic Materials
- Dividend Yield: 2.40%
- Dividend Payout Ratio: 23.10%
- Chowder Score: 3.07%
T. Rowe Price Group, Inc.
Founded in 1937, Baltimore-based T. Rowe Price is a global investment management organization with $1.01 trillion in assets under management as of October 31, 2018. The organization provides a broad array of mutual funds, subadvisory services, and separate account management for individual and institutional investors, retirement plans, and financial intermediaries. The organization also offers a variety of sophisticated investment planning and guidance tools. T. Rowe Price's disciplined, risk-aware investment approach focuses on diversification, style consistency, and fundamental research.
- Opportunity Score: 90%
- Stock: NASDAQ:TROW
- Sector: Financial Services
- Dividend Yield: 2.92%
- Dividend Payout Ratio: 38.04%
- Chowder Score: 11.93%
For more than a century, the people of Archer Daniels Midland Company have transformed crops into products that serve the vital needs of a growing world. Today, we’re one of the world’s largest agricultural processors and food ingredient providers, with approximately 31,000 employees serving customers in more than 170 countries. With a global value chain that includes approximately 500 crop procurement locations, 270 food and feed ingredient manufacturing facilities, 44 innovation centers and the world’s premier crop transportation network, we connect the harvest to the home, making products for food, animal feed, industrial and energy uses.
- Opportunity Score: 87%
- Stock: NYSE:ADM
- Sector: Financial Services
- Dividend Yield: 2.89%
- Dividend Payout Ratio: 33.17%
- Chowder Score: 12.95%
Target Corporation, incorporated on February 11, 1902, is the second-largest discount store retailer in the United States, behind Walmart, and a component of the S&P 500 Index.
Target Corporation is a general merchandise retailer selling products through its stores and digital channels. The company offers high-quality, on-trend merchandise at discounted prices in clean, spacious, guest-friendly stores and through its digital channels. The company has found success as a cheap-chic player in the industry.
- Opportunity Score: 80%
- Stock: NYSE:TGT
- Sector: Consumer Defensive
- Dividend Yield: 1.66%
- Dividend Payout Ratio: 44.60%
- Chowder Score: 16.87%
Opportunity Score Formula
The top 5 US aristocrats stocks identified above are based on a score calculated using a number of financial data points from the companies. In the end, the score is generated from following five key indicators:
- 52-Week Range: Trend over the past 52 weeks. Is the stock pulling back from a 52 week high?
- P/E Ratio: Is the stock price running away from its earnings?
- Dividend Yield: Is the yield attractive? Usually could identify a pullback if the yield starts to go up or major trouble if it goes too high.
- Dividend Growth: Uses dividend growth and the Chowder Rule. Is the company capable of growing the dividend consistently?
- Dividend Payout Ratio: Uses historical averages to put today’s ratio in perspective. Is the company able to grow the dividend at the same rate it increases its earnings?
The generated score is meant to assess an entry point opportunity based on historical and today’s numbers. It completely ignores the business quality, the quality of the company is for every investor to assess. My stock selection process breaks down the quantitative and qualitative assessments investors should establish to pull the trigger before buying.
If you are interested in more details, the S&P500 Dividend Aristocrats List provides many more data points to help make your investment decision.
DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.