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Income Investing: 3 Dividend Aristocrats With Bright Outlooks
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Income investors love to target Dividend Aristocrats, S&P 500 companies that have increased dividend payouts for at least 25 consecutive years.
Clearly, companies in the Dividend Aristocrat club carry well-established and successful business operations, displayed by their commendable commitment to shareholders over decades of increased payouts.
And three members of the club – McDonald’s (MCD - Free Report) , Aflac (AFL - Free Report) , and PepsiCo (PEP - Free Report) – have all seen their near-term earnings outlooks drift higher, currently sporting favorable Zacks Ranks.
For those interested in reaping a steady and reliable income stream, let’s take a closer look at each.
McDonald’s
We’re all familiar with the restaurant titan McDonald’s, seeing those golden arches at seemingly every stop. The stock is presently a Zacks Rank #2 (Buy), with earnings expectations modestly increasing across the board.
Image Source: Zacks Investment Research
The company’s dividend yields a solid 2.1% annually, nicely above the Zacks Retail & Wholesale sector average. Of course, growth is there, too, with MCD sporting a 7% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
McDonald’s has delivered better-than-expected results consistently as of late, exceeding the Zacks Consensus EPS estimate in five consecutive quarters. Just in its latest release, the restaurant titan penciled in a 14% earnings beat and delivered a 6% revenue surprise.
Image Source: Zacks Investment Research
Aflac
Aflac is an American insurance company and a massive supplier of supplemental insurance within the U.S. The company currently sports the highly-coveted Zacks Rank #1 (Strong Buy), with analysts taking their expectations higher among all timeframes.
Image Source: Zacks Investment Research
Aflac shares presently yield 2.5% annually, precisely in line with the Zacks Finance sector average. Impressively, the company has grown its payout by more than 11% over the last five years.
Image Source: Zacks Investment Research
In addition, the company has consistently bought back its own shares, reflecting yet again another shareholder-friendly move. This is illustrated in the chart below.
Image Source: Zacks Investment Research
PepsiCo
PepsiCo is an American multinational beverage, food, and snack corporation headquartered in New York. The stock sports a favorable Zacks Rank #2 (Buy), with earnings expectations increasing modestly across several timeframes.
PEP’s annual dividend yield comes in at a solid 2.7%, nearly the same as the Zacks Consumer Staples sector average. Similar to the companies above, PEP has shown a commitment to increasingly rewarding its shareholders, carrying a 5.5% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
Shares may not entice value-focused investors, with the current 25.5X forward earnings multiple sitting marginally above the five-year median and the Zacks sector average. The stock carries a Style Score of “C” for Value.
Image Source: Zacks Investment Research
Bottom Line
Many investors pivot to the Dividend Aristocrats when looking to generate an income stream.
After all, it’s easy to understand why; these companies have upped their payouts for a minimum of 25 consecutive years, fully reflecting their reliability.
And all three members of the club above – McDonald’s (MCD - Free Report) , Aflac (AFL - Free Report) , and PepsiCo (PEP - Free Report) – have all seen their near-term earnings outlooks drift higher, indicating optimism among analysts.
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Income Investing: 3 Dividend Aristocrats With Bright Outlooks
Income investors love to target Dividend Aristocrats, S&P 500 companies that have increased dividend payouts for at least 25 consecutive years.
Clearly, companies in the Dividend Aristocrat club carry well-established and successful business operations, displayed by their commendable commitment to shareholders over decades of increased payouts.
And three members of the club – McDonald’s (MCD - Free Report) , Aflac (AFL - Free Report) , and PepsiCo (PEP - Free Report) – have all seen their near-term earnings outlooks drift higher, currently sporting favorable Zacks Ranks.
For those interested in reaping a steady and reliable income stream, let’s take a closer look at each.
McDonald’s
We’re all familiar with the restaurant titan McDonald’s, seeing those golden arches at seemingly every stop. The stock is presently a Zacks Rank #2 (Buy), with earnings expectations modestly increasing across the board.
Image Source: Zacks Investment Research
The company’s dividend yields a solid 2.1% annually, nicely above the Zacks Retail & Wholesale sector average. Of course, growth is there, too, with MCD sporting a 7% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
McDonald’s has delivered better-than-expected results consistently as of late, exceeding the Zacks Consensus EPS estimate in five consecutive quarters. Just in its latest release, the restaurant titan penciled in a 14% earnings beat and delivered a 6% revenue surprise.
Image Source: Zacks Investment Research
Aflac
Aflac is an American insurance company and a massive supplier of supplemental insurance within the U.S. The company currently sports the highly-coveted Zacks Rank #1 (Strong Buy), with analysts taking their expectations higher among all timeframes.
Image Source: Zacks Investment Research
Aflac shares presently yield 2.5% annually, precisely in line with the Zacks Finance sector average. Impressively, the company has grown its payout by more than 11% over the last five years.
Image Source: Zacks Investment Research
In addition, the company has consistently bought back its own shares, reflecting yet again another shareholder-friendly move. This is illustrated in the chart below.
Image Source: Zacks Investment Research
PepsiCo
PepsiCo is an American multinational beverage, food, and snack corporation headquartered in New York. The stock sports a favorable Zacks Rank #2 (Buy), with earnings expectations increasing modestly across several timeframes.
PEP’s annual dividend yield comes in at a solid 2.7%, nearly the same as the Zacks Consumer Staples sector average. Similar to the companies above, PEP has shown a commitment to increasingly rewarding its shareholders, carrying a 5.5% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
Shares may not entice value-focused investors, with the current 25.5X forward earnings multiple sitting marginally above the five-year median and the Zacks sector average. The stock carries a Style Score of “C” for Value.
Image Source: Zacks Investment Research
Bottom Line
Many investors pivot to the Dividend Aristocrats when looking to generate an income stream.
After all, it’s easy to understand why; these companies have upped their payouts for a minimum of 25 consecutive years, fully reflecting their reliability.
And all three members of the club above – McDonald’s (MCD - Free Report) , Aflac (AFL - Free Report) , and PepsiCo (PEP - Free Report) – have all seen their near-term earnings outlooks drift higher, indicating optimism among analysts.