5 Dividend Aristocrats To Buy and Hold Forever

Earning the moniker of a dividend aristocrat is no easy feat for a publicly traded company on the New York Stock Exchange: the company has to show up in the S&P 500 index, the company has to routinely pay out a dividend to its shareholders, and the company has to increase the total payout of its dividend with each fiscal year. Not to mention, the company also has to keep this behavior up for 25 years or more.

There are, of course, some additional factors that go into the ranking of dividend aristocrats — things like liquidity or the actual size or market cap of the company in question — but these are the basics of a dividend aristocrat on the New York Stock Exchange.

If you couldn’t tell based on this description alone, dividend aristocrats are the kind of stocks that retail investors and traders can buy and hold onto forever. These companies are large, well-established, and show no signs of disappearing anytime soon — they should stand the test of time in your investment portfolio if you let them (and the companies will even pay you for doing so). The five companies listed below are a great place to start.

Johnson & Johnson Dividend Yield Almost 2.5%

While Johnson & Johnson (JNJ) has been in the news quite prevalently as of late because of the company’s single-dose COVID-19 vaccine, the truth is that Johnson & Johnson is so much more than just a vaccine developer.

Founded all the way back in 1886, Johnson & Johnson has been pioneering medical devices, products, and treatments for over 130 years now.

As a result, the company’s been a publicly traded stock since 1944 and has been steadily on the rise ever since. Currently, the company’s stock sits at a price per share of nearly $174.

As far as Johnson & Johnson’s dividend is concerned, the company’s annual dividend is $4.24 with a yield of 2.44%. Compare this to a decade ago in 2011, when Johnson & Johnson’s annual dividend came in at $2.25, it’s clear to see that the company is committed to significantly increasing its dividend to shareholders with each new year so that it can remain a trusted and dependable dividend aristocrat.

Medtronic Has A Proven History Over 7 Decades

While Medtronic (MDT) might be the least recognizable name in this batch of five dividend aristocrats to buy and hold forever, it’s far from the least significant. That’s because, while you might not be as familiar with the medical device manufacturer, you almost certainly know someone (or even are someone yourself) who has benefitted from Medtronic’s products.

Founded back in 1949 and publicly traded since 1977, Medtronic has spent the last 72 years conceiving and manufacturing medical devices that help with spinal, cardiovascular, diabetic, and surgical needs. 

Medtronic’s current annual dividend is $2.52, representing a dividend yield of 1.88%. Compare this to 2011, where Medtronic’s annual dividend came out to be $0.935 for the year, and retail investors and traders can clearly see that the company’s dividend has more than doubled over the past decade.

While this annual dividend is smaller than Johnson & Johnson’s now, Medtronic could eventually surpass Johnson & Johnson’s at its current rate in a little more than a decade.

Hormel Foods Is A Century Old Dividend Aristocrat

After reading about two companies who have been involved in the medical field for decades upon decades, it might sound strange to see that Hormel Foods (HRL) is a dividend aristocrat on the same level as Johnson & Johnson and Medtronic.

In truth, the seller of packaged and refrigerated foods has been around since 1891 and has been a publicly traded company since 1928 — a good 16 years before even Johnson & Johnson went public.

The company’s price per share might only be hovering about $45 right now, but this number represents decades of sturdy and reliable growth on the New York Stock Exchange.

Hormel Foods’ dividend is similarly sturdy: the company’s annual dividend is currently $0.98, representing a dividend yield of 2.16%. A decade ago, Hormel Foods’ annual dividend was just $0.255 — this means that the company has managed to nearly quadruple its annual dividend over the past 10 years, easily making it a dividend aristocrat to buy and hold forever.

In another decade or two, there’s no doubt Hormel Foods’ dividend will be even more lucrative for retail investors and traders who held on tightly to their HRL shares.

Clorox Dividend Doubled In Past 10 Years

Given the state of the world the past 18 months or so, it makes sense to see Clorox on this list — just like Johnson & Johnson, The Clorox Company (CLX) has been in incredibly high demand since the onset of the novel coronavirus.

However, also similarly to Johnson & Johnson, Clorox’s history as a strong and trustworthy stock stretches back much further than just 2020.

In fact, Clorox has been around since 1913, and has been publicly traded since 1928. While its slate of products was significantly smaller in the 1910s, today the company has ownership of several other notable brands such as Burt’s Bees, Hidden Valley, Pine-Sol, and dozens of others in addition to its namesake cleaning products.

Clorox stock currently below its highs of $240 a share reached in August of 2020. Its annual dividend is presently $4.64, indicative of a dividend yield of 2.78%.

Compare this to 2011’s annual dividend of $2.30, and it’s evident that Clorox has more than doubled its annual dividend over the past ten years. It’s a dividend aristocrat through and through.

Coca Cola On Track To Be A Dividend King

Without a doubt one of the most instantly recognizable brand names in history, Coca Cola (KO) instantly brings to mind an image of an ice cold drink.

Coke products range from sodas to juices to waters and everything in between, and the company has been up and running since 1886.

After going public in 1919, the company’s stock has been on the up-and-up ever since (even if there are a few rough patches for Coca Cola stock here and there, the big picture is still an incredibly positive one). The company’s stock has persistently remained muted under $60 per share.

Dividend-wise, Coca Cola offers an annual dividend of $1.68 with a dividend yield of 3%. While this might seem lower than you would think for a company of Coca Cola’s stature, it’s worth arguing that a dividend is a dividend no matter what, and anything’s better than nothing.

Besides, as a dividend aristocrat, retail investors and traders can sit back and relax knowing that this dividend is only going to increase as time goes on.

The Bottom Line: Should You Invest in These Dividend Aristocrats to Buy and Hold Forever?

Simply put, Johnson & Johnson, Medtronic, Hormel Foods, Clorox, and Coca Cola are the kind of dividend aristocrats retail investors and traders can trust.

These companies have proven themselves to be more or less recession-proof, and have continued to profit even throughout the financial turmoil that came along with the COVID-19 pandemic.

Better yet, many (if not all) of these dividend aristocrats are on track to becoming dividend kings: companies that have increased dividend payments each year for 50 years or more.

If you decide to invest in one or all of these dividend aristocrats, you can rest easy knowing you’re a shareholder in a large, dependable company that will reward you for buying and holding onto its shares forever.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.