While the equities market has performed decently well this year, momentum noticeably faded in the past month, warranting a closer look at the dividend aristocrats to buy and hold. These enterprises command 25 years of consecutive dividend increases, offering a steady hand during troubled times.

Fundamentally, one of the reasons why the best dividend aristocrats for long-term investors should appeal much more strongly now than before centers on their underlying resilience. Passive income must come from somewhere. Therefore, entities that consistently generate earnings should weather storms much better than those that don’t. Also, dividend aristocrats with high yield and growth potential offer a two-fer: they provide critical passive income while also facilitating upside return potential.

HRL Hormel Foods $40.22
AMCR Amcor $10.36
AFL AFLAC $66.46
MCD McDonald’s $295.67
ATO Atmos Energy $118.75
IBM IBM. $121.93
XOM Exxon Mobil $107.65

Hormel Foods (HRL)

stock market ticker screen with the word

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An American food processing company founded in 1891, Hormel Foods (NYSE:HRL) makes an easy case for dividend aristocrats to buy and hold. With such a long and storied history, HRL isn’t just your run-of-the-mill passive income provider. No, with 57 years of consecutive dividend increases under its belt, Hormel represents one of the dividend kings.

Fundamentally, Hormel offers predictability. Obviously, humans require a baseline minimum calorie intake. Therefore, investors can depend on the company to steadily deliver the goods. Also, its three-year revenue growth rate comes in at 9.2%, above 64.09% of its competitors. Therefore, it’s one of the best dividend aristocrats for long-term investors. Also, the company enjoys decent stability in the balance sheet. In particular, its Altman Z-Score comes in at 4.59, indicating low bankruptcy risk.

Currently, Hormel’s forward yield is 2.74%, which is decent. Plus, it’s noticeably higher than the consumer staple sector’s average yield of 1.89%. Also, its payout ratio is 58.63%, which is “doable” in terms of sustainability.

Amcor (AMCR)

A photo of a paper with a chart and the word

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A global packaging company, Amcor (NYSE:AMCR) develops and produces flexible packaging, rigid containers, specialty cartons, closures, and services for food, beverage, pharmaceutical, medical-device, home, and personal care, among other product categories. While relevant, AMCR hasn’t enjoyed an auspicious start this year, shedding almost 14% since the January opener. Still, for patient investors, AMCR could be one of the dividend aristocrats to buy and hold.

Financially, Amcor isn’t particularly remarkable. For example, its three-year revenue growth rate pings at 6.3%, above 53.26% of its competitors. However, the company does enjoy business predictability, facilitating consistent annual profitability. Plus, its trailing-year net margin is 6.54%, above 71.35% of sector players.

Enticingly, Amcor carries a forward yield of 4.75%. Moreover, it commands 40 years of consecutive dividend increases. With a decade to go before becoming a king of passive income, AMCR rates as one of the top dividend aristocrats to buy now.


A hand reaches out of a mailbox holding a wad of cash.

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While not the most exciting name in the capital markets, AFLAC (NYSE:AFL) deserves closer inspection thanks to its relevancy. Specializing in supplemental insurance, Aflac covers the gaps that traditional insurance programs miss. With all that’s transpired in the ugly Covid-19 pandemic, households may be better attuned to seeking financial protection. Therefore, AFL makes a case for dividend aristocrats to buy and hold.

Similar to Amcor above, Aflac doesn’t deliver particularly standout financial metrics. To be honest, its 0.9% three-year revenue growth rate is very ho-hum. At the same time, insurance companies suffered badly during the crisis. On a positive note, AFL trades at only 9.71 times trailing earnings, which is decently undervalued.

Turning to passive income, Aflac’s forward yield comes out to 2.49%. Though not the most generous yield, the company commands 40 years of consecutive annual dividend increases. As well, its payout ratio sits at 27.52%, presenting high sustainability confidence. If you just want to get through the current mess reliably, AFL deserves to be on your list of best dividend aristocrats for long-term investors.

McDonald’s (MCD)

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A fast-food icon and a symbol of American capitalism, McDonald’s (NYSE:MCD) intrigues for myriad reasons. On the fundamental front, the Golden Arches benefits from the trade-down effect. Essentially, it’s practically impossible for most households to be complete luddites regarding eating out, even during economic hardships. Fortunately, McDonald’s provides good eating – or so InvestorPlace’s Will Ashworth claims – and low prices.

Financially, the company holds its own though it’s not remarkable across the board. Its three-year revenue growth rate pings at 3.8%, which outpaces 71.17% of the restaurant industry. Also, it’s consistently profitable, which is what you want to see with your dividend aristocrats to buy and hold. Right now, its trailing-year net margin stands at 29.36%, above 96.54% of sector players.

For passive income, the fast-food king is almost a dividend king, commanding 46 years of consecutive annual increases. To be fair, its forward yield is modest at 2.05%. Nevertheless, it does beat the consumer discretionary sector’s average yield of 1.89.%

Atmos Energy (ATO)

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Headquartered in Dallas, Texas, Atmos Energy (NYSE:ATO) is one of the nation’s largest natural gas-only distributors. Per its public profile, Atmos serves about three million natural gas distribution customers in over 1,400 communities in nine states. Atmos Energy also manages company-owned natural gas pipeline and storage assets, including one of the largest intrastate natural gas pipeline systems in Texas.

Since the start of the year, ATO gained almost 7% of its equity value. Financially, the company again doesn’t have an outstandingly distinct profile. For example, its three-year revenue growth rate of 7.2% is just a bit below average. On the other hand, the company’s net margin is 18.18%, above 83.16% of competitors. And it’s consistently profitable.

Another strong example of a dividend aristocrat to buy and hold, Atmos commands 39 years of consecutive dividend increases. Its payout ratio is relatively low too at 46.27%. About the only drawback is that it’s not the most generous at a forward yield of 2.5%. Still, Wall Street analysts peg ATO as a consensus strong buy. Therefore, it ranks as one of the top dividend aristocrats to buy now.


The word

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Long derided as a fading legacy technology outfit, IBM (NYSE:IBM) has made a concerted effort to regain its mojo. Arguably, it’s done just that, focusing on leadership positions in burgeoning fields such as the hybrid cloud. It also experiments with other compelling innovations such as artificial intelligence and the blockchain. Being a generous provider of passive income, “Big Blue” is one of the dividend aristocrats to buy and hold.

What I like about IBM is its forward-looking potential. No, it’s clearly not a growth machine in the strictest sense of the term. However, in 2022, the company posted revenue of $60.53 billion, up 5.54% from 2021’s tally of $57,351. That’s not bad at all for an enterprise that started off in June 1911. Back then, William Howard Taft was the President of the U.S.

For passive income, IBM carries a forward yield of 5.48%, well above the tech sector’s average yield of 1.37%. It also features 30 years of consecutive dividend increases. From a contextual standpoint, IBM ranks among the dividend aristocrats with high yield and growth.

Exxon Mobil (XOM)

dividend stocks

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While the rise of electric vehicles seemingly makes hydrocarbon specialists obsolete, such a complete transition might not happen for a very long time (if ever). Therefore, investors can trust Exxon Mobil (NYSE:XOM), which ranks among the dividend aristocrats to buy and hold. Plus, with international factors potentially catalyzing XOM, it’s one of the top enterprises to watch.

Financially, the company recovered well from the Covid-19 disaster. On the top line, Exxon’s three-year revenue growth rate stands at 15.9%, above 65.02% of the field. Also, its EBITDA growth rate during the same period is 37%, above 72.26% of sector peers.

Enticingly, Exxon carries a forward yield of 3.34%. Though not the highest yield in the energy sector, it’s one of the more reliable with a payout ratio of 37.57%. Also, it commands 40 years of consecutive annual dividend increases, a status it will not give up without a fight. Overall, analysts peg XOM as a moderate buy with a price target of $130.54, implying nearly 20% upside potential. Thus, it’s one of the dividend aristocrats with high yield and growth.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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