Cream of the Crop: The 3 Highest-Rated Dividend Aristocrats to Buy in April

Stocks to buy

Investing in stocks is a high-risk endeavor, no matter how seasoned an investor you are. There will always be some that catch you off guard and throw your portfolio into a string of losses that are hard to recover from. Many people tout “holy grail” strategies, especially on social media. I believe they’re all wishful thinking at best. But with the right stocks — like Dividend Aristocrats — you can find investments to buy and hold forever.

To come up with the list of stocks in this article, I screened the list of Dividend Aristocrats using the following criteria:

  • Strong Buy ratings: I only want the top-rated Dividend Aristocrats based on analyst ratings.
  • Analyst following: I screened for companies with at least five analysts covering them to ensure little bias.
  • Earnings surprise: I want to select the highest-earning performers by choosing only those with the highest earnings beat.

Here’s what came up.

Target (TGT)

Source: Shutterstock

Known for its slogan “Expect more, pay less,” Target (NYSE:TGT) is one of the biggest retailers in the market. The company offers various products, from electronics, food, beverages, beauty products, apparel and other household essentials, essentially making it a one-stop-shop for consumers. 

Over the years, Target has developed a cult following due to its partnerships with well-known designers and collaborations with fashion brands for their exclusive collections. It recently launched the Diane von Furstenberg limited-time spring collection and Dwayne “The Rock” Johnson’s exclusive-to-Target men’s skincare brand, Papatui.

It’s no surprise that analysts love Target and gave it their approval with a Strong Buy recommendation. Full-year GAAP adjusted EPS came in at $8.94, nearly a 50% YOY growth and a 23.65% earnings surprise. 

In addition, Target also reported an almost 2% increase in operating income margin compared to last year, well above its guidance expectations. As one of the Dividend Aristocrats, Target pays investors an annual dividend of $4.40, reflecting a yield of around 2.59%. With strong earnings results and analyst ratings, Target deserves a spot in any long-term investor portfolio.

Emerson Electric (EMR)

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Driven with a mission to create innovative technology and software that aims for a smarter, healthier, sustainable future, Emerson Electric (NYSE:EMR) operates in two business groups that cater to six main segments:

  • Intelligent Devices business: includes final control, Safety and Productivity, discrete automation and discrete automation
  • Software and Control business: includes AspenTech, control systems and software, and Test and Measurement segment

Emerson is a recognized leader in innovation and is poised to revolutionize industrial manufacturing with next-generation automation architecture through Boundless Automation. The company sees it as an inflection point for modernizing industry operations. No wonder Wall Street loves Emerson and rates it a Strong Buy.

Emerson Electric’s financials are enough to justify analyst ratings. The company ended the first quarter with a 22% growth in underlying sales from the year-ago quarter. and adjusted EPS growth of 56%, which beat earnings expectations by 17.31%.

The company also forecasts net sales growth around the 14.5% to 17.0% range and underlying sales growth of 4.5% to 6.5% for 2024. What makes Emerson even more compelling is its Dividend Aristocrat status, which offers a growing dividend currently at $2.10 per year, representing an approximate 1.83% yield.

ExxonMobil (XOM)

Source: Shutterstock

ExxonMobil (NYSE:XOM) is one of the largest non-government-owned oil and energy companies. 

While ExxonMobil still has a clear commitment to the oil and gas market production, it has taken steps to achieve long-term carbon-intensity reduction with its mix of hydrogen, carbon capture storage and a combination of other products. Its large gas production keeps ExxonMobil in a strong position to fill the gaps that renewable energy sources cannot meet. Hence, I think a Strong Buy from analysts is warranted. 

As a Dividend Aristocrat, the company offers attractive income for investors with an approximate 3.15% yield. Indeed, the company allocates a large portion of its cash flow to rewarding shareholders with dividends.

What makes Exxon even more attractive is its prospects for future growth. The company has made strides in the lithium market through Mobil Lithium and a JERA partnership for a low-carbon hydrogen project. 

Exxon also beat its latest earnings expectations by 12.22%. With positive catalysts and its emphasis on giving back to its shareholders, ExxonMobil deserves a spot in any long-term investor’s Dividend Aristocrat portfolio.

On the date of publication, Rick Orford did not hold (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.

Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.

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