Dividend aristocrats are companies with consistent dividend payouts, increasing gradually over the years. Such companies tend to be large and well-established and are committed to returning cash to investors.
Against this backdrop, considering investment in dividend aristocrat stocks, Johnson & Johnson (JNJ), PepsiCo, Inc. (PEP), and Target Corporation (TGT) could be wise for consistent payouts.
During the fourth quarter of 2024, the U.S. economy maintained its moderate growth. The real GDP increased at a 2.3% annualized rate during the fourth quarter, driven by strong consumer spending growth and government spending. This was partly offset by a decrease in investment and falling imports, giving mixed signals. Also, the growth was slower than real GDP growth of 3.1% in the third quarter.
During the period, consumer spending increased at its fastest pace in nearly two years at a robust 4.2% rate, amounting to about two-thirds of all activity as usual.
Amid the current market volatilities stemming from the projected monetary policy reforms and slowed interest rate cuts, adding Dividend Aristocrats could be a smart choice for investors. Dividend Aristocrats are well-established large-cap companies that have robust, cash-generating business models and provide regular dividends and stability in market downturns.
These are S&P 500 companies that have increased their dividend annually for at least 25 years, ideal during economic uncertainty for diversification, reliable income, and risk mitigation. Considering these market trends, let us delve into the fundamentals of three top dividend aristocrat stocks that have consistently increased their dividends.
Johnson & Johnson (JNJ)
JNJ researches, develops, manufactures, and sells various products globally in the healthcare field. The company operates through the Innovative Medicine segment and the MedTech segment. It offers products for various therapeutic areas, such as infectious diseases, neuroscience, oncology, cardiovascular disease, and metabolism.
On January 21, 2025, JNJ announced the FDA approval of a supplemental New Drug Application (sNDA) for SPRAVATO® (esketamine) CIII nasal spray, making this innovative treatment the first and only monotherapy for adults living with major depressive disorder. Approval was granted based on positive study results that showed rapid and superior improvement.
On January 2, 2025, JNJ’s Board of Directors declared a cash dividend for the first quarter of 2025 of $1.24 per share on its common stock. The dividend is payable on March 4, 2025, to shareholders of record at the close of business on February 18, 2025.
JNJ pays an annual dividend of $4.96, which translates to a yield of 3.26% at the current share price. Its four-year average dividend yield is 2.76%. Moreover, the company’s dividend payouts have increased at a CAGR of 5.5% over the past five years. JNJ has raised its dividends for 62 consecutive years.
In the fourth quarter that ended December 31, 2024, JNJ’s reported sales were $22.52 billion, marking a growth of 5.3% year-over-year. Its gross profit increased 5.4% from the prior year’s quarter to $15.39 billion. Also, the company’s adjusted net earnings came in at $4.95 billion or $2.04 per share for the quarter, respectively.
Analysts expect JNJ’s revenue for the third quarter (ending September 2025) to grow 1.1% year-over-year to $22.71 billion, while its EPS for the same period is expected to increase 12% from the prior-year quarter to $2.71. Moreover, the company has surpassed Street EPS estimates in all of the trailing four quarters.
JNJ’s stock gained 5.7% over the past month to close the last trading session at $151.87.
JNJ’s robust outlook is reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has a B grade for Quality, Stability, Growth, Value, and Sentiment. JNJ is ranked #4 of 148 stocks within the Medical - Pharmaceuticals industry.
To see all JNJ POWR Ratings, click here.
PepsiCo, Inc. (PEP)
PEP manufactures, markets, distributes, and sells various beverages and convenient foods worldwide. The company functions in seven segments, including Frito-Lay North America; Quaker Foods North America; PepsiCo Beverages North America; Latin America; Europe; Africa, Middle East and South Asia; and Asia Pacific, Australia and New Zealand and China Region.
On January 17, 2025, PEP completed the acquisition of Siete Foods for $1.2 billion. The strategic acquisition of Siete expands PEP’s food portfolio with healthier, simple ingredient options. It also reinforces the company’s emphasis on delivering nutritious, simple foods and ingredients and reaching a wider customer base.
Also, on November 22, 2024, PEP acquired the remaining 50% interest in Sabra Dipping Company, LLC, and PepsiCo-Strauss Fresh Dips & Spreads International GmbH, becoming the sole owner of the companies. The acquisition expanded PEP's positive choice portfolio and accelerated refrigerated fresh dips and spreads innovation.
On November 19, 2024, PEP’s Board of Directors declared a quarterly dividend of $1.355 per share of its common stock, reflecting a 7% increase from the prior-year period. The dividend was paid on January 6, 2025, to shareholders of record at the close of business on December 6, 2024.
PEP has raised its dividends for 52 consecutive years. Its annual dividend is $5.42, which translates to a yield of 3.60% at the current share price. Its four-year average dividend yield is 2.77%. Also, the company’s dividend payouts have increased at a CAGR of 7.9% over the past three years.
During the third quarter that ended September 7, 2024, PEP reported a total net revenue of $23.32 billion, and its operating profit was $3.87 billion. The company’s gross profit increased 1.1% from the year-ago value to $12.92 billion.
Also, non-GAAP net income attributable to PepsiCo totaled $3.19 billion and $2.13 per common share, indicating growth of 2.6% and 2.7% from the prior year’s quarter, respectively.
Analysts expect PEP’s revenue for the fourth quarter (ended December 2024) to increase marginally year-over-year to $27.89 billion. Likewise, the company’s EPS for the same period is expected to grow 9.1% year-over-year to $1.94. Also, the company topped the consensus EPS estimates in all four trailing quarters.
Over the past month, the stock has gained marginally to close the last trading session at $150.27.
PEP’s POWR Ratings reflect its bright prospects. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
The stock has a B grade for Growth and Quality. Within the Beverages industry, PEP is ranked #11 out of 31 stocks.
Click here to access the other PEP ratings for Momentum, Value, Stability, and Sentiment.
Target Corporation (TGT)
TGT operates as a general merchandise retailer. Its products include apparel for women, men, boys, girls, toddlers, and infants and newborns, jewelry, accessories, and shoes, and beauty and personal care, baby gear, cleaning, paper products, and pet supplies.
On January 15, 2025, TGT’s Board of Directors declared a quarterly dividend of $1.12 per share. The dividend will be paid on March 1, 2025, to shareholders of record on February 12, 2025.
TGT has been paying dividends to its shareholders for the past 56 years. Its annualized dividend of $4.48 per share equates to a dividend yield of 3.34% on the current share price. Its four-year average yield is 2.39%. Over the past three years, TGT’s dividend has grown at a CAGR of 12% and at 11.3% over the past five years.
On January 9, 2025, TGT announced its plans to expand its wellness offerings by introducing more than 2,000 new items across multiple categories, including 600 exclusive products. The expansion spans across categories like beauty, functional beverages, hair health, nutrition, and wellness tech, with over half of the new items ranging under $10.
During the third quarter that ended November 2, 2024, TGT’s total revenue increased 1.1% year-over-year to $25.67 billion, and its operating income was $1.17 billion for the same quarter. Also, the company’s net earnings came in at $854 million or $1.85 per share for the period, respectively.
Furthermore, as of November 2, 2024, the company’s total assets stood at $58.53 billion, compared to $55.36 billion as of February 3, 2024.
As per the company's guidance for the fourth quarter, TGT expects adjusted EPS of $1.85 to $2.45. It also expects full-year GAAP and adjusted EPS in the range of $8.30 to $8.90.
Street expects TGT’s revenue for the first quarter (ending April 2025) to grow 2.5% year-over-year to $25.15 billion. The company's EPS is expected to increase 1.3% year-over-year to $2.06 for the same quarter. Further, for the fiscal year (ending January 2026), its revenue and EPS are expected to grow 2.7% and 6.9% year-over-year to $109.13 billion and $9.27.
Shares of TGT have surged marginally over the past six months to close the last trading session at $134.16.
TGT’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
TGT has a B grade for Momentum, Value, and Quality. It is ranked #20 among the 35 stocks in the A-rated Grocery/Big Box Retailers industry.
Click here to access additional TGT ratings for Growth, Stability, and Sentiment.
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JNJ shares were trading at $153.94 per share on Tuesday afternoon, up $2.07 (+1.36%). Year-to-date, JNJ has gained 6.44%, versus a 2.69% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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