An Overview of the Safest Dividend Aristocrats

Author's Avatar
Feb 20, 2012
Dividend Aristocrats are stocks that have raised dividends over a period of more than 25 consecutive years and they are part of the S&P 500 Dividend Aristocrats Index. The index measures the performance of large-cap, blue chip companies within the S&P 500 that have followed a policy of increasing dividends every year for at least 25 consecutive years. Unfortunately, the index covers only 25 percent of all stocks with such a long dividend payment history. The other stocks can be discovered as Dividend Champions. However, I’ve tried to summarize only stocks with a very low volatility, measured by a low beta ratio (a value of less than 0.5). Fourteen companies remained of which six have a yield of more than 3 percent. Five stocks have a buy or better recommendation.


Here are my favorite stocks:


1. PepsiCo (PEP, Financial) has a market capitalization of $98.03 billion. The company employs 294,000 people, generates revenues of $66,504.00 million and has a net income of $6,462.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $12,370.00 million. Because of these figures, the EBITDA margin is 18.60 percent (operating margin 14.48 percent and the net profit margin finally 9.72 percent).


The total debt representing 36.73 percent of the company’s assets and the total debt in relation to the equity amounts to 130.04 percent. Due to the financial situation, a return on equity of 30.70 percent was realized. Twelve trailing-months earnings per share reached a value of $4.02. Last fiscal year, the company paid $2.02 in form of dividends to shareholders.


Here are the price ratios of the company: The P/E ratio is 15.61, P/S ratio is 1.47 and P/B ratio is 4.73. Dividend Yield: 3.29 percent. Beta ratio: 0.49.


2. The Procter & Gamble Company (PG, Financial) has a market capitalization of $178.79 billion. The company employs 129,000 people, generates revenues of $82,559.00 million and has a net income of $11,797.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $18,656.00 million. Because of these figures, the EBITDA margin is 22.60 percent (operating margin 19.16 percent and the net profit margin finally 14.29 percent).


The total debt representing 23.14 percent of the company’s assets and the total debt in relation to the equity amounts to 47.33 percent. Due to the financial situation, a return on equity of 18.32 percent was realized. Twelve trailing months earnings per share reached a value of $3.40. Last fiscal year, the company paid $1.97 in form of dividends to shareholders.


Here are the price ratios of the company: The P/E ratio is 19.09, P/S ratio is 2.17 and P/B ratio is 2.70. Dividend Yield: 3.24 percent. Beta ratio: 0.43.


3. Colgate-Palmolive Company (CL, Financial) has a market capitalization of $45.13 billion. The company employs 39,200 people, generates revenues of $16,734.00 million and has a net income of $2,554.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4,262.00 million. Because of these figures, the EBITDA margin is 25.47 percent (operating margin 22.95 percent and the net profit margin finally 15.26 percent).


The total debt representing 37.8 percent of the company’s assets and the total debt in relation to the equity amounts to 202.53 percent. Due to the financial situation, a return on equity of 96.28 percent was realized. Twelve trailing-months earnings per share reached a value of $4.94. Last fiscal year, the company paid $2.27 in form of dividends to shareholders.


Here are the price ratios of the company: The P/E ratio is 18.87, P/S ratio is 2.70 and P/B ratio is 19.00. Dividend Yield: 2.49 percent. Beta ratio: 0.42.


Take a closer look at the full table of the safest Dividend Aristocrats. The average P/E ratio is 17.84 and forward P/E ratio is 14.05. The dividend yield has a value of 2.32 percent. P/B ratio is 5.58 and the P/S ratio is 1.72. The operating margin amounts to 14.33 percent.


Related stock ticker symbols:

ED, KMB, CLX, ABT, PEP, PG, MCD, CL, MKC, WMT, ADM, HRL, FDO, BCR


Selected Articles:

· Cheap S&P 500 Dividend Aristocrats With Highest Expected Growth For The Next Half Decade

· Dividend Aristocrats With Biggest Insider Buys

· 11 Dividend Aristocrats Close To 52-Week Highs

· 14 Dividend Aristocrats With Additional Payout Potential