Dividend aristocrats are companies that cater to a specific need for income-oriented investors. These stocks are often well established, reliable companies that are part of major indexes such as the S&P 500.
What makes them truly aristocratic is their commitment to increasing shareholder value. For a minimum of 25 consecutive years, they’ve consistently grown their dividend payment even during economic downturns. This track record of dependability makes them extremely attractive to investors seeking an additional income stream along with the potential for capital appreciation.
Now, let’s discover three overlooked dividend aristocrats to add to your portfolio now!
NextEra Energy (NEE)
NextEra Energy (NYSE:NEE) has showcased a history of growing its dividend and returning cash to shareholders. They are a leader in the green energy revolution, and one of the largest energy companies in the world with approximately 60 GW of generating capacity.
NextEra Energy isn’t just about impressive titles, and they’re constantly pushing the boundaries in renewable power generation. They have a significant presence in North America, with subsidiaries like Florida Power & Light, the largest power utility company in the United States. Additionally, they have NextEra Energy Canada, a company generating clean energy from wind turbines. The company closed off a strong operational year in 2023, and management expects growth to continue.
In their Q4 and full year 2023 results, NextEra Energy grew its top line revenue 34% YOY to $28.11 billion. Net income skyrocketed 76% to $7.3 billion, or $3.60 per share. They’re not shying away from the competition, after announcing the expansion of their renewable energy portfolio backlog. This included adding 3,245 megawatts of solar and energy storage capacity in Q3 2023. More importantly, NEE stock grew its dividend per share by 10% in 2023 and plans to grow by an additional 10% in 2024.
Coca-Cola (KO)
Coca-Cola (NYSE:KO) is one of the top dividend aristocrats to buy in March. Known for their rich history and strong brand recognition, Coca-Cola has a stellar track record of more than 50 years of consecutive dividend increases.
Coca-Cola has become a cultural phenomena, and their savvy marketing tactics have made them a household brand for more than a century. While they’re known for their carbonated soft drink ‘Coke’, they’ve further diversified their product offerings over the years. They have more than 250 drink options and serve more than 2 billion units of their products per day. The business’ strong moat, brand recognition, and pricing power make them an indestructible company built for both good and bad times.
Despite higher interest rates and a tougher macroeconomic environment, Coca-Cola was able to grow its revenue, EPS, and dividend per share in 2023. In FY23, revenue increased 6% YOY to $45.7 billion. Net income rose to $10.7 billion, or $2.47 per share. Operating margins remained healthy at 24.7%, and operating cash flow hit $11.6 billion. Emerging markets continue to see strong momentum and Coca-Cola’s pricing power make them well positioned for growth in 2024.
UnitedHealth Group (UNH)
UnitedHealth Group (NYSE:UNH) stock is down 5% in the past month despite the company’s continued strong operational execution. They’re a staple in the healthcare industry, and one of the largest companies in the world by revenue.
UnitedHealth Group operates through two distinctive arms; UnitedHealthcare and Optum. UnitedHealthcare is the company’s insurance arm that offers coverage for individuals, families and large employers. Additionally, Optum is a healthcare service provider and has been a primary growth driver for the company since its acquisition in 2011. There are few businesses of their size that can grow its dividend at a near 20% CAGR over the last decade.
In FY23, UNH saw record revenue of $371.6 billion. Operating income swelled 13.8% YOY to $34.2 billion, with EPS hitting a record $25.12 per share. Diversified growth at UnitedHealthcare and Optum drove strong double digit growth. Management is forecasting revenue in the $400 to $403 billion range in FY24, and forecasts adjusted EPS of $27.50 per share. This makes UNH stock one of the best dividend aristocrats to add to your portfolio now.
On the date of publication, Terel Miles 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.