Compounding Dividends

Compounding Dividends

Share this post

Compounding Dividends
Compounding Dividends
All Dividend Aristocrats + 5 of My Favorites
User's avatar
Discover more from Compounding Dividends
A newsletter about Dividend Investing from an ex-professional investor | REAL money is invested in the Portfolio.
Over 156,000 subscribers
Already have an account? Sign in
Content Hubs

All Dividend Aristocrats + 5 of My Favorites

TJ Terwilliger's avatar
TJ Terwilliger
Dec 30, 2024
1

Share this post

Compounding Dividends
Compounding Dividends
All Dividend Aristocrats + 5 of My Favorites
Share

Hi Partner 👋

Welcome to an 🔒 exclusive edition ðŸ”’ of Compounding Dividends.


Dividend Aristocrats are companies that have raised their dividends for at least 25 consecutive years.

There are only 66 of them.

They’re a great place for Dividend Investors to look at for ideas!

The s p 500 dividend aristocrats - Artofit
Source: Stock mania

In this article, we’ll rank the Aristocrats using different metrics.

At the end, I’ll share my 5 favorite ones.

Download all the Dividend Aristocrats here:

I created a spreadsheet for you with all the Aristocrats.

The spreadsheet has the following data:

  • Dividend Yield

  • Debt/Equity Ratio

  • 5-Year Dividend CAGR

  • EPS CAGR

  • Forward PE

  • A short description of the business

Dividend Aristocrats Spreadsheet

Highest Yields

The 5 Dividend Aristocrats with the highest Dividend Yields are:

  1. Franklin Resources: 6.2%

  2. Realty Income: 6.0%

  3. Amcor plc: 5.4%

  4. Chevron: 4.5%

  5. T. Rowe Price: 4.3%

Dividend Yield Formula: How to Calculate Dividend Yield - Personal ...
Source: Personal Finance Library

Highest Dividend Growth Rate

  1. Cintas: 20.5%

  2. Lowe’s Companies: 19.3%

  3. Sherwin-Williams: 16.1%

  4. Nordson Corporation: 16.0%

  5. Abbott Laboratories: 12.7%

What is CAGR | Compound Annual Growth Rate Definition
Source: fendiharis

Highest EPS Growth Rate

  1. Ecolab: 16.6%

  2. Stanley Black & Decker: 15.8%

  3. C.H. Robinson Worldwide: 15.3%

  4. S&P Global: 14.6%

  5. Pentair plc: 14.4%

Earnings Per Share (EPS): What It Means and How to Calculate It, net ...
Source: Investopedia

Starting with yields and growth rates is a good approach.

But I took it further.

I analyzed all 66 companies using an Earnings Growth Model and Reverse DDM.

I also considered the starting yield, historical dividend growth rate, and expected EPS growth rate for each one.

Using these criteria and the quality of the businesses, I selected 5 of my favorites.

The Aristocrats are a good starting point for dividend investors.

But I think these 5 companies offer some of the best opportunities.

The Earnings Growth Model says that these companies have an expected return of more than 10% per year.

The dividend growth rate from the Reverse DDM is also lower than the growth rate from the past five years for each company.

Ready to see what they are?

Let’s dive in!

5. Abbott Laboratories

Abbott makes and sells medical products, like tests for diseases, medication, and nutrition products.

Why is it an interesting company?

  • They’re positioned to take advantage of the aging population

  • Abbott has a strong balance sheet with a Debt/Equity of 38%

  • They offer a reasonable starting Dividend Yield, strong dividend growth, and attractive DPS growth

Here’s the revenue and net income for the past 10 years:

Source: Finchat

Valuation

  • Dividend Yield: 2.1% (5-year average 1.6%)

  • Earnings Growth Model: expected return of 10.3% per year

  • Reverse DDM: Abbott needs to grow the dividend by 7.9% per year.

    • 5-year DPS CAGR: 12.7%


4. Automatic Data Processing

ADP makes money by providing payroll and human resources software and services to businesses, helping them manage employee payments and benefits.

They charge companies recurring fees for these services, making it easier for businesses to handle their staff and save time.

Source: ADP Investor Relations

Why is it an interesting company?

  • ADP is a market leader in a growing market

  • The management is committed to returning capital to shareholders

  • ADP has very stable revenue and income growth

Source: Finchat

Valuation

  • Dividend Yield: 2.1% (5-year average 2.2%)

  • Earnings Growth Model: expected return of 10.7% per year

  • Reverse DDM: ADP needs to grow the dividend by 7.8% per year.

    • 5-year DPS CAGR: 12.4%


3.PPG Industries (PPG)

Business description

PPG is the largest paints and coatings company in the world.

They make paints, coatings, and specialty materials used in homes, cars, and buildings.

Source: PPG Investor Relations

Why is PPG interesting?

PPG operates in a oligopoly with Sherwin-Williams and Dutch paint company Akzo Nobel.

PPG has a strong track record of dividend growth, makes a necessary product, and has advantages in their brand as well as their size and scale .

Source: Finchat

Valuation

  • Dividend Yield: 2.2% (5-year average 1.6%)

  • Earnings Growth Model: expected return of 12.2% per year

  • Reverse DDM: PPG needs to grow the dividend by 7.8% per year.

    • 5-year DPS CAGR: 6.2%


2. Sysco

Sysco is the largest foodservice distributor offering a wide range of food and related products to restaurants and institutions.

Why is it an interesting company?

  • Sysco’s size gives it economies of scale, and the ability to service a lot of customers like restaurants, schools, and healthcare facilities

  • Their supply chain is large and reliable, which is important to food service customers

  • People are eating more food away from home, which should benefit Sysco

Source: Finchat

Valuation

  • Dividend Yield: 2.7% (5-year average 2.7%)

  • Earnings Growth Model: expected return of 10.2% per year

  • Reverse DDM: Sysco needs to grow its dividend by 7.2% per year.

    • 5-year DPS CAGR: 5.2%


1. Nordson Corporation

Nordson Corporation makes specialized equipment that helps other companies with packaging, coating, and sealing products.

Their equipment dispenses and applies adhesives, coatings, polymers, sealants, biomaterials, and other fluids.

Why is it an interesting company?

  • Nordson is a Dividend King with 61 years of dividend growth

  • They’re a successful serial acquirer

  • Nordson has global infrastructure and deep relationships with their customers

Source: Finchat

Valuation

  • Dividend Yield: 1.5% (5-year average 1.0%)

  • Earnings Growth Model: expected return of 13.1% per year

  • Reverse DDM: Nordson needs to grow the dividend by 8.3% per year.

    • 5-year DPS CAGR: 16.0%

Conclusion

That’s it for today!

Here are the five Dividend Aristocrats I think are interesting:

  • Abbott Labs: Strong balance sheet ready to benefit from the aging population

  • ADP: A leader in a growing market

  • PPG: A necessary industrial supplier in an oligopoly

  • Sysco: A dominant food distributor benefiting from changing trends

  • Nordson Corporation: Successful serial acquirer in a specialized market

One Dividend At A Time
TJ

Are you ready to get all of my investing ideas as well as full access to the Compounding Dividends Portfolio?

Become a paid partner with the link below and you’ll get 20% off for your first year:

Get 20% off for 1 year

Used sources

  • Interactive Brokers: Portfolio data and executing all transactions

  • Finchat: Financial data

Disclaimer

As a reader of Compounding Dividends, you agree with our disclaimer. You can read the full disclaimer here.
David Vance's avatar
1 Like
1

Share this post

Compounding Dividends
Compounding Dividends
All Dividend Aristocrats + 5 of My Favorites
Share
Should You Buy Novo Nordisk?
Novo Nordisk’s stock is down over 50% from its 2024 peak. CEO ousted. Trial results missed. Eli Lilly gaining ground. But are these short-term…
Jun 7 â€¢ 
TJ Terwilliger
30

Share this post

Compounding Dividends
Compounding Dividends
Should You Buy Novo Nordisk?
Buy-Hold-Sell List Update May 2025
The Compounding Dividends Portfolio is up 12.06% since November—while the S&P 500 is flat. I’m not trying to beat the market. I’m aiming for $5K/month…
Jun 4 â€¢ 
TJ Terwilliger
19

Share this post

Compounding Dividends
Compounding Dividends
Buy-Hold-Sell List Update May 2025
2
🔥 Stock Idea: PayPal
PayPal is eating itself alive… and that’s a good thing. Is PayPal still a powerhouse in digital payments, or is competition eating into its dominance…
Mar 8 â€¢ 
TJ Terwilliger
64

Share this post

Compounding Dividends
Compounding Dividends
🔥 Stock Idea: PayPal
2

Ready for more?

© 2025 Compounding Dividends
Privacy ∙ Terms ∙ Collection notice
Start writingGet the app
Substack is the home for great culture

Share