10 Best Dividend Aristocrat Stocks for November 2017

Happy November!

The haunted houses are coming down. All the skeletons are going back in the closet for another year.

The candy is quickly disappearing and, for those with kids, that’s a very good thing.

Fall is in full swing and that means the holiday season is around the corner.

It’s time to start getting ready for every foodies favorite time of year, Thanksgiving!

But first, let’s get to the best dividend aristocrat stocks for November.

We have a couple new additions to the list.

Let’s see who they are...

10 Best Dividend Aristocrat Stocks for November 2017

10. Sherwin-Williams Co (SHW)

Payout Ratio: 24.2%

5-Year Historical EPS Growth: 18.2%

Dividend Growth Streak: 39 Years

Dividend Yield: 0.87%

5-Year Dividend Growth: 17.1%

Sector: Basic Materials

Sherwin Williams, SHW, a dividend aristocrat

The housing recovery since 2007 has been good for a lot of companies, but possibly none more than Sherwin-Williams.

Founded by Henry Sherwin and Edward Williams, the company has been around for over 150 years.Started in 1866 in Cleveland, Ohio, the company operates through four segments:

  • Paint Stores
  • Consumer Group
  • Latin America Coatings Group
  • Global Finishes Group

Most people in the US know Sherwin-Williams for their paint stores. It was the first section of the company established back in the 1880s and is still the backbone of the company.

The stores market and sell Sherwin-Williams branded paints and coatings.

In 2016, the paint stores group operated 4,080 stores across the country.

The same year, Sherwin-Williams topped $11 billion in sales.

It’s no surprise the paint stores group is the main driver of those sales, taking up 68% of that $11 billion.

Consumer Group and the Global Finishes Group both have around 15% of sales. Latin America Coatings sits at around 4%.

Future Growth Potential

Being so reliant on paint store sales means they also swing with the housing economy.

When new homes are being built or remodeled and the economy is doing well, Sherwin is doing well.

If the economy isn’t doing well, Sherwin isn’t doing very well.

This can be said for most companies, but it is especially true with Sherwin-Williams.

Beyond that, the company still has plenty of growth opportunities.

They’re working to expand into China and India and tap into their booming middle classes.

9. Ecolab Inc. (ECL)

Payout Ratio: 31.2%

5-Year Historical EPS Growth: 9.91%

Dividend Growth Streak: 25 Years

Dividend Yield: 1.13%

5-Year Dividend Growth: 12.2%

Sector: Basic Materials

Ecolab, ECL, a dividend aristocrat

Ecolab started as Economics Laboratory in 1923. Their original product was Absorbit, a product designed to quickly clean carpets in hotel rooms.

That was soon followed by Soilax, a dishwasher soap.

Throughout much of the next 30 years, Economics Laboratory dealt with dishwasher cleaning, maintenance, and repair.

From the 50s on through the 80s, the company expanded globally and increased their product offerings.

They pioneered the concept of pest elimination. They also started offering products to clean pipes at dairy factories without any hand washing.

In 1986, the company changed their name to Ecolab and went public.

It has continued its global expansion and broadened its focus through to today.

Ecolab is now a provider of water, hygiene, energy technologies.

They offer services to the food, energy, healthcare, industrial, and hospitality markets.

All told, they do a lot for a lot of different companies.

The company has four main principles

  • Clean water
  • Safe food
  • Abundant energy
  • Healthy environment.

Those four principles guide everything Ecolabs does.

They operate in three major business segments: global industrial, global institutional, and global energy. All are about the same in size.

Global industrial focuses on water treatment, cleaning, and sanitation for industrial customers.

Global institutional specializes in cleaning and sanitation products for foodservice, hospitality, lodging, healthcare, and retail industries. Products for housekeeping and general food safety.

Global energy operates under the Nalco Champion name. Nalco and Ecolab merged in July of 2011 and became a wholly owned subsidiary of Ecolab.

It serves the treatment needs of global petroleum and petrochemical industries.

Future Growth Potential

Like other companies with significant global exposure, Ecolab’s growth can fluctuate with changes in currency value.

But, fluctuating currency values is no reason to stay away from a great company.

Approximately 25% of Ecolab’s annual revenue comes from Asia, Latin America, the Middle East, and Africa.

If they can continue to increase that number and ride the growth in China and India, Ecolab will continue to be a Dividend Aristocrat for years to come.

8. General Dynamics (GD)

Payout Ratio: 29.5%

5-Year Historical EPS Growth: 11.6%

Dividend Growth Streak: 26 Years

Dividend Yield: 1.65%

5-Year Dividend Growth: 10.9%

Sector: Industrials

General Dynamics Logo

The history of General Dynamics goes back to 1896 where they developed the first U.S Navy submarine in Elizabethport, New Jersey.

Back then the company was ran by John Philip Holland and known as the Holland Torpedo Boat Company.

Dubbed the Holland VI, the revolutionary sub launched in May of 1897 and commissioned by the Navy in October of 1900.

The Navy loved the revolutionary boat so much they placed an order for more. Holland grew short on funds to build the boats so he had to sell his interest to a financier named Isaac Leopold Rice.

Rice renamed the company the Electric Boat Company.
Electric Boat took full advantage of wars around the world. They began selling submarines to Japan, Russia, England, and the Netherlands.

During the post-World War II wind-down, Electric Boat was flush with cash and started to look for ways to diversify.

They bought Canadair for $10 million in 1946 and entered the plane production business.

Canadair continued to operate as a separate entity, eventually winning the Canadian military contract for the Royal Canadian Air Force.

As Canadair continued to grow, it made no sense to continue operating under the Electric Boat Company.

On April 24, 1952, Electric Boat reorganized as General Dynamics.

General Dynamics sold Canadair back to the Canadian government in 1976 for $38 million.

They’ve been a major defense contractor for the United States ever since.

Future Growth Potential

General Dynamics operates under four main business segments:

  • Aerospace
  • Combat Systems
  • Information Systems and Technology
  • Marine Systems

The nice thing about being a defense contractor is their is a steady flow of orders coming in from the government.

Such is the case with General Dynamics. There is a huge amount of work that will keep the company growing into the future.

The total value of the backlog is in the range of $85 million and spread across the various segments.

This backlog of work will be the driver of General Dynamics’ growth over the next few years.

The company will also take advantage of the new administration. Trump is expected to increase military spending somewhere between $500 billion and $1 trillion.

A large share of that will flow into General Dynamics.

As long as there is a need for defense spending by governments, General Dynamics is in a good position to reap the benefits.

7. Walgreens Boots Alliance (WBA)

Payout Ratio: 29.9%

5-Year Historical EPS Growth: 14.8%

Dividend Growth Streak: 41 Years

Dividend Yield: 2.4%

5-Year Dividend Growth: 7.44%

Sector: Consumer Defensive

Walgreens Boots Alliance, a dividend aristocrat stock

Walgreens Boots Alliance may seem a little weird when you first read it.

Most of us in the United States think of Walgreens as a pharmacy store. They offer other small other essential items, but mainly it’s known for the drive-thru pharmacy.

Where does this whole “boots” thing come into play? They make shoes?

No, they don’t.

Walgreens Boots Alliance came about from the merger of Walgreens and Alliance Boots out of Switzerland.

Walgreens had previously purchased 45% of the company in 2012 and increased that stake to 55% in December of 2014.

Walgreens began in 1901 as a small corner drug store in Chicago that owned by Charles Walgreen.

By 1913, Walgreens had grown to four stores on Chicago’s South Side.

Prohibition was actually a successful time in Walgreens history. While alcohol was illegal, prescription whiskey was available and sold by Walgreens.

By the mid-1920s there were 44 stores with annual sales of $1.2 million.

Stores continued to pop up throughout the century with various acquisitions thrown in along the way.

By 2011, Walgreens had over 8,000 stores and was expanding into Guam and Puerto Rico.

To expand globally, Walgreens acquired Alliance Boots and has since become a global behemoth.

Future Growth Potential

The acquisition of Boots created a global company that has done very well for itself.

Revenue in 2016 was over $117 billion.

The company now operates in three divisions: Retail Pharmacy USA, Retail Pharmacy International, and Pharmaceutical Wholesale.

Boots pharmacies are about as well known in the UK as Walgreens are in the United States.

Boots branded stores are also in the United Arab Emirates, Bahrain, Norway, LIthuania, The Netherlands, and Thailand.

The merger of Walgreens and Boots improved growth and the hope is the same will happen with the acquisition of Rite Aid.

Walgreens announced in 2015 the purchase of Rite Aid for $17.2 billion. The Federal Trade Commission approved the buy in September of 2017.

But, things didn't go as planned. The deal fell apart and Walgreens ended up buying over 2,000 stores from Rite Aid.

Walgreens Boots Alliance isn’t resting on its previous success, though. They're out there looking for new buying opportunities.

Which means this dividend aristocrat stock is in a prime "buy" situation.

6. Cardinal Health Inc (CAH)

Payout Ratio: 33.4%

5-Year Historical EPS Growth: 10.9%

Dividend Growth Streak: 31 Years

Dividend Yield: 3.03%

5-Year Dividend Growth: 12.7%

Sector: Healthcare

Cardinal Health, CAH, a dividend aristocrat

Cardinal Health is one of the younger companies in the list of Dividend Aristocrats.

Founded in 1971 in Dublin, Ohio, Cardinal specializes in the distribution of pharmaceuticals and medical products. They serve more than 100,000 locations across the globe.

They weren’t always a healthcare company, though.

In 1971, Cardinal Health was Cardinal Foods and was a food wholesaler. The acquisition of Bailey Drug Company in 1979 started the transition to wholesaling drugs.

The company went public in 1983 as Cardinal Distribution.

From 1991 to 1996, the company grew from $1.2 billion to $8.9 billion.

They are one of a handful of large U.S. companies that achieved earnings-per-share growth over 20% for 15 years straight.

The company changed their name to Cardinal Health in 1994.

In 2016 their revenue reached $121.5 billion.

Cardinal Health was able to grow so quickly because of their large and very profitable business model.

Cardinal Health provides medical products to over 75% of the hospitals in the United States.

It also teamed with CVS in 2013 to become the largest generic drug sourcing operation in the United States.

Things haven’t been all sunshine for the company over the last five to ten years.

They lost a major contract to Walgreen Boots Alliance and the recession of 2007 didn’t help either.

Yet, during all the turmoil, they were still able to grow earnings-per-share 1.5% over the last century.

Future Growth Potential

Things should be smoother going forward.

Cardinal Health looks to capitalize on the aging US population.

They’ve also made some major acquisitions.

Those buys have boosted their distribution in the pharmaceutical and medical distribution.

These include Cordis in 2015, Tradex International in 2015, and, most recently, Medtronic in early 2017.

An aging population paired with smart expansion leads to a bright future for Cardinal Health.

5. AbbVie Inc. (ABBV)

Payout Ratio: 42.9%

5-Year Historical EPS Growth: 12.1%

Dividend Growth Streak: 44 Years

Dividend Yield: 2.81%

5-Year Dividend Growth: 13.3%

Sector: Healthcare

AbbVie, ABBV, Logo

On October 19, 2011, Dividend Aristocrat Abbott Laboratories announced its plan to split. They would become two separate companies, each with a different direction.

Abbott Labs would focus on medical devices, diagnostic equipment, and nutrition.

The newly created organization would focus on research-based pharmaceuticals. That new company would be AbbVie.

To understand the history of AbbVie, you need to understand the history of Abbott Labs.

Abbott Labs was founded in 1888 by Wallace Abbott at the age of 30. He’d graduated from the University of Michigan and was a practicing physician and pharmacist.

He developed a process to use the active part of medicinal plants for medicine. The active element is usually an alkaloid so the company became Abbott Alkaloidal Company.

Examples of alkaloids derived from plants would be morphine, strychnine, or codeine.

Abbott expanded outside the United States in 1907 with an affiliate in London.

Expansion continued in 1962 when Abbott entered into a joint venture with Dainippon Pharmaceutical in Osaka, Japan.

The next 50 years saw Abbott Labs grow through acquisitions until 2011 when the company decided to split.

The split became effective January 1, 2013 and AbbVie was officially listed on the New York Stock Exchange.

Some thought the AbbVie creation was to shield Abbott’s device business from the potential losses facing the drug division.

That thought proved wrong as the company earned over $25 billion in revenue in 2016.

AbbVie has used the same model as Abbott since their 2013 split to grow through mergers and acquisitions.

Future Growth Potential

AbbVie technically can’t be a Dividend Aristocrat because it hasn’t been around for 25 years.

Because it’s a spinoff of Abbott, everyone applies Abbott’s dividend history to AbbVie.

And to AbbVie’s credit, they’ve been continuing to raise their dividends every year since 2013.

The concerns surrounding AbbVie’s split from Abbott are still valid.

Most healthcare companies like having pharmaceuticals tied to medical devices. The device business can even-out the ups and downs of drug revenue.

But, AbbVie isn’t going that route. They’re a pure play pharmaceutical company.

Humira is the bread and butter of AbbVie. Revenue from the drug is expected to reach $18 billion by 2020.

Luckily, the company plans to generate between $25-30 billion by that year from a host of new drug launches.

AbbVie also acquired Pharmacyclics and their top offering, Imbruvica.

Many think Imbruvica has the potential to become AbbVie’s next $1 billion dollar offering.

While the pharmaceutical industry can have more ups and downs than most, the future of AbbVie looks to be up.

4. C.R. Bard Inc. (BCR)

Payout Ratio: 8.64%

5-Year Historical EPS Growth: 15.8%

Dividend Growth Streak: 45 Years

Dividend Yield: 0.31%

5-Year Dividend Growth: 6.62%

Sector: Healthcare

C.R. Bard, BCR, a dividend aristocrat

C. R. Bard decided to drop the “C. R.” and is now simply known as Bard.

Charles Russell Bard started the company in 1907. In the beginning, he imported a European cure all called Gomenal to the United States.

Gomenal had cured Bard’s urinary discomfort from tuberculosis. He thought others could experience the same benefit.

In 1934, Bard became the exclusive dealer of the Foley catheter. The first latex catheter ever created.

From there, Bard has grown into a global leader in the medical field.

Bard is a leading multinational manufacturer and marketer of medical equipment and supplies.

They design, manufacture, package, distribute and sell medical, surgical, diagnostic and patient care devices.

The product offerings are wide ranging. They sell to hospitals, individual healthcare professionals, extended care facilities and many other medical sites across the globe.

Bard operates in four main segments: vascular, urology, oncology, and surgical specialties.

None of the segments command more than 28% of the company’s total revenue.

Future Growth Potential

With an aging population, Bard finds themselves in a very good position to continue their run as a dividend aristocrat.

As a global healthcare supplier, the older people get around the globe, the more demand there is for Bard’s products.

In the US alone, the demand from Baby Boomers is going to increase Bard’s revenue.

China is another market that Bard is targeting for expansion due to their growing middle class.

3. Cintas Corporation (CTAS)

Payout Ratio: 27.0%

5-Year Historical EPS Growth: 17.2%

Dividend Growth Streak: 34 Years

Dividend Yield: 0.9%

5-Year Dividend Growth: 18.6%

Sector: Industrials

Cintas, CTS, a dividend aristocrat

When we think about the operation of a business, we don’t always consider the amount of cleaning that goes on at the business itself.

Uniforms need washing, bathrooms cleaned, carpets need cleaning…the list could go on.

Someone needs to do it and that is where Cintas comes in.

Cintas Corporation began in 1929 as the Acme Industrial Company.

The founder, Richard Farmer, collected chemical soaked rags from factories, washed them, and returned them for a fee.

In the 1940s, shop towels and table cloths replaced rags.

By the 1960s, Richard’s grandson had an idea to open small uniform rental plants across the country.

The rental plants would provide uniforms to businesses as well as collect, wash, and return them.

In October of 1968, the first uniform rental plant opened in Cleveland, Ohio.

Since then, it’s been nothing but up for Cintas.

They went public in 1983 and have been growing ever since.

The company has three main businesses: Uniform Rental and Facility Services, First Aid and Safety Services, and “All Other.”

Uniform rental is roughly 77% of Cintas’ sales. First aid makes up 9% and the other 14% makes up “all other.”

Roughly 30% of the market share in uniforms belongs to Cintas.

In 2016, the company brought in almost $5 billion in revenue.

Future Growth Potential

A majority of their recent growth has come from acquisitions of more than 220 companies.

Acquisitions and cost cutting will continue to be the cause of Cintas’ growth.

They sold interest in Shred-It International due to the reduction in paper use by companies and acquired G&K Services.

G&K Services will add almost $1 billion in annual revenue and give Cintas an even stronger hold on the branded uniform business.

This dividend aristocrat has increased its dividend for 34 consecutive years. It doesn't look like they'll be stopping anytime soon.

2. Hormel Foods Corp (HRL)

Payout Ratio: 35.8%

5-Year Historical EPS Growth: 15.48%

Dividend Growth Streak: 51 Years

Dividend Yield: 2.16%

5-Year Dividend Growth: 19.2%

Sector: Consumer Defensive

Hormel, HRL, a dividend aristocrat

George A. Hormel worked in a Chicago slaughterhouse before becoming a traveling wool and hide buyer.

His travels took him to Austin where he borrowed $500 and started a meat business for himself.

In 1891 he opened George A. Hormel & Co. in an old creamery building in NE Austin.

By the end of 1891, the company had six employees and sold 610 head of livestock. By the end of 1893, they’d processed 1,532 hogs.

During the first 10 years of the 1900s, Hormel opened distribution centers in St. Paul, Minneapolis, Duluth, San Antonio, Dallas, Chicago, Atlanta, and Birmingham.

George traveled to England in 1905 and soon after started exporting his meats overseas.

In 1926, the company introduced the first ever canned ham called Hormel Flavor-Sealed Ham.

It continued to expand its food offerings and now generates over $9 billion in annual sales.

Hormel operates in five different segments: Refrigerated Foods, Jennie-O Turkey, Grocery Products, Specialty Foods, International & Other.

Refrigerated foods lead the pack with 50% of sales. That’s followed by Jennie-O Turkey with 18% and Grocery Products at 17%.

Wander the grocery store isles and some of the most recognizable brands Hormel owns: Skippy Peanut Butter, Spam, Dinty Moore, Muscle Milk, Jennie-O, and on and on.

Brands offered by Hormel

Future Growth Potential

Hormel’s long history on the list of dividend aristocrats is due to its ability to adapt and change with consumer tastes.

The business grew in the early 20th century because Hormel recognized people’s love of pork.

Today it’s taking advantage of the shift to turkey. Consumers have become very health conscious and prefer less red meat.

The acquisition of Jennie-O in 2001 proves the strong leadership and vision the Hormel has.

That same vision and adaptability will continue to fuel Hormel’s growth.

In 2014, Hormel acquired CytoSport Holdings which is the maker of MuscleMilk.

Applegate Farms was acquired in 2015 because of their organic prepared meats. It’s the number one brand in the natural and organic meat category.

As consumers become more health conscious, Hormel will continue to get more health focused properties.

1. Lowe's Companies (LOW)

Payout Ratio: 30.7%

5-Year Historical EPS Growth: 22.1%

Dividend Growth Streak: 55 Years

Dividend Yield: 2.14%

5-Year Dividend Growth: 22.5%

Sector: Consumer Cyclical

Lowe's, LOW, a dividend aristocrat

If you own any sort of property or do any kind of at-home projects, there is a good bet you’ve been to Lowe’s.

The first Lowe’s store opened in North Wilkesboro, North Carolina by Lucius Smith Lowe in 1929. The store was called Lowe’s North Wilkesboro Hardware.

After the death of Lucius in 1940, his son Jim took over with Carl Buchan as a partner.

Buchan anticipated an increase in construction following the end of World War 2. He focused the store on hardware and building material.

Up until then, the store had included dry goods, horse tack, snuff, produce and groceries.

Lowe and Buchan had different ideas for expansion, though.

In 1952, Buchan took control of the hardware and building supply business. Lowe took control of various other joint ventures they controlled.

Buchan became the sole owner of Lowe’s.

By 1955, Buchan had opened up stores across North Carolina. By 1961 Lowe’s operated 21 stores and had annual revenues of $32 million.

The company began trading on the New York Stock Exchange in 1979.

Lowe’s had some rough times in the 1980s due to the popularity of Home Depot and the shift to big-box stores.

Lowe’s was slow to adapt but eventually adopted the new style and has been growing ever since.

In 1999, Lowe’s bought the Renton, Washington based Eagle Hardware & Garden. This fueled their national growth even further.

Future Growth Potential

Not only is Lowe’s part of the dividend aristocrats, it holds a spot on the exclusive list of Dividend Kings. To be a Dividend King, a stock must have 50+ years of consecutive dividend increases.

Lowe’s has used the post-2007 housing collapse to fuel its growth.

They’ve focused on allocating capital to only the highest value opportunities. One of which has been on digital sales.

New stores continue to open and they’ve begun refurbishing existing ones.

The company is also expanding internationally after the acquisition of Canadian home improvement retailer Rona.

Conclusion

Lowe's hangs on to the top spot in November's top 10 Dividend Aristocrats stock report.

AbbVie and General Dynamics both made their first appearances on the list.

As a recap, here are the top 10:

  1. Lowe's
  2. Hormel Foods
  3. Cintas Corporation
  4. C.R. Bard Inc.
  5. AbbVie Inc.
  6. Cardinal Health Inc.
  7. Walgreens Boots Alliance
  8. General Dynamics
  9. Ecolab Inc.
  10. Sherwin-Williams Co.

Have a great November and Happy Thanksgiving!

Are any of these on your watchlist?  Do you have any other Dividend Aristocrat Stocks you're keeping an eye on?

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