4 Dividend Aristocrats That Could Jump Up to 35%, According to Wall Street

Since the economic outlook is uncertain, analysts do not expect the Fed to raise interest rates significantly this year. However, the end of the prolonged ultra-low interest rate environment has made investors anxious. The Russia-Ukraine war is also expected to continue dampening investor sentiment. However…

with the latest diplomatic talks between Ukraine and Russia, oil prices have declined. So, given the current market uncertainty, we think it could be wise to bet on fundamentally strong dividend stocks.

With robust financials and a solid record of consistent dividend growth, dividend aristocrats are the best choices for investors amid uncertain market conditions. Investors’ interest in this space is evident in the ProShares S&P 500 Dividend Aristocrats ETF’s (NOBL) 7.7% returns over the past year.

Wall Street analysts expect dividend aristocrats The Sherwin-Williams Company (SHW – Get Rating), PPG Industries, Inc. (PPG – Get Rating), Stanley Black & Decker, Inc. (SWK – Get Rating), and Albemarle Corporation (ALB – Get Rating) to rally by more than 35% in price in the coming months. So, these stocks could be good additions to one’s watchlist.

The Sherwin-Williams Company (SHW – Get Rating)

SHW in Cleveland, Ohio, develops, manufactures, distributes paints, coatings, and related products to professional, industrial, commercial, and retail customers. It has three segments: The Americas Group; Consumer Brands Group; and Performance Coatings Group.

On Jan. 27, 2022, Chairman, President, and CEO John G. Morikis, said, “Our full year and fourth quarter were marked by industry-wide supply chain disruptions, unprecedented cost inflation, and ongoing challenges related to the pandemic. The 61,000 dedicated employees of Sherwin-Williams refused to use these challenges as an excuse but rather as an opportunity to get even closer to our customers. We focused on minimizing the impact to their businesses through innovation, value-added services, and differentiated distribution.”

SHW has been paying and increasing its dividend payment consecutively for more than 40 years. Over the past three years, its dividend payouts have grown at a 22.1% CAGR. SHW’s four-year average dividend yield is 0.79%. Its current dividend translates to a 1.01% yield.

For the fiscal fourth quarter, ended Dec. 31, 2021, SHW’s net sales increased 6.1% year-over-year to $4.76 billion. In addition, the company’s total current assets came in at $5.05 billion for the period ended Dec. 31, 2021, versus $4.59 billion for the period ended Dec. 31, 2020. Also, its total assets came in at $20.67 billion compared to $20.40 billion for the same period.

SHW’s revenue is expected to be  $21.74 billion in its fiscal year 2022, representing a 9% year-over-year rise. The company’s EPS is expected to increase 18.2% year-over-year to $11.15 in 2023. The stock has gained 1.4% in price over the past year to close yesterday’s session at $242.44. Wall Street analysts expect the stock to hit $331.47 in the near term, which indicates a potential 36.7% upside.

PPG Industries, Inc. (PPG – Get Rating)

PPG manufactures and distributes paints, coatings, and specialty materials worldwide. The Pittsburgh. Pa., company’s segments are Performance Coatings and Industrial Coatings, and it operates and innovates in more than 75 countries worldwide.

On Jan. 20, 2022, Michael H. McGarry, PPG chairman and CEO, said, “Strategically, we made progress in strengthening the company with the successful integration of five acquisitions and further optimizing our cost structure, including $135 million of cost savings from our restructuring programs. We continued to reward our shareholders by extending our consecutive annual dividend payments to over 120 years, including raising our annual dividend payout for the 50th successive year.”

PPG has been paying and increasing its dividend payments consecutively for more than 45 years. PPG’s dividend payouts have grown at a 6.9% CAGR over the last three years and at a CAGR of 7.6% in the past five years. While PPG’s four-year average dividend yield is 1.64%, its current dividend translates to a 1.94% yield.

For the fourth quarter, ended Dec. 31, 2021, PPG’s net sales increased 11.5% year-over-year to $4.19 billion. The company’s net income came in at $286 million, up 5.1% year-over-year, while its EPS came in at $1.20, up 5.3% per annum.

Analysts expect PPG’s revenue to increase 10% to $18.49 billion in 2022. Its EPS is estimated to grow 22% to $9 in 2023. It surpassed EPS estimates in three of the four trailing quarters. And the stock closed yesterday’s trading session at $123.37. Wall Street analysts expect the stock to hit $175.38 in the near term, which indicates a potential 42.2% upside.

Stanley Black & Decker, Inc. (SWK – Get Rating)

SWK engages in the tools and storage and industrial businesses in the United States, Canada, rest of Americas, France, rest of Europe, and Asia. The New Britain, Conn.-based company operates through the Tools and Storage segment and Industrial segment.

On Feb. 1, 2022, SWK’s CEO Jim Loree said, “We completed 2021 with a series of strategic transactions that…

 

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