Year 2024 has stood out for Wall Street, delivering remarkable gains for investors. The S&P 500 has grown an impressive 26.2%, whereas the Dow Jones Industrial Average has climbed 14.1%, underscoring a robust market rally.
Yet, recent market turbulence has reminded investors of the inherent volatility in financial markets. Over the past month, the S&P 500 has edged down 0.7%, and the Dow Jones Industrial Average has seen a steeper decline of 4.1%. As we turn the corner into 2025, this heightened uncertainty underscores the importance of resilience in the portfolio strategy.
Amid such volatility, dividend aristocrats stand out as prudent choices for investors. For income-focused investors, dividend aristocrats are undeniable cornerstones for building a reliable portfolio. These elite companies have demonstrated unmatched financial discipline by raising dividends for at least 25 consecutive years, underscoring their resilience and commitment to shareholders. The dividends of these stocks are not only consistent but highly secure, making them dependable sources of income even in uncertain economic climates.
In 2025, with the possibility of fluctuating interest rates and economic uncertainties, dividend aristocrats remain a must-have for investors prioritizing stability. Those seeking a steady income stream can consider stocks like Atmos Energy Corporation ATO, Brown & Brown, Inc. BRO and Cintas Corporation CTAS for the portfolio.
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Atmos Energy: The company is engaged in regulated natural gas distribution and storage business. It has raised its annual dividend for 40 consecutive years and paid out quarterly dividends for 164 years. Currently, its quarterly dividend is 87 cents per share.
ATO continues to benefit from rising demand for natural gas, courtesy of an expanding customer base. Atmos Energy’s long-term investment plan should further increase the reliability of its natural gas pipelines. The company gains from industrial customer additions and constructive rate outcomes.
Atmos Energy has a dividend yield of 2.5%. ATO’s payout ratio is 47, with a five-year dividend growth rate of 8.4%. The Zacks Consensus Estimate for its fiscal 2025 earnings has increased 0.3% over the past 60 days. The company’s expected year-over-year earnings growth rate for fiscal 2025 is pegged at 5%. Shares of the Zacks Rank #2 (Buy) company have gained 20.2% in 2024. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Brown & Brown: The company markets and sells insurance products and services primarily in the United States, as well as London, Bermuda and the Cayman Islands. The strong capital and liquidity position enables BRO to distribute wealth to shareholders via dividend increases and share buybacks. The company increased dividends in the last 31 years.
Brown & Brown’s compelling portfolio, along with an impressive growth trajectory, driven by organic and inorganic initiatives across all its segments, bodes well. Buyouts and collaborations have enhanced its existing capabilities and extended its geographic foothold.
BRO has a dividend yield of 0.6%. The company’s payout ratio is 15, with a five-year dividend growth rate of 10.8%. The Zacks Consensus Estimate for its 2025 earnings has increased 2.2% over the past 60 days. Brown & Brown’s expected year-over-year earnings growth for 2025 is 9.6%. Shares of the Zacks Rank #2 company have gained 44.7% in 2024.
Cintas: The company designs, manufactures and implements corporate identity uniform programs, and provides entrance mats, restroom supplies, promotional products, and first aid and safety products for diversified businesses. Cintas has consistently raised its dividends for 40 straight years.
CTAS is well-positioned to benefit from the solid momentum across its segments. The penetration of additional products and services into existing customers is aiding the Uniform Rental and Facility Services segment. Improved demand for AED Rentals and WaterBreak products is driving the First Aid and Safety Services segment.
Cintas has a dividend yield of 0.9%. CTAS’s payout ratio is 38, with a five-year dividend growth rate of 21.2%. The Zacks Consensus Estimate for its fiscal 2025 earnings has increased 1.9% over the past 30 days. The company’s expected year-over-year earnings growth for fiscal 2025 is 13.7%. Shares of the Zacks Rank #2 company have gained 21.7% in 2024.
