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Bargain Dividend Aristocrats: Stocks with Strong Payout Growth
Investors seeking reliable income opportunities may want to eye dividend aristocrats, a select group of companies that have consistently raised payouts for at least 25 consecutive years. These stocks are currently trading at attractive valuations amid recent market lags.
"After recent underperformance, Dividend Aristocrats’ relative PE vs. the S&P 500 is at a historically inexpensive ~0.83x with a dividend yield of ~2.5%," Wolfe analyst Chris Senyek wrote in a Tuesday research note.
He points to the category's defensive tilt as the culprit behind the dip, with heavy allocations to consumer staples, industrials, and financials—making up the bulk of holdings—while technology exposure sits at a mere 3%.
Senyek views this as his top defensive play, though he stresses its versatility across various market conditions. To spotlight the best bets, his team screened for 30 aristocrats blending three key traits: aristocrat status, last-12-month dividend growth outpacing the broader market, and placement in the second quintile of yield (roughly 1.8% to 2.5%).
Among the standouts fitting all criteria are Becton Dickinson (BDX), Abbott Laboratories (ABT), and General Dynamics (GD).
Tim Cook said:
“AR will be as big as smartphones — it’s a question of who builds the ecosystem.”
Apple has poured billions into AR. But they won’t own every layer of the ecosystem.
Instead of building hardware, Elf Labs is — turning their own IP — iconic characters like Cinderella & Snow White — into interactive, AI-driven 3D experiences that can live anywhere.
If AR becomes “as big as smartphones,” the companies that own the IP will be the biggest winners.
Elf Labs isn’t experimenting — they’re building the exact layer Tim Cook was talking about.
And early investors still have a window to get in before this ecosystem is priced like the next smartphone boom.
Here's a closer look:
Becton Dickinson (BDX): Yielding 2.19%, the medical tech firm's shares are down 16% year-to-date. Its latest quarterly earnings beat profit forecasts but missed on revenue. Earlier pressures from activist investor Starboard eased in July when Waters Corporation agreed to acquire a spinoff of BDX's bioscience and diagnostics arm. Analysts rate it overweight on average, with 3.7% potential upside to FactSet's consensus price target.
Abbott Laboratories (ABT): With a 1.84% yield, shares are up 11% this year despite softer third-quarter results that underwhelmed on earnings and sales. Momentum picked up in November with a blockbuster $23 billion acquisition of Exact Sciences, maker of the Cologuard colorectal cancer screening test—Abbott's biggest deal in almost a decade, slated to close in Q2 2026. "Exact Sciences’ innovation, its strong brand and customer-focused execution are unrivaled in the cancer diagnostics space, and its presence and strengths are complementary to our own," CEO Robert B. Ford noted. Wall Street's overweight consensus sees 15.4% upside.
General Dynamics (GD): Delivering a 1.81% yield and 27% year-to-date gains, the defense and aerospace giant hiked its full-year earnings outlook in October alongside third-quarter results that topped estimates. "Each of our four segments grew earnings and backlog in the quarter, reflecting solid execution coupled with growing demand," CEO Phebe Novakovic stated. The aerospace unit shone brightest, with 30.3% revenue growth and margin expansion of 100 basis points year-over-year, fueled by robust business jet orders. Analysts' overweight rating implies 14.5% upside per FactSet.
Senyek's picks underscore how aristocrats can blend stability with growth potential, offering income seekers a buffer against volatility while positioning for rebound. For broader exposure, the ProShares S&P 500 Dividend Aristocrats ETF (NOBL) has trailed year-to-date but remains a low-cost entry point.
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