By Ian Salisbury
In a rocky stock market, it is no wonder investors crave steadiness. Focusing on so-called dividend aristocrats is one way to accomplish that and, fortunately, a number of these aristocrats look cheap and have recently raised their dividends.
Dividend aristocrats are companies that have made and raised payouts for at least 25 straight years. Aristocrats that have recently extended their streak for at least one more year include Sysco, Colgate-Palmolive, and Chubb.
Sysco raised its dividend by a penny to 54 cents a share April 17. Colgate also raised its payout by a penny, to 53 cents March 12; and Chubb increased its dividend by 5 cents to $1.02 a share Feb. 26.
While other aristocrats such as Johnson & Johnson and H.B. Fuller have also raised payouts in recent weeks, those have rallied sharply this year and are arguably more expensive.
Food service giant Sysco tumbled sharply in March when it announced plans to acquire restaurant distributor Jetro Restaurant Depot for $29 billion. But it has since regained much of that lost ground, rallying about 10% from its recent March 30 low.
Wall Street analysts forecast earnings growth of just 3% for the current fiscal year, which ends in June. But that should accelerate to more than 9% for the year ending in June 2027. With a dividend yield of 2.9%, investors should be able to count on a total return of more 10% in that year.
Shares which had traded as high as 19 times forward earnings earlier this year, can now be had for around 15 times. While Sysco will be taking on debt as part of its Jetro purchase, the dividend is well covered, eating up only about half of earnings.
Sysco "will maintain its dividends and prioritize its aristocrat status, " predicted J.P. Morgan analyst John Invankoe in an April 12 note. He rates the stock Overweight with a price target of $87, representing upside of about 15% on the current price of $76.
Shares of Colgate-Palmolive, a Barron's pick from October , have tumbled about 12% in the past year, thanks to cost pressure and gloomy consumer sentiment. That has knocked the stock's forward price-to-earnings ratio down to around 21, from more than 25.
While headwinds may persist in the short-term, Colgate's brand power -- it sells more than 40% of the world's toothpaste -- is hard to argue with. Analysts still forecast solid growth of 4% to 6% in the next two years. A 2.5% dividend yield sweetens the deal.
Chubb, the property and casualty insurance company, which is among Berkshire Hathaway's holdings, trades at just 12 times earnings. Analysts expect profit growth of 8% to 9% over the next two years, and the stock boasts a yield of 1.2%.
Write to Ian Salisbury at ian.salisbury@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 21, 2026 10:15 ET (14:15 GMT)
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