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7 Dividend Aristocrat Stocks to Buy in September for Gains and Stability

I’ll start by stating that any month is a great month to buy dividend aristocrat stocks. September is proving to be a volatile month in terms of economic headwinds posed by Covid-19. That has essentially been true for all of 2021, let’s hope 2022 is better.

But that volatility leaves investors searching for stability. That is of course where dividend aristocrat stocks come into the picture: Steady in the best of times and the worst of times. 

We often come across the term “dividend aristocrats” while searching for general investment advice, but what exactly defines this class of stocks?

Most investors know that in order to make the cut, a stock has to have a track record of 25 straight years of dividend increases. In addition, those stocks also have to be members of the S&P 500. I’d venture to guess that most investors didn’t know that there are standards beyond that. 

Dividend aristocrats must also meet a few other requirements including being valued at $3 billion or greater at the point of each quarterly rebalancing. On top of that, companies also have to record an average daily volume of $5 million for each trailing three month period at rebalancing. That means companies can and do fall off the list regularly. 

In 2021 Carrier Global (NYSE:CARR), Otis Worldwide (NYSE:OTIS), and Raytheon (NYSE:RTX) were all removed from the list. 

That should actually give confidence to investors because those that remain have dividend income and potential for capital appreciation. Let’s get into seven such picks right now. 

Amcor (NYSE:AMCR)  Johnson & Johnson (NYSE:JNJ)  Caterpillar (NYSE:CAT) Nucor (NYSE:NUE)  Roper Technologies (NYSE:ROP)  Chevron (NYSE:CVX)  AbbVie (NYSE:ABBV) 

Dividend Aristocrat Stocks for September: Amcor (AMCR)  green beer bottles in a factory line, ready to be sealed. represents packaging companieSource: shutterstock.com/zedspider

Amcor, like almost all companies on this list, operates in an unsexy business: Packaging. Dividend aristocrats are generally old economy companies, so I won’t belabor the point. 

The point here is that Amcor provides packaging solutions across many markets: Beverages, food, healthcare, home care, personal care, pet care, specialty cartons, and technical applications. 

Let’s look at some metrics that matter to dividend investors. In particular, let’s look at Amcor’s growth and its dividend. 

The company’s most recent dividend of 11.8 cents provides a yield of 3.67%, that’s relatively high among the dividend aristocrats. The other thing to note about Amcor is that the AMCR stock has appreciated in price by 9.2% year-to-date. That’s a much higher return than you’ll receive on bonds or a savings account, and quite good in any case. 

Factor in an annualized dividend of 47 cents and that return rises even further. That’s the point with Amcor and the rest of the dividend bearing stocks on this list: Steady, reliable returns around 10% with all factors accounted for. That isn’t an easy feat to achieve even chasing growth stocks. And it’s much, much safer and more reliable.  

The good news is that Amcor is anticipating further growth. Per its most recent earnings report: “Fiscal 2022 outlook: Adjusted EPS growth of 7-11% on a comparable constant currency basis and Adjusted Free Cash Flow of $1.1-$1.2 billion. Allocating approximately $400 million of cash towards share repurchases.”

Johnson & Johnson (JNJ)  jnj healthcare stocksSource: Raihana Asral / Shutterstock.com

Johnson & Johnson is likely the company on this list with the most attention on it. That is of course attributable to its role in the ongoing pandemic. 

The most recent news on that front relates to Covid-19 vaccine booster shots. Officials representing the Pfizer (NYSE:PFE)/BioNTech (NASDAQ:BNTX) vaccine, the Moderna (NASDAQ:MRNA) vaccine, and Johnson & Johnson’s vaccine are all seeking FDA approval for their vaccines as booster shots. 

It is very likely that approval for all three vaccine booster shots will be authorized by mid-September.

That should mean increased revenue at Johnson & Johnson from its pharmaceutical arm, the Janssen subsidiary. 

At this point, it’s almost a foregone conclusion that the JNJ vaccine will be approved as a booster shot. Beyond that, though, investors simply have a reputable dividend stock in Johnson & Johnson. 

The stock’s yield is 2.44% and recently increased from $1.01 to $1.06. So investors can count on between 2% and 3% return from its dividend. JNJ stock has also appreciated in price by 10% YTD, which only helps its appeal. 

Dividend Aristocrat Stocks for September: Caterpillar (CAT)  Image of a yellow construction vehicle with the Caterpillar (CAT) logo on itSource: astudio / Shutterstock.com

Caterpillar is a heavy equipment company, so it’s primed for success with the recent passing of the $1 trillion infrastructure plan in the U.S. Senate. A recent Wall Street Journal article summed up the idea through its title: “Ride the Global Construction Boom with Caterpillar.”

The article notes that Caterpillar should benefit from a cyclical recovery as the “developed world appears poised to embark on a multiyear construction binge.”

Countries are utilizing the current low interest rate environment to undertake these large projects. In the U.S. the $1 trillion infrastructure bill is moving its way through both houses of Congress and is one of few projects with bipartisan support. That all bodes well for Caterpillar of course. 

With Caterpillar, investors get a dividend bearing a 2.1% yield and a stock which has been appreciating in price. Year-to-date, CAT stock is up 16.4%. However, analysts believe there is further growth ahead based on their target stock prices. 

Their consensus target stock price is $233.49, 10.2% above current levels. That’s a nice return to aspire to and there’s safety even if it doesn’t quite reach those levels. 

Nucor (NUE)  a steel frame for a buildingSource: Shutterstock

Let’s begin by discussing Nucor’s price appreciation this year because it’s been quite phenomenal. In 2021 alone NUE stock has increased in price from $52 to $120. That’s exceptional for any class of stock, and unheard of among the dividend class. 

Based on analyst sentiment, Nucor has plateaued and should trade in its current range for the foreseeable future. The high analyst price is $142, but that should be taken as an outlier. 

The good news is that Nucor’s forward price-to-earnings (P/E) ratio of 6.66 looks to be below the forward P/E ratio of the broader steel industry at 17.02. That suggests value following its massive rise.

The stock provides a modest yield of 1.34%, which of course increases return. 

And Nucor certainly has room to grow. It recently completed a $370 million purchase of Hannibal Steel on Aug. 23. And there’s plenty of growth left in the steel industry. Steel prices are up 87% this year, hitting $1,900 a ton. 

Analysts believe that those price levels will persist for some time. Nucor will benefit handsomely should that prove true. 

Dividend Aristocrat Stocks for September: Roper Technologies (ROP)  Image of Roper Technologies logo visible on display screenSource: IgorGolovniov / Shutterstock.com

Roper Technologies is an under the radar business in the sense that it isn’t a household name. The company was recently mentioned in a Barron’s article discussing the importance of water as both a resource and an asset class. It mentioned Roper Technologies in relation to the company’s water metering solutions, but the company operates across multiple industries and services. 

Roper Technologies sells software, analytics, measurement and process technology solutions across lots and lots of verticals. The business isn’t likely to appear attractive to outsiders, but growth is clearly there. 

While Roper Technologies’ dividend only provides a 0.47% yield, the stock itself has appreciated at a healthy pace. Year-to-date it has risen by 12%. That’s part of a broader trend over the past few years. 

ROP stock has steadily increased from under $300 to near $500 within the last 3 years. There’s no indication that the company will increase its dividend drastically anytime soon, but it could if it chose to: Its dividend payout ratio is 0.22 and anything up to 0.50 is considered very sustainable. 

Chevron (CVX)  Chevron (CVX) logo on gas station sign with "diesel" and "food mart" written underneathSource: Sundry Photography / Shutterstock.com

Big Oil stocks are becoming less and less of a fixture on the dividend aristocrat list. Royal Dutch Shell (NYSE:RDS.A, NYSE:RDS.B) famously cut its dividend for the first time since World War II in April of last year.

Some have speculated that Exxon Mobil (NYSE:XOM) could be next. Chevron, though, has continued, raising its dividend from $1.29 to $1.34 back in May. That equates to a strong 5.45% yield for the stock. It must be noted that questions regarding the sustainability of Chevron’s dividend persist as well. CVX stock certainly carries a bit of risk due to that.

That dividend payout ratio is 2.79 meaning that Chevron is paying $2.79 in dividends for every $1 of net income. As you can imagine, that isn’t something a company can sustain in the long run.

The hope is that the metric will fall as business normalizes for Chevron. If the economy rebounds, more people will be driving and Chevron will benefit. That could mean that CVX stock will approach the $124.40 target price analysts have assigned to it. In that case, everything will be going better for the company and dividend worries will likely have subsided.

Dividend Aristocrat Stocks for September: AbbVie (ABBV) ABBV Stock: Offering Oil Yield Without Oil's RiskSource: Piotr Swat / Shutterstock.com

AbbVie has multiple factors working in its favor as a stock: It has shown strong growth YTD, it bears a strong dividend and it is well regarded. Those are among the reasons that it ends this list of dividend aristocrat stocks to buy in September.

Year-to-date, ABBV stock has increased from $105 to $120. It also bears a dividend yield of 4.31% which well exceeds returns from many assets by itself. Finally, analysts have it rated overweight and see it rising to $127.30 per share.

AbbVie reported strong revenue growth in its latest earnings report. The $13.959 billion it recorded in revenues in Q2 worldwide represented an increase of 33.9%

The hope is that with Humira sales slowing somewhat,  the company can replace them with drugs including Skyrizi. Overall the company has managed to improve its sales so the issues look to be well under control.

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

Top 5 Dividend Stocks To Watch Right Now

Social Security’s importance to our nation’s retired workers simply can’t be overstated. According to data from the Social Security Administration (SSA) as of April 2018, some 62% of retirees lean on the program for at least half of their monthly income, with slightly more than a third wholly reliant on Social Security for 90% or more of their income. Without this guaranteed monthly payout, the elderly poverty rate likely would be much higher than it is now.

What is COLA and why does it matter?

Because of Social Security’s importance to retirees, there arguably is no event more anticipated by current beneficiaries than the annual release of cost-of-living adjustment (COLA) data in mid-October. Think of COLA as the annual “raise” that beneficiaries receive. It’s designed to be reflective of the annual inflation that beneficiaries face as a result of the rising price of goods and services.

Image source: Getty Images.

Top 5 Dividend Stocks To Watch Right Now: Cinemark Holdings Inc(CNK)

Cinemark Holdings, Inc. and its subsidiaries engage in the motion picture exhibition business. As of June 30, 2011, it operated 436 theatres with 4,983 screens in 39 states of the United States, as well as in Brazil, Mexico, and 11 other Latin American countries. The company is headquartered in Plano, Texas.

Advisors’ Opinion:

  • [By Garrett Baldwin]

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Top 5 Dividend Stocks To Watch Right Now: Nucor Corporation(NUE)

Nucor Corporation, together with its subsidiaries, engages in the manufacture and sale of steel and steel products in North America and internationally. It operates through three segments: Steel Mills, Steel Products, and Raw Materials. The Steel Mills segment produces hot and cold-rolled sheet steel; plate steel; structural steel comprising wide-flange beams, beam blanks, and sheet piling; and bar steel, such as blooms, billets, concrete reinforcing bar, merchant bar, and special bar quality products. The Steel Products segment offers steel joists and joist girders, steel deck, fabricated concrete reinforcing steel, cold finished steel, steel fasteners, metal building systems, light gauge steel framing, steel grating and expanded metal, and wire and wire mesh products. The Raw Materials segment produces direct reduced iron (DRI); brokers ferrous and nonferrous metals, pig iron, hot briquetted iron, and DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap metal products. The company?s operations also include various international trading companies that buy and sell steel and steel products. It sells its hot-rolled steel and cold-rolled steel to steel service centers, fabricators, and manufacturers; steel joists and joist girders, and steel deck to general contractors and fabricators; and cold finished steel and steel fasteners to distributors and manufacturers. The company?s products are used by contractors in constructing highways, bridges, reservoirs, utilities, hospitals, schools, airports, stadiums, and high-rise buildings. Nucor Corporation was founded in 1940 and is based in Charlotte, North Carolina.

Advisors’ Opinion:

  • [By Ethan Ryder]

    Longbow Research lowered shares of Nucor (NYSE:NUE) from a buy rating to a neutral rating in a research note issued to investors on Monday, Marketbeat Ratings reports.

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Top 5 Dividend Stocks To Watch Right Now: Paychex Inc.(PAYX)

Paychex Inc., together with its subsidiaries, provides payroll, human resource, and benefits outsourcing solutions for small-to medium-sized businesses in the United States and Germany. It offers payroll processing services, including calculation, preparation, and delivery of employee payroll checks; production of internal accounting records and management reports; preparation of federal, state, and local payroll tax returns; and collection and remittance of clients? payroll obligations. The company also provides payroll tax administration services; employee payment services; and regulatory compliance services, such as new-hire reporting and garnishment processing. Its human resource outsourcing services include payroll, employer compliance, human resource and employee benefits administration, risk management outsourcing, and the on-site availability of a professionally trained human resource representative, as well as provides employee handbooks, management manuals, and r equired regulatory forms. In addition, the company offers retirement services administration; workers? compensation; business-owner policies; commercial auto; and health and benefits coverage, including health, dental, vision, and life. Further, it provides online human resource administration software products for employee benefits management and administration, and time and attendance solutions. As of May 31, 2010, the company served approximately 536,000 clients in the United States; and 1,700 clients in Germany. Paychex, Inc. was founded in 1971 and is headquartered in Rochester, New York.

Advisors’ Opinion:

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    Paychex (Nasdaq: PAYX) handles the payroll for 650,000 clients, mostly small businesses with 10 to 50 employees — the economy’s growth engine.

    These payroll customers generally pay a flat service fee, as well as an additional fee for each worker enrolled. Thus, Paychex likes to see businesses hiring new employees. And after a soft February report, the labor market is roaring once again.

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Top 5 Dividend Stocks To Watch Right Now: Polo Ralph Lauren Corporation(RL)

Ralph Lauren Corporation, together with its subsidiaries, engages in the design, marketing, and distribution of lifestyle products. The company offers men?s, women?s, and children?s clothing; and accessories comprising footwear, eyewear, watches, jewelry, hats, and belts, as well as leather goods, including handbags and luggage. It also provides products for homes, including bedding and bath products, furniture, fabric and wallpaper, paint, tabletop, and giftware; and fragrance products for women men. In addition, the company licenses its products, such as men?s sportswear, men?s tailored clothing, men?s underwear and sleepwear, eyewear, fragrances, cosmetics, and color and skin care products. It offers its products under the Polo by Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren Women?s Collection, Black Label, Blue Label, Lauren by Ralph Lauren, RRL, RLX, Rugby, Ralph Lauren Childrenswear, American Living, Chaps, and Club Monaco brand names. Ralph Lauren sells its products to department stores, specialty stores, and golf and pro shops; full-price retail stores, factory retail stores, and concessions-based shop-within-shops; and online through RalphLauren.com and Rugby.com. As of April 3, 2010, it operated 179 full-price retail stores and 171 factory stores worldwide, as well as 281 concessions-based shop-within-shops and 2 e-commerce Websites. The company was formerly known as Polo Ralph Lauren Corporation and changed its name to Ralph Lauren Corporation in August 2011. Ralph Lauren Corporation was founded in 1967 and is based in New York, New York.

Advisors’ Opinion:

  • [By Leo Sun]

    Shares of Ralph Lauren (NYSE:RL)rallied 8% onFeb. 5 after the apparel retailer’s third quarter numbers topped Wall Street’s expectations. Its revenue rose 5% annually (6% on a constant currency basis) to $1.73 billion and beat estimates by $70 million. Its non-GAAP EPS climbed 14% to $2.32, topping expectations by $0.17.

  • [By Daniel Miller]

    Shares of Ralph Lauren Corporation (NYSE:RL) were up 7% as of 12:18 p.m. EST after the company released strong results for the third quarter of fiscal 2019. The company is a global designer, marketer, and distributor of premium products in apparel, home, accessories, and fragrances.

Top 5 Dividend Stocks To Watch Right Now: United Bancshares Inc.(UBOH)

United Bancshares, Inc. operates as a bank holding company for The Union Bank Company that engages in the provision of commercial banking services to small and middle-market businesses and individuals. It accepts various deposit products, including checking accounts, savings and money market accounts, time certificates of deposit, time deposits, and demand deposits. The company also offers various loan products that consist of commercial, consumer, agricultural, residential mortgage, and home equity loans. In addition, it provides automatic teller machine services, safe deposit box rentals, and other personalized banking services. The company serves primarily in the Ohio counties of Allen, Hancock, Putnam, Sandusky, Van Wert, and Wood, as well as with office locations in Bowling Green, Columbus Grove, Delphos, Findlay, Gibsonburg, Kalida, Leipsic, Lima, Ottawa, and Pemberville, Ohio. United Bancshares, Inc. was founded in 1904 and is headquartered in Columbus Grove, Ohio.< /p>

Advisors’ Opinion:

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