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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.

Best Small Cap Stocks For 2021

Beacon Roofing Supply (NASDAQ:BECN) was upgraded by Zacks Investment Research from a “hold” rating to a “buy” rating in a report released on Monday. The firm presently has a $41.00 price target on the stock. Zacks Investment Research’s target price points to a potential upside of 12.54% from the stock’s previous close.

According to Zacks, “Although shares of Beacon Roofing have underperformed its industry in the past year, earnings estimates for fiscal 2019 have remained stable, while that of fiscal 2020 moved up in the past 30 days, reflecting analyst's optimism over the company's earnings growth potential. Beacon Roofing's focus on significant cost synergies is likely to aid in the near term. Moreover, the company is expected to gain from Allied Building Products acquisition. Also, it remains focused on investing for its employees with additional tools and training that are enhancing productivity. However, rising raw material prices of asphalt, steel and gypsum, inbound flatbed rates as well as outbound costs, including diesel and other delivery expenses, are pressing concerns.”

Best Small Cap Stocks For 2021: Four Corners Property Trust, Inc.(FCPT)

Four Corners Property Trust, Inc., incorporated on July 2, 2015, is a self-administered company, which is engaged in the ownership, acquisition and leasing of restaurant properties. The Company’s business is conducted through its subsidiaries, Four Corners Operating Partnership, LP (Four Corners OP) and Four Corners GP, LLC (Four Corners GP). The Company operates through two segments: real estate operations and restaurant operations. It owns over 424 properties in the United States. Of these properties, 418 are held for investment. These 418 properties have an aggregate leasable area of approximately 3,287,000 square feet, which are located in over 44 states. The remaining over six properties are operated by the Kerrow Restaurant Operating Business as LongHorn Steakhouses. Of approximately six LongHorn SteakHouse restaurant properties located in the San Antonio area, over three properties are leased to its subsidiary, Kerrow Holdings, LLC (together with its subsidiaries Kerrow), and approximately three are owned by Kerrow. Kerrow is the Company’s taxable REIT subsidiary (TRS).

The Company’s real estate operations segment consists of rental revenues generated by leasing restaurant properties to tenants through triple-net lease arrangements, under which the tenant is responsible for ongoing costs relating to the properties. It also includes expenses associated with continuing efforts to invest in additional restaurant and food service real estate properties and its corporate operating expenses. The Company’s restaurant operations segment is conducted through its TRS and consists of its Kerrow Restaurant Operating Business. The associated sales revenues, restaurant expenses and overhead, and depreciation on the six buildings and equipment are components of restaurant operations.

Advisors’ Opinion:

  • [By Shane Hupp]

    Boenning Scattergood set a $30.00 target price on Four Corners Property Trust (NYSE:FCPT) in a research report released on Friday morning. The firm currently has a buy rating on the financial services provider’s stock.

  • [By Joseph Griffin]

    These are some of the media headlines that may have impacted Accern Sentiment Analysis’s scoring:

    Get Four Corners Property Trust alerts:

    FCPT Closes 46 Chilis Restaurant Properties for $149.8 million as part of Previously Announced Brinker Sale-Leaseback Transaction (finance.yahoo.com) FCPT Announces Acquisition of a Buffalo Wild Wings Restaurant Property for $1.7 million (finance.yahoo.com) Four Corners Property Trust (FCPT) vs. Sutherland Asset Management (SLD) Head to Head Analysis (americanbankingnews.com) FCPT Announces Acquisition of an Arbys Restaurant Property for $1.6 million (finance.yahoo.com) Four Corners Property Trust Inc (FCPT) Expected to Post Quarterly Sales of $35.62 Million (americanbankingnews.com)

    Shares of Four Corners Property Trust traded down $0.16, hitting $26.01, during trading hours on Friday, according to MarketBeat Ratings. The stock had a trading volume of 360,648 shares, compared to its average volume of 479,703. The company has a current ratio of 6.59, a quick ratio of 6.59 and a debt-to-equity ratio of 0.90. The firm has a market capitalization of $1.65 billion, a P/E ratio of 19.13 and a beta of -0.04. Four Corners Property Trust has a 12-month low of $21.28 and a 12-month high of $26.96.

Best Small Cap Stocks For 2021: Royal Dutch Shell PLC(RDS.A)

Royal Dutch Shell plc (shell), incorporated on February 5, 2002, is an independent oil and gas company. The Company explores for crude oil and natural gas across the world, both in conventional fields and from sources, such as tight rock, shale and coal formations. The Company is engaged in the principal aspects of the oil and gas industry in approximately 70 countries. The Company operates in three segments: Upstream, Downstream and Corporate. Its Upstream segment focuses on exploration for new crude oil and natural gas reserves and on developing new projects. In Downstream, the Company focuses on turning crude oil into a range of refined products, which are moved and marketed around the world for domestic, industrial and transport use. The Company sells various products, which include gasoline, diesel, heating oil, aviation fuel, marine fuel, liquefied natural gas (LNG) for transport, lubricants, bitumen and sulfur. It also produces and sells ethanol from sugar cane in Brazil.

Upstream

The Company’s Upstream segment combines the operating segments Upstream International and Upstream Americas. The Company extracts bitumen from mined oil sands, which the Company converts into synthetic crude oil. The Company liquefies natural gas by cooling it and transports LNG to customers around the world. It also converts natural gas to liquids (GTL) to provide fuels and other products, and it markets and trades crude oil and natural gas (including LNG) in support of its Upstream businesses. Shell subsidiaries, joint ventures and associates are involved in all aspects of upstream activities, including matters, such as land tenure, entitlement to produced hydrocarbons, production rates, royalties, pricing, environmental protection, social impact, exports, taxes and foreign exchange. The conditions of the leases, licenses and contracts under, which oil and gas interests are held vary from country to country.

The Company’s Upstream International business manages Shell’s Upstream! activities outside the Americas. The Company explores for and extracts crude oil, natural gas and natural gas liquids, transports oil and gas, and operates the upstream and midstream infrastructure necessary to deliver oil and gas to market. Upstream International also manages the LNG and GTL businesses outside the Americas, and markets and trades natural gas, including LNG, outside the Americas. It manages its operations primarily by line of business, with this structure overlaying country organizations. The Company’s Upstream Americas business manages Shell’s Upstream activities in North and South America. Upstream Americas also extracts bitumen from oil sands that is converted into synthetic crude oil. It manages the LNG business in the Americas, including assets in Peru and Trinidad and Tobago. It also markets and trades natural gas in the Americas. In addition, it manages the United States wind business.

Downstream

The Company’s Downstream business manages Shell’s oil products activities, consisting refining, trading and supply, pipelines and marketing, and chemicals activities. In addition, the Company produces and sells petrochemicals for industrial use across the world. Its marketing activities include retail, lubricants, business-to-business (B2B) and alternative energies. In trading and supply, the Company trades crude oil, oil products and petrochemicals, to optimize feedstock for refining and chemicals, to supply its marketing businesses and third parties. The Company has interests in over 20 refineries across the world with the capacity to process a total of approximately 3.1 million barrels of crude oil per day. Trading and supply trades in physical and financial contracts, lease storage and transportation capacities, and manages shipping and wholesale commercial fuel activities globally. Across approximately 100 countries, the Company produces, markets or sells lubricants for passenger cars, motorcycles, trucks and coaches, and for industrial machinery in the ma! nufacturi! ng, mining, power generation, agriculture and construction sectors.

The Company has a global lubricants supply chain with a network of over eight base oil manufacturing plants, 40 lubricant blending plants, 10 grease plants and four gas-to-liquids base oil storage hubs. Through its marine activities, the Company primarily provides lubricants along with fuels and related technical services, to the shipping and maritime sectors. Its B2B activities encompass the sale of fuels and specialty products and services to a range of commercial customers. Its plants produce a range of base chemicals, including ethylene, propylene and aromatics, as well as intermediate chemicals, such as styrene monomer, propylene oxide, solvents, detergent alcohols, ethylene oxide and ethylene glycol. It has capacity to produce approximately six million tons of ethylene a year.

Advisors’ Opinion:

  • [By Garrett Baldwin]

    See Now: Our founder just released his No. 1 pick for 2019. Don’t miss this. See the urgent briefing here…

    Walt Disney Co. (NYSE: DIS) unveiled its highly anticipated streaming service on Thursday. The service, Disney+, will launch Nov. 12 and cost $6.99 per month or $69 per year. The service will include television shows and films from its extended universe of programming – including the Star Wars and Marvel series. Disney said that all of its new films will be available on the service as soon as their theatrical windows have ended. In merger news, Chevron Corp. (NYSE: CVX) announced plans to purchase Anadarko Petroleum Corp.(NYSE: APC) as the oil major continues to push into the U.S. shale business. Shares of APC popped 32% in pre-market hours after Chevron announced the $33 billion bid. This is the largest energy merger since 2016 after Royal Dutch Shell Plc. (NYSE: RDS.A) purchased BG Group. The news sent shares of companies that operate in the Permian basin in West Texas even higher this morning. Look for other earnings reports from PNC Financial Services Group Inc.(NYSE: PNC) and Infosys Ltd.(NASDAQ: INFY).
    This Is How You Can Grow Incredibly Rich Buying Straight-Up Stocks

    Right now, even with all the market uncertainty, there’s truly a ridiculous amount of money to be made from stocks if you follow this secret.

  • [By Alexander Bird]

    Royal Dutch Shell Plc. (NYSE: RDS.A) pays a 5.83% dividend yield and is an excellent buy right now. Shell has a perfect Money Morning Stock VQScore of 4.75, putting it right in the “Buy Zone.”

  • [By Motley Fool Transcribing]

    (NYSE:RDS.A) Q4 2018 Earnings Conference CallJan. 31, 2019 9:00 a.m. ET

    Contents:
    Prepared Remarks Questions and Answers Call Participants
    Prepared Remarks:

    Ben van Beurden

  • [By Dustin Parrett]

    Earlier this year, Royal Dutch Shell Plc. (NYSE: RDS.A) spent $217 million to buy a 44% stake in Silicon Ranch Corp., a major U.S. solar developer. Shell is committing $1 billion a year to clean energy investments.

Best Small Cap Stocks For 2021: Empire Resorts Inc.(NYNY)

Empire Resorts, Inc., through its subsidiaries, operates in the hospitality and gaming industries in New York. The company owns and operates Monticello Casino and Raceway, a video gaming machine and harness horseracing facility that conducts pari-mutuel wagering through the running of live harness horse races, the import simulcasting of harness and thoroughbred horse races, and the export simulcasting of its races to offsite pari-mutuel wagering facilities. It operates approximately 1,090 video gaming machines and 20 electronic table games at Monticello Casino and Raceway. The company was founded in 1993 and is based in Monticello, New York.

Advisors’ Opinion:

  • [By Max Byerly]

    Simplicity Esports and Gaming (NASDAQ:WINR) and Empire Resorts (NASDAQ:NYNY) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

  • [By Stephan Byrd]

    Wendys (NASDAQ: WEN) and Empire Resorts (NASDAQ:NYNY) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.