10 Most Undervalued Dividend Aristocrats to Buy Now

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10 most undervalued dividend aristocrats to buy now

The 10 most undervalued dividend aristocrats to buy now offer investors bargain-priced, proven stocks.


The Dividend Aristocrats — an elite group of companies that have increased their dividend distributions for more than 25 consecutive years — are considered the gold-standard in equities for income investors. The list currently numbers 65 stocks, all of which are in the S&P 500 and widely traded on a day-to-day basis.

Many of these companies have been in existence for more than 100 years and have paid dividends for almost as long. However, just because a company is well established does not mean it is properly valued by the market. Many of the dividend aristocrats have been overlooked by certain investors in favor of more modern growth stocks.


The result is that some of the dividend aristocrats have created value in the last few years at a pace that the market has yet to realize.The result is many of the dividend aristocrats are undervalued. We used Stock Rover to run a discounted cash-flow (DCF) analysis on each of them and find out which ones have the greatest value compared to their current market trading price.

To find more of the best dividend aristocrats to invest in, use the Dividend Screener available at DividendInvestor.com to filter through more than 58,000 equities to find the stocks with exactly the specifications your portfolio needs. Here are the 10 most undervalued dividend aristocrats to buy now.


10 Most Undervalued Dividend Aristocrats to Buy Now #10


Sherwin-Williams (NYSE:SHW)

Latest closing price: $272.25

Fair value: $332.01

With more than 4,800 stores, Sherwin-Williams (NYSE:SHW) is the largest paint provider in the United States. Its products are sold at a premium compared to its competitors, widening its profit margin and bringing a consistent cash surplus since 1979.

The company has increased its dividend for the last 41 consecutive years and grows it at an impressive rate. The three-year average dividend growth rate for SHW is 24.3% per year where the 10-year rate averages 16.3% per year. Sherwin-Williams pays a quarterly dividend of $0.55, corresponding to a dividend yield of 0.8%.



10 Most Undervalued Dividend Aristocrats to Buy Now #9

PPG Industries (NYSE:PPG)

Latest closing price: $172.38

Fair value: $215.34

PPG Industries (NYSE:PPG) is a multi-industry provider of coatings — it covers the outside of automobiles, airplanes, buildings, industrial equipment and a variety of other items. The company is shifting its focus to the global market, with less than half of its current sales coming from North America.

With a dividend yield of 1.3%, PPG Industries pays a quarterly distribution of $0.54, equivalent to an annualized payout of $2.16. With 49 consecutive years of dividend growth, the company is one of the more established dividend aristocrats and is soon to join the ranks of the Dividend Kings — a hyper-exclusive group of companies who have increased their dividend for over 50 consecutive years.


10 Most Undervalued Dividend Aristocrats to Buy Now #8

Franklin Resources (NYSE:BEN)

Latest closing price: $29.80


Fair value: $37.32

Franklin Resources (NYSE:BEN) is an asset management company giving investment services to both individual and institutional investors. At the end of the fourth quarter in 2020, the firm had $1.5 trillion in assets under management — the majority of these belonged to retail investors (51%), with a smaller sum owned by institutional investors (47%) and high-net-worth clients (2%).

In addition to 40 consecutive years of dividend increases, Franklin Resources is a higher-yielding equity than many of its peers. The company maintains a dividend yield of 3.8% with a quarterly distribution of $0.28. This high-yield continues to grow today, as the 10-year average growth rate of BEN’s dividend is nearly 13% per year.

Note: companies in the financial services industry often have hidden liabilities and hard-to-track sources of income, making them notoriously difficult to do an accurate DCF analysis on. As a result, we have lower confidence in the fair value of this company than others on the list.


10 Most Undervalued Dividend Aristocrats to Buy Now #7

Becton, Dickinson (NYSE:BDX)

Latest closing price: $248.81

Fair value: $348.00


Becton, Dickinson (NYSE:BDX) is the largest manufacturer of surgical instruments in the world, selling mostly syringes, needles and sharps-disposal units. In addition to medical surgical products, the company produces diagnostic equipment, cell-imaging systems and other pieces of medical technology.

BDX has a run of consecutive dividend increases numbering more than 50 years, granting it the prestigious rank of Dividend King. In addition to its long streak, Becton, Dickinson regularly grows its dividend 7.3% per year, averaged for the last 10 years. Its quarterly dividend distribution is $0.83, giving investors an annual payout of $3.32 and a dividend yield of 1.3%.


10 Most Undervalued Dividend Aristocrats to Buy Now #6


Latest closing price: $285.84

Fair value: $371.43

As the biggest industrial gas supplier in the world, Linde PLC (NYSE:LIN) distributes gasses varying from oxygen, nitrogen and argon to hydrogen, helium and carbon dioxide. Its customers are in a wide variety of industries, ranging from health care to steel making, and are housed in more than 100 different countries.

Linde PLC pays a quarterly dividend of $1.06. Its most recent dividend hike occurred at the start of 2021, increasing its previous dividend amount of $0.96 by 10.1%. This growth is higher than average for the company — which consistently raises its dividend between 7.8% and 8.7% annually — but is nonetheless in line with Linde PLC’s improving financial performance and dividend habits. The company has paid a dividend every year for the last 28 years and has grown its distribution each time.



10 Most Undervalued Dividend Aristocrats to Buy Now #5


Latest closing price: $31.41

Fair value: $39.77

AT&T (NYSE:T) is the second-largest U.S. wireless carrier. Known largely for its far-reaching phone service, AT&T also derives revenue from cable networks, HBO, Warner Brothers studios and other more minor divisions of the entertainment industry.

The company has increased its dividend payout for 35 consecutive years and is due to increase it again in the remainder of 2021. If AT&T plans to maintain its status as a dividend aristocrat, it will have to raise its current quarterly dividend of $0.52 in the third or fourth quarter of this year — based on historical dividend hikes, AT&T will likely opt for slow and steady growth, supplying investors with a new dividend of $0.53 in the next several months.


T stands out among other companies on this list as, in addition to its long dividend streak and steady growth, it pays an uber-high dividend relative to its stock price. The dividend yield is currently 6.6%, one of the highest on our list and a massive income opportunity for dividend investors.


10 Most Undervalued Dividend Aristocrats to Buy Now #4

Realty Income (NYSE:O)

Latest closing price: $69.15

Fair value: $91.27

As the only monthly dividend payer on this list, Realty Income (NYSE:O) is worth considering for any income investor’s portfolio. The company owns nearly 7,000 properties across 49 states, the majority of which are single-tenant, triple-net-leased retail properties.

Realty Income is a REIT, or real estate investment trust, and therefore must distribute more than 90% of its earnings in the form of dividends. Investors interested in REITs should check out our REIT directory, which allows DividendInvestor.com subscribers to customize their search according to their portfolio’s specific needs.

Realty Income pays a monthly dividend distribution of $0.23, annualizing to a yearly payout of $2.82. This monthly dividend amount is seeing its next increase in the latest distribution, payable on April 15, 2021. The increase marks the 110th dividend increase in Realty Income’s history among its 609 consecutive monthly payments.



10 Most Undervalued Dividend Aristocrats to Buy Now #3

Ecolab (NYSE:ECL)

Latest closing price: $224.12

Fair value: $288.85

Ecolab (NYSE:ECL) is a global market leader in the hospitality, industrial and health care industries. Its production of cleaning and sanitation products have given it a stronghold in the United States market with it quickly expanding into more overseas operations.

Ecolab has increased its dividend for 29 consecutive years and paid a cash dividend every year for the last 84 years. The latest of these dividends are distributed once per quarter and currently valued at $0.48. Investors can expect an annual dividend totalling $1.92 this year, the product of a 0.9% dividend yield.


10 Most Undervalued Dividend Aristocrats to Buy Now #2


Cardinal Health (NYSE:CAH)

Latest closing price: $60.34

Fair value: $80.09

Specializing in wholesale pharmaceutical and medical products, Cardinal Health (NYSE:CAH) is one of the largest logistics providers for the medical industry in the world. It is primarily engaged in the distribution and sourcing of brand-name medical products to health care systems, pharmacies, ambulatory centers, hospitals and laboratories.

The company currently pays a handsome quarterly dividend of $0.49 per share, yielding 3.2% and promising investors an annual dividend total of $1.94. Cardinal Health has increased its dividend every year for the last 34 years. Although the dividend increases have slowed to an average of 1.7% dividend growth per year in the lastthree years (compared to the large historical payments averaging a 10-year dividend growth rate of 9.6%), it is still predictably increasing the distribution year after year and rewarding investors in turn.


10 Most Undervalued Dividend Aristocrats to Buy Now #1

Kimberly-Clark (NYSE:KMB)

Latest closing price: $133.32

Fair value: $147.27


Our last company in the 10 most undervalued dividend aristocrats, Kimberly-Clark (NYSE:KMB), produces essential items used in personal care such as tissue products, diapers, paper towels and air-fresheners. They are just a handful of the high-revenue producing items sold by KMB. The majority of the company’s sales are generated in the United States but it is quickly expanding to service more of Europe, Asia and Latin America.

Kimberly-Clark has a streak of consecutive dividend increases totalling an impressive 49 years. In 2022, the company will be added to the exclusive Dividend Kings, if it continues to increase its dividend according to plan. The current quarterly dividend distribution is $1.14 per share, a 6.5% increase from the $1.07 dividend it paid through 2020. This growth is in line with the historical average, which over the last three, five and 10 years has averaged just under 5%. Kimberly-Clark’s dividend yields a generous 3.4% and it rewards investors with an annual payout of $4.56.

The 10 most undervalued dividend aristocrats to buy now identify bargain-priced, proven stocks that investors would be wise to consider putting into their personal portfolios.


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Jonathan Wolfgram

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Jonathan Wolfgram
Jonathan Wolfgram is an investment analyst who writes website content at Eagle Financial Publications. He graduated from the University of Minnesota with Bachelor’s degrees in Finance and Philosophy. Jonathan writes for www.DividendInvestor.com and www.StockInvestor.com.
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