The Dividend Aristocrats are among the best dividend growth stocks to buy and hold for the long-run. Dividend Aristocrats have excellent business models that have produced annual dividend increases, even during recessions.

The following 3 dividend stocks have increased their payouts for over 25 consecutive years, placing them on the exclusive Dividend Aristocrats list. They also have high expected total returns over the next five years.

3M Company (MMM)

3M is a global industrial manufacturer with more than 60,000 products that are used every day in homes, hospitals, office buildings and schools around the world. It has about 95,000 employees and serves customers in more than 200 countries.

In the 2023 second quarter, revenue declined 4.4% to $8.3 billion, but this was $440 million above estimates. Adjusted earnings-per-share of $2.17 compared unfavorably to $2.48 in the prior year, but was $0.41 more than projected. Organic growth for the quarter fell 2.5% for the period. Health Care had organic growth of 0.1%, while Transportation & Electronics, Consumer, and Safety & Industrial were down 2.4%, 2.2%, and 4.6%, respectively.

3M updated its outlook for 2023, with the company now expecting adjusted earnings-per-share in a range of $8.60 to $9.10 for the year, up from $8.50 to $9.00. We expect 5% annual EPS growth for MMM, while the stock appears undervalued. With a 2023 P/E just under 10, an expanding P/E multiple could boost annual returns by over 6% in the next five years.

In February 2023, 3M announced it was raising its quarterly dividend 0.7% to $1.50, extending the company’s dividend growth streak to 65 consecutive years. 3M stock yields 6.9%. Total returns could exceed

Albemarle Corporation (ALB)

Albemarle is the largest producer of lithium and second largest producer of bromine in the world. The two products account for nearly two-thirds of annual sales. Albemarle produces lithium from its salt brine deposits in the U.S. and Chile. The company has two joint ventures in Australia that also produce lithium.

In the second quarter, revenue grew 60.1% to $2.37 billion, but missed estimates by $20 million. Adjusted earnings-per-share of $7.33 compared very favorably to $3.45 in the prior year and was $2.81 above estimates.

For the quarter, revenue for Energy Storage grew 119.7% to $1.76 billion, due to higher prices and a 36% improvement in volumes from the company’s expansion in Chile and a new processing plant in China.

Earnings-per-share are up 18.7% on average over the last decade, with much of that growth occurring last year. Looking at just the last five years, that growth rate reaches nearly 40%. The company’s guidance for the year points towards another excellent year of growth.

ALB has increased its dividend for 28 years and the stock currently yields 1%. With a very low payout ratio under 20% for the current fiscal year, there is plenty of room for continued dividend increases.

Sysco Corporation (SYY)

Sysco Corporation is the largest wholesale food distributor in the United States. The company serves 600,000 locations with food delivery, including restaurants, hospitals, schools, hotels, and other facilities. According to estimates, the company has a 16% market share of total food delivery within the United States.

On August 1st, 2023, Sysco reported fourth-quarter results for Fiscal Year (FY) 2023. In the fourth quarter, Sysco achieved a 4.1% sales increase compared to the same period in the previous fiscal year, with U.S. Foodservice volume rising by 2.3%. Adjusted EPS rose by 16.5% to $1.34, compared to the previous fiscal year.

For the entire fiscal year 2023, Sysco grew revenue by 11% with a 5.2% rise in U.S. Foodservice volume. Adjusted earnings-per-share increased 23% to $4.01.

Sysco has an economic moat due to its large-scale and entrenched distribution infrastructure, which gives it a cost advantage over most competitors. This moat is evidenced by the company's double-digit returns on invested capital every year, much higher than its weighted average capital cost.

We expect 7% annual EPS growth over the next five years. SYY trades for a 2023 P/E of 15.3, which is below our fair value P/E of 20. This means an expanding P/E multiple could boost annual returns by approximately 5% per year over the next five years.

SYY has increased its dividend for 53 years. The stock currently yields 3%. Total returns could reach 15% per year.

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Bob Ciura has worked at Sure Dividend since October 2016. He oversees all content for Sure Dividend and its partner sites. Bob received a Bachelor’s degree in Finance from DePaul University, and an MBA with a concentration in Investments from the University of Notre Dame.