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Tags: dividend stocks | retirement income | pentair | stanley black anddecker | target

Bob Ciura: 3 Dividend Aristocrats to Buy in 2023

Bob Ciura: 3 Dividend Aristocrats to Buy in 2023

Bob Ciura By Wednesday, 01 February 2023 08:57 AM EST Current | Bio | Archive

While there are many paths investors can take to generate long-term wealth, our preferred method is to buy-and-hold quality dividend stocks for the long run.

There are many different kinds of dividend stocks, which can be overwhelming for investors starting their search. We think many investors would benefit from the safety and growth of the Dividend Aristocrats.

This article will discuss 3 of the best Dividend Aristocrats to buy in 2023.

Dividend Aristocrat #1: Pentair (PNR)

Pentair operates as a pure–play water solutions company with 3 segments: Aquatic Systems, Filtration Solutions, and Flow Technologies. Pentair was founded in 1966. Pentair has increased its dividend for more than four decades in a row, when adjusted for spin–offs.

Pentair reported its third quarter earnings results on October 25. The company was able to generate revenues of $1.06 billion during the quarter, which was 9% more than the company’s revenues during the previous year’s quarter, a result that beat estimates slightly.

Core sales, which excludes the impact of currency rate movements, acquisitions, and dispossessions, were up 4% year over year, which was weaker than the core revenue growth rate during the previous quarter, during which Pentair reported a double-digit core sales increase.

Pentair recorded earnings-per-share of $0.99 for the third quarter, which was up by a compelling 11% year over year. Pentair’s earnings-per-share beat the analyst consensus by $0.06. Pentair updated its guidance for the current year during the earnings report. For fiscal 2022, Pentair is now forecasting earnings-per-share of around $3.65, which indicates solid earnings-per-share growth of around 10% compared to the $3.32 the company earned in 2021.

Total returns are expected to reach 13% over the next five years, based on 6% expected EPS growth, the 2% dividend yield, and a roughly 5% annual return from an expanding P/E ratio.

Dividend Aristocrat #2: Stanley Black & Decker (SWK)

Stanley Black & Decker is a world leader in power tools, hand tools, and related items. The company holds the top global position in tools and storage sales. Stanley Black & Decker is second in the world in the areas of commercial electronic security and engineered fastening.

The company’s dividend growth streak stands at 55 consecutive years. The company one of just 46 Dividend Kings.

On October 27th, 2022, Stanley Black & Decker announced third quarter results for the period ending September 30th, 2022. Revenue grew 9% to $4.1 billion, topping estimates by $120 million. Adjusted earnings-per-share of $0.76 compared very unfavorably to $2.77 in the prior year, but was $0.06 above expectations.

Organic growth declined 2%. Sales for Tools & Outdoor, the largest segment within the company, experienced an organic decline of 5% as a 7% benefit from pricing was once again more than offset by a decline in volume. North America fell 4% and both emerging markets and Europe were lower by 2%.

Industrial organic growth remained strong, improving 14%. Infrastructure grew 12% due to ongoing high demand for attachment tools. Engineered Fastening was up 15% as demand from the aerospace and automotive markets was high.

Dividend Aristocrat #3: Target Corp. (TGT)

Target is a retail giant with about 1,850 big box stores, which offer general merchandise and food, as well as serving as distribution points for the company’s burgeoning e-commerce business. Target should produce about $110 billion in total revenue this year.

Target reported third quarter earnings on November 16th, 2022. Adjusted earnings-per-share were $1.54 per share, which missed estimates by 64 cents. Revenue was better, rising 3.4% to $26.52 billion, which was $120 million better than estimates.

Comparable sales were 2.7% higher, which was stacked on 12.7% growth from the year-ago period. This was driven by a 1.4% gain in traffic, as well as a 1.3% increase in average ticket size. The company said Beauty, Food and Beverage, and Household Essentials were sources of strength, offset by softness in discretionary categories. Digital sales were 17.1% of total revenue.

The company guided for softening sales and profits in Q4, so guidance was quite vague for Q4. In addition, Target is looking for efficiencies across the business, with a focus on reducing complexity and lowering operating costs. The stated goal was to save $2 billion to $3 billion in the coming three years.

Target has grown its dividend for more than five decades, making it a Dividend King. The company is heavily investing in its business in order to navigate through the changing landscape in the retail sector. The recent 32% dividend increase was unexpected given its massive size, and the payout ratio is now 79%. Target stock currently yields 3%. We expect annual returns of 10% per year moving forward.
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.

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While there are many paths investors can take to generate long-term wealth, our preferred method is to buy-and-hold quality dividend stocks for the long run.
dividend stocks, retirement income, pentair, stanley black anddecker, target
Wednesday, 01 February 2023 08:57 AM
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