But while these dividend-hiking stalwarts usually aren't known for their hot growth prospects, a few are indeed poised to outperform in 2020.
To find price upside among dependable dividend stocks, we started with the Dividend Aristocrats. For the uninitiated, the Aristocrats are an index of 57 S&P 500 companies currently that have raised their payouts annually for at least 25 years.
Next, we calculated the implied upside for all 57 Aristocrats based on analysts' average price targets. A price target is the level at which analysts forecast a stock will trade at some point in the future, typically 12 months out.
After running the numbers, we were left with 10 Dividend Aristocrats that offered projected upside of at least 10% in the year ahead. Add in the contributions from their dividends, and these primarily defensive stocks may deliver significant offense in 2020.
General Dynamics
Market value: $53.5 billion
Dividend yield: 2.2%
Implied upside: 10%
Generous military spending has helped fuel
The defense contractor is one of the newer members of the Dividend Aristocrats; it was added to the elite list of dividend growers in 2017.
Analysts see above-average price appreciation on the horizon. With an average price target of $203.79,
Between share-price gains and the dividend,
Roper Technologies
Market value: $36.1 billion
Dividend yield: 0.5%
Implied upside: 10.4%
Analysts see good things ahead for Roper in 2020. Their average price target of $379.14 suggest the stock will rise more than 10% on a price basis alone.
The pros expect those gains will be driven by profit growth, which they believe will run at nearly 12% annually over the next half-decade. Some of that might be sparked by iPipeline, a life insurance software company that Roper acquired for $1.6 billion in August.
And with a dividend payout ratio of just 14% of profits, Roper should have ample room to make generous hikes for many years to come.
Abbott Laboratories
Market value: $148.4 billion
Dividend yield: 1.5%
Implied upside: 10.7%
Following its 2013 spinoff of fellow Dividend Aristocrat AbbVie (ABBV),
The company had been expanding by acquisition for years, including closing on deals for medical-device firm St. Jude Medical and rapid-testing technology business Alere in 2017. After taking a year off, Abbott in
Abbott's earnings are forecast to grow at an average annual clip of 10.2%. The average price target of $93.39 gives ABT implied upside of nearly 11% over the next 12 months. That's roughly where Morgan Stanley analyst
Income investors can count on the dividend providing a boost to total returns. ABT, whose corporate history dates back to 1888, initiated its dividend in 1924. It has been growing that payout annually for 47 consecutive years.
Becton Dickinson
Market value: $65.9 billion
Dividend yield: 1.3%
Implied upside: 11.3%
Medical-device maker
Economies of scale and related cost-savings efforts have analysts bullish on the profit outlook. The Street expects BDX to generate average annual earnings growth of 11.2% for the next five years, according to
Analysts have an average price target of $269.78 on the stock, implying upside of more than 11% in the next year or so.
BDX is a longtime member of the Dividend Aristocrats by virtue of its 47-year streak of annual dividend increases - a track record that should offer peace of mind to antsy income investors.
Chevron
Market value: $228.6 billion
Dividend yield: 3.9%
Implied upside: 11.6%
Stable oil prices and cost savings are projected to help
The integrated oil giant, with operations in natural gas and geothermal energy, was forced to slash spending in the wake of the 2014 oil-price rout. But the strategy is paying off in today's steadier environment. Analysts forecast shares to hit $135.04 about 12 months from now, giving
"CVX has an attractive global asset base with the potential for solid production growth and best-in-class cash margins versus global integrated peers," says JPMorgan analyst
A dividend yield of almost 4% will add juice to
With more than three decades of uninterrupted dividend growth under its belt, this
Exxon Mobil
Market value: $291.2 billion
Dividend yield: 5.0%
Implied upside: 11.8%
What goes for
Analysts are forecasting a similar share-price gain in XOM, also a
"We believe
All that is before factoring in the truly generous dividend.
Coca-Cola
Market value: $224.1 billion
Dividend yield: 3.1%
Implied upside: 13.3%
Coca-Cola (KO, $51.71) has long been known for quenching consumers' thirst, but it's equally effective at quenching investors' thirst for income. The company has delivered a quarterly dividend since 1920, and that cash payout has climbed annually for the past 57 years - one of the longest streaks among the Dividend Aristocrats.
In the more immediate term, the Dow stock is beginning to enjoy the benefits of its new strategy. With the U.S. market for carbonated beverages on the decline for more than a decade, Coca-Cola has responded by adding bottled water, fruit juices and teas to its product lineup to keep the cash flowing. In addition to the namesake Coca-Cola brand, KO also sports names such as Minute Maid, Powerade, Simply Orange and Vitaminwater.
Coca-Cola has ventured even farther afield of late. It completed its $5.1 billion buyout of
The expanded portfolio of beverages is forecast to allow KO to post revenue growth of nearly 4% in 2020. That should help lift the stock by more than 13%, analysts reckon.
"The company is effectively navigating aggressive
Johnson & Johnson
Market value: $345.2 billion
Dividend yield: 2.9%
Implied upside: 13.7%
Diversified health-care giant
But analysts believe that putting this latest legal headache behind it will allow JNJ's stock to take off in 2020. With an average target price of $149.37, the Street expects price appreciation of almost 14% over the next 12 months.
As counterintuitive as it seems, the news that J&J agreed in principle to pay $4 billion to settle was viewed somewhat positively in the analyst community. Credit Suisse's
The Dow component, which was founded in 1886 and went public in 1944, hiked its payout by 5.6% in April, to 95 cents per share. That extended the Dividend Aristocrat's streak of consecutive annual increases to 57.
VF Corp.
Market value: $34.1 billion
Dividend yield: 2.3%
Implied upside: 15.6%
As disruptive as all that has been, it also sets up the apparel maker for easier year-over-year comparisons for its 2021 fiscal year, which begins in
Indeed, even after a recent earnings miss, several analysts came out in support of the Dividend Aristocrat.
"
Suffice to say, with a 47-year streak of annual dividend raises, the income side of the equation appears safe.
McDonald's
Market value: $146.5 billion
Dividend yield: 2.6%
Implied upside: 15.7%
Among the 57 Dividend Aristocrats, none has more implied upside in 2020 than the Golden Arches.
What makes that feat more remarkable is that those estimates reflect a recent surprise shift in the C-suite. Analysts and traders were taken aback when the company fired CEO
A few analysts reacted pessimistically on the news, but things calmed down once it became apparent that new CEO
The world's largest hamburger chain's dividend dates back to 1976 and has gone up every year since. MCD last raised its dividend in September, when it lifted the quarterly payout by 8% to $1.25 a share. That marked its 43rd consecutive annual increase.
Dan Burrows is a Contributing Writer for Kiplinger.