One of the best ways for investors to save for the future and retirement is to consistently invest money into tax-sheltered vehicles, whether it be a 401(k) plan or self-directed individual retirement account (IRA). For investors 35 to 45 years old and starting to make serious career money, Social Security is likely to still be there in their golden years, though the goalposts likely will be moved way back. So, pouring money into retirement savings accounts can help mitigate the worries about the future changes for Social Security, which for many is not enough to live on anyway.
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One solid choice for investors self-directing their IRAs and Roth IRAs is to look at the Dividend Aristocrats. The 67 companies that made the cut for 2023 have increased dividends (not just remained the same) for 25 years straight. However, the requirements for membership go even further. Companies must:

• Be a member of the S&P 500.
• Be worth at least $3 billion at the time of each quarterly rebalancing.
• Have an average daily volume of at least $5 million in transactions for every trailing three-month period at every quarterly rebalancing date.

With the potential for serious market downside still looming, and interest rates definitely headed higher, we thought it would be a good idea to look for companies among the Dividend Aristocrats that pay among the largest dividends. These are stocks that investors can buy now and hold forever. While all are rated Buy at top Wall Street firms, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

AbbVie

This is a top pharmaceutical stock pick across Wall Street. AbbVie Inc. (NYSE: ABBV) is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. The company develops and markets drugs in areas such as immunology, virology, renal disease, dyslipidemia and neuroscience.

One of the biggest concerns with AbbVie is what might happen eventually with anti-inflammatory therapy Humira, which has some of the largest sales for a drug ever recorded. The company was concerned, so in June of 2019 it announced that it has agreed to pay $63 billion for rival drugmaker Allergan, the latest merger in an industry in which some of the biggest companies have been willing to pay a high price to resolve questions about their future growth. The purchase officially closed in May of 2020.

AbbVie may be nearing the limits of how far it can boost Humira’s price as cheaper competitors come to market, a problem Allergan is already grappling with as more alternatives to Botox emerge.

Shareholders receive a 3.93% dividend. Morgan Stanley has a Wall Street high target price of $178. AbbVie stock has a consensus target of $163, and shares ended Thursday trading at $152.07 apiece.

This is a solid way for growth and income investors who are more conservative to play the health care sector. Cardinal Health Inc. (NYSE: CAH) is one of the largest drug and medical product distributors. The company generates approximately two-thirds of its profit from the pharmaceutical business and nearly one-third from its medical business.
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The pharmaceutical distribution business supports retail/mail/hospital/physician clients, as well as drug manufacturers. The medical business manufactures its own portfolio of medical products and distributes brand-name products to hospitals and physicians.

Investors receive a 2.56% dividend. The Baird price objective for Cardinal Health stock is $94, while the consensus target is $85.99. The shares closed on Thursday at $77.70.

Chevron

This integrated giant is a safer way for investors looking to get positioned in the energy sector, and shares have backed up nicely. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide. The company operates in the following two segments.

The Upstream segment is involved in the exploration, development, production and transportation of crude oil and natural gas; processing, liquefaction, transportation and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage and marketing of natural gas, as well as operating a gas-to-liquids plant.

The Downstream segment engages in refining crude oil into petroleum products; marketing crude oil, refined products and lubricants; manufacturing and marketing of renewable fuels; transporting crude oil and refined products by pipeline, marine vessel, motor equipment and rail car; and manufacturing and marketing of commodity petrochemicals, plastics for industrial uses and fuel and lubricant additives. It is also involved in the cash management and debt financing activities; insurance operations; real estate activities; and technology businesses.

Chevron posted stellar fourth-quarter results and remains one of the best ways to play energy safely.

The company sports a sizable 3.77% dividend. The $212 Raymond James target price is well above the consensus target of $194.26. Chevron stock closed at $161.93 on Thursday.

IBM

This blue chip giant still offers investors an incredibly solid entry point and a huge dividend. International Business Machines Corp. (NYSE: IBM) is a leading provider of enterprise solutions, offering a broad portfolio of IT hardware, business and IT services and a full suite of software solutions. The company integrates its hardware products with its software and services offerings in order to provide high-value solutions.
IBM operates in five major segments: Cognitive Solutions, Global Business Services, Technology Services & Cloud Platforms, Systems, and Global Financing. The analysts have cited the company’s potential in the public cloud as a reason for their positive outlook going forward.
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The company posted a strong fourth quarter, with the cloud and Red Hat (the software giant the firm bought in 2019) proving to be big. Red Hat’s open hybrid cloud technologies are now paired with the unmatched scale and depth of IBM’s innovation and industry expertise and sales leadership in more than 175 countries.

IBM stock investors receive a 5.04% dividend. Stifel has set its price objective at $158, and the consensus target is $146.76. Thursday’s closing print was $130.79.

PepsiCo

This top consumer staples company will be supplying the goods for March Madness parties and summer picnics. PepsiCo Inc. (NYSE: PEP) operates as a food and beverage company worldwide. Its Frito-Lay North America segment offers Lay’s and Ruffles potato chips; Doritos, Tostitos and Santitas tortilla chips; and Cheetos cheese-flavored snacks, branded dips and Fritos corn chips.

The Quaker Foods North America segment provides Quaker oatmeal, grits, rice cakes, natural granola and oat squares, as well as Pearl Milling mixes and syrups, Quaker Chewy granola bars, Cap’n Crunch cereal, Life cereal and Rice-A-Roni side dishes.

Its North America Beverages segment offers beverage concentrates, fountain syrups and finished goods under the Pepsi, Gatorade, Mountain Dew, Diet Pepsi, Aquafina, Tropicana Pure Premium, Sierra Mist and Mug brands, as well as ready-to-drink tea and coffee, and juices.

The dividend yield here is 2.61% dividend. PepsiCo stock has a $287 price target at Barclays. That is well above the $189.50 consensus target and Thursday’s close at $176.31.

Realty Income

This is an ideal stock for growth and income investors looking for a safer, inflation-busting idea for 2023. Realty Income Corp. (NYSE: O) is a real estate investment trust dedicated to providing stockholders with dependable monthly income.

The company’s monthly distributions are supported by the cash flow from over 6,500 real estate properties owned under long-term lease agreements with commercial tenants. To date, the company has declared 608 consecutive common stock monthly dividends throughout its 54-year operating history and increased the dividend 109 times since its public listing in 1994.
Realty Income is a top real estate member of the S&P 500 Dividend Aristocrats index.

Investors receive a 4.66% distribution monthly. Morgan Stanley’s $74 price target compares with a $70.38 consensus target and a $66.08 close for Realty Income stock on Thursday.
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Walgreens

This huge drugstore chain operator is a safe retail play for investors looking to add health care now, and it trades at a cheap 7.5 times 2023 earnings expectations. Walgreens Boots Alliance Inc. (NASDAQ: WBA) operates as a pharmacy-led health and beauty retail company. It operates through three segments.

The Retail Pharmacy USA segment sells prescription drugs and an assortment of retail products, including health, wellness, beauty, personal care, consumable, and general merchandise products through its retail drugstores. It also provides specialty pharmacy services and mail services; this segment operates nearly 10,000 retail stores under the Walgreens and Duane Reade brands in the United States; and six specialty pharmacies.

The Retail Pharmacy International segment sells prescription drugs and health and wellness, beauty, personal care and other consumer products through its pharmacy-led health and beauty stores and optical practices, as well as online and an integrated mobile application. This segment operated 4,428 retail stores under the Boots, Benavides and Ahumada in the United Kingdom, Thailand, Norway, the Netherlands, Mexico and elsewhere, and 550 optical practices, including 165 on a franchise basis.

The Pharmaceutical Wholesale segment engages in the wholesale and distribution of specialty and generic pharmaceuticals, health and beauty products, and home health care supplies and equipment, as well as provides related services to pharmacies and other health care providers.

Walgreens Boots Alliance stock comes with a 5.31% dividend. Loop Capital just started coverage, and its $45 target price tops the $41.32 consensus target. Thursday’s close was at $36.21.

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These seven top Dividend Aristocrats are trading at very reasonable levels, pay solid dividends and, most of all, are solid and safe ideas in a market that looks poised to trade lower after a big run over the past six weeks. They all will not only hold up if the selling does indeed return but offer outstanding total return potential in 2023.

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