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Most are familiar with Dividend Aristocrats, S&P 500 companies that have increased dividend payouts for at least 25 consecutive years.
And a step above that is the elite Dividend Kings group, which are companies that have boosted their payouts for a minimum of 50 consecutive years.
It’s undoubtedly a major positive to see companies consistently upping their payouts throughout history, reflecting their shareholder-friendly nature and successful business operations.
Interestingly enough, several companies – Sherwin-Williams SHW, Aflac AFL, and Atmos Energy Corp. ATO – are all gearing up to join the elite club.
In addition to their shareholder-friendly nature, all three sport a favorable Zacks Rank, indicating optimism among analysts. For those interested in reaping a steady and reliable income stream, let’s take a closer look at each.
Aflac
Aflac is an American insurance company and a massive supplier of supplemental insurance within the U.S. Analysts have taken their earnings expectations modestly higher across the board, helping to land the stock into a Zacks Rank #2 (Buy).
AFL shares currently yield 2.2% annually, just a tick below its Zacks Insurance – Accident & Health industry average. The company’s dividend payout has grown by a solid 12.4% annualized over the last five years.
In addition, AFL shares aren’t overly expensive given the company’s forecasted growth, with shares trading at a current 12.8X forward earnings multiple (F1). Aflac’s earnings are forecasted to climb 12.2% in its current year.
Sherwin-Williams
Sherwin-Williams, a Zacks Rank #1 (Strong Buy), manufactures paints, coatings, and other related products. Analysts raised their expectations across the board in a big way following the company’s latest quarterly release.
Regarding the mentioned quarter, Sherwin-Williams posted a sizable 21% EPS beat and reported revenue 3.7% ahead of expectations, with the market reacting favorably to the print post-earnings.
The company’s revenue has remained on a healthy trend, with the $6.2 billion mark in its latest release reflecting a quarterly record.
Currently, SHW shares yield 0.9% annually, below its Zacks industry average by a fair margin. Still, the company’s 17% five-year annualized dividend growth rate helps to pick up the slack.
Atmos Energy
Atmos Energy and its subsidiaries are engaged in regulated natural gas distribution and storage business. Like the stocks above, analysts have raised their earnings outlook, with the stock currently carrying a Zacks Rank #2 (Buy).
ATO shares currently pay 2.5% annually, with the company’s payout ratio sitting at 50% of its earnings. And over the last five years, the payout has grown by 9% annualized.
In addition, the company sports solid growth expectations, with earnings forecasted to climb 8% in its current fiscal year on 22% higher revenues. Looking ahead to FY24, expectations allude to a further 6.7% of bottom line growth paired with a 10% revenue boost.
Bottom Line
Dividend-paying stocks deserve a spot in nearly every portfolio, as the payouts help limit drawbacks in other positions, provide a passive income stream, and provide the ability to achieve maximum returns through dividend reinvestment.
And for those seeking companies with a long track record of boosting payouts, all three stocks above – Sherwin-Williams SHW, Aflac AFL, and Atmos Energy Corp. ATO – precisely fit the criteria.
Besides their shareholder-friendly natures, all three sport a favorable Zacks Rank, indicating optimism among analysts.
The Sherwin-Williams Company (SHW): Free Stock Analysis Report
Aflac Incorporated (AFL): Free Stock Analysis Report
Atmos Energy Corporation (ATO): Free Stock Analysis Report
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This article originally appeared on Zacks
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