For investors, 2022 was a dreadful year. The S&P 500 was down almost 20% and the Nasdaq lower by a stunning 33%. Yet, what a difference a year can make. Through Thursday, the S&P 500 was up 19.42% and the Nasdaq an astounding 36.18%. With the market rolling again, financial news talking heads and portfolio managers pitching their products like carnival barkers are everywhere.
In truth, just 10 companies have made up 95% of the gains in the S&P 500, and nine heaviest-weighted stocks in the Nasdaq 100 have accounted for almost all its gains. What do these stocks have in common? They are almost all technology stocks, and it is likely that the tech sector continues to drive the upside for the rest of the year.
One smart idea for investors who think the market has run too far too fast is to look to the Dividend Aristocrats. The 66 companies that made the cut for the 2023 S&P 500 Dividend Aristocrats list have increased dividends (not just remained the same) for 25 years straight. However, the requirements go even further. The following attributes are also mandatory for membership:
- Companies must be worth at least $3 billion at the time of each quarterly rebalancing.
- Average daily volume must be at least $5 million in transactions for every trailing three-month period at every quarterly rebalancing date.
- Companies must be a member of the S&P 500.
With the potential for some big downside still looming later this year, and interest rates that just went higher again (but may be near the top for this cycle), we thought it would be a good idea to look for companies on the Dividend Aristocrats that pay among the biggest dividends and that investors can buy now and hold forever. Seven top companies hit our screen, and while six of them are rated Buy across Wall Street by the top firms, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision. Stocks are listed by the highest dividend first.
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.
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