Up to date on January thirty first, 2025 by Bob Ciura
To be able to develop into a Dividend Aristocrat, an organization should have a robust model and a dominant {industry} place. The Dividend Aristocrats are a gaggle of 69 corporations within the S&P 500 Index, with 25+ consecutive years of dividend will increase.
With this in thoughts, we’ve got created a listing of all 69 Dividend Aristocrats.
You possibly can obtain your free copy of the Dividend Aristocrats checklist, together with essential monetary metrics akin to price-to-earnings ratios and dividend yields, by clicking on the hyperlink beneath:
Disclaimer: Certain Dividend shouldn’t be affiliated with S&P International in any approach. S&P International owns and maintains The Dividend Aristocrats Index. The knowledge on this article and downloadable spreadsheet is predicated on Certain Dividend’s personal assessment, abstract, and evaluation of the S&P 500 Dividend Aristocrats ETF (NOBL) and different sources, and is supposed to assist particular person traders higher perceive this ETF and the index upon which it’s primarily based. Not one of the data on this article or spreadsheet is official knowledge from S&P International. Seek the advice of S&P International for official data.
An ideal instance of a Dividend Aristocrat with an industry-leading model is client merchandise firm McCormick & Firm (MKC).
McCormick has paid dividends annually since 1925 and has elevated its dividend for 39 years in a row.
Its dividend development streak is because of its high-quality enterprise. McCormick is the worldwide chief in meals spices, seasonings, and flavors. It has grown its management place organically and likewise via acquisitions.
This has fueled McCormick’s dividend development for a few years.
Enterprise Overview
McCormick was fashioned in 1889, when founder Willoughby M. McCormick began making flavors and extracts in his cellar, which he then offered door-to-door. At first, the enterprise grew at a gradual tempo.
In 1896, McCormick entered spices by issuing its first McCormick’s Cookbook. Over time, the corporate has steadily constructed itself into the main spices and seasonings firm on the planet.
McCormick & Firm produces, markets, and distributes seasoning mixes, spices, condiments, and different merchandise to clients within the meals {industry}.
Main manufacturers embody McCormick, Lawrys, Stubb’s, Membership Home, Ducros, Schwartz, Kamis, Kohinoor, Zatarains, Thai Kitchen, and Merely Asia.
On January twenty third, 2025, McCormick reported fourth-quarter and full year-results for the interval ending November thirtieth, 2024.
Supply: Investor Presentation
For the quarter, income grew 2.7% $1.8 billion, which was $28 million greater than anticipated. Adjusted earnings-per-share of $0.80 in contrast unfavorably to $0.85 within the prior 12 months, however this topped estimates by $0.03.
Quantity and blend improved 2.2% whereas pricing was weaker by 0.4%. The Shopper phase grew 2.4% for the interval. Quantity and blend enhancements (+3.7) have been solely partially offset by pricing (-1.3%).
The Americas had natural development of three.7% as quantity features have been offset by decrease costs. EMEA continues to carry out nicely, with gross sales larger by 2.9% as quantity and blend have been up 4.9%.
Asia/Pacific decreased 10.3% attributable to weaker ends in China. Taste Options grew 0.8% as pricing (+1.0%) was offset by decrease volumes (-0.2%). The Americas grew 1.4% attributable to higher pricing.
EMEA decreased 4.0% as demand from fast service eating places was down. Asia/Pacific returned to development as gross sales have been up 6.5% attributable to will increase in quantity associated to promotions and new merchandise.
McCormick’s gross margin expanded 20 foundation factors to 40.2% for the quarter and improved 90 foundation factors to 38.5% for the 12 months.
For the 12 months, income grew 1% to $6.7 billion whereas earnings-per-share of $2.92 in comparison with $2.52 within the prior 12 months.
Progress Prospects
Going ahead, there may be loads of room for continued development for McCormick, attributable to development within the rising markets, and likewise acquisitions.
First, worldwide development is a robust catalyst for McCormick. The gradual reopening of China following strict pandemic-related restrictions is already benefiting the corporate.
Larger demand for herbs and spices, in addition to elevated costs additionally contributed to gross sales development within the area. Individually, acquisitions are a serious a part of McCormick’s development technique.
In 2018, McCormick acquired Frank’s RedHot and French’s as a part of a $4.2 billion buy of RB Meals, the meals division of client merchandise big Reckitt Benckiser (RGBLY).
This was the biggest deal in McCormick’s historical past, and has been a serious driver of development over the previous a number of years.
Supply: Investor Presentation
McCormick has utilized its management place in {industry} to rapidly broaden these prime manufacturers globally. Frank’s RedHot is the main scorching sauce model within the U.S., whereas French’s leads the mustard class.
The widespread theme inside McCormick’s M&A method is that it seeks out prime manufacturers that lead their respective classes, that may be simply scaled up.
This theme is evident as soon as once more with the current acquisitions of Cholula Sizzling Sauce and FONA Worldwide.
First, in November 2020 McCormick acquired Cholula, the premium Mexican scorching sauce model, for $800 million. This acquisition suits completely into McCormick’s technique of buying top-quality manufacturers and rapidly scaling them.
McCormick adopted this up with the December 2020 acquisition of FONA Worldwide, a number one producer of fresh and pure flavors with clients throughout the meals, beverage, and dietary markets.
McCormick acquired FONA Worldwide for $710 million in money.
We anticipate that the corporate’s numerous acquisitions, mixed with its personal sturdy manufacturers, will lead to sturdy earnings-per-share development going ahead.
We estimate that McCormick can develop earnings at a fee of seven% per 12 months via fiscal 2030.
Aggressive Benefits & Recession Efficiency
The 2 most essential aggressive benefits for McCormick are its model power and international scale. McCormick is the highest model within the international spices and seasonings {industry}, which is anticipated to develop for the following 5 years.
In consequence, this provides McCormick leverage with retailers and pricing energy. These qualities assist the corporate generate constant earnings annually, even when the economic system enters recession.
McCormick managed to develop earnings-per-share annually over the past recession. Earnings-per-share through the Nice Recession are beneath:
- 2007 earnings-per-share of $1.92
- 2008 earnings-per-share of $2.14 (11% improve)
- 2009 earnings-per-share of $2.34 (9.3% improve)
- 2010 earnings-per-share of $2.65 (13% improve)
As you possibly can see, McCormick & Firm grew earnings-per-share yearly via the Nice Recession.
Not solely that, the corporate averaged double-digit annual development annually, which was extremely spectacular and a really uncommon accomplishment, even for a Dividend Aristocrat.
Valuation & Anticipated Returns
On the midpoint of full-year steerage, McCormick expects adjusted earnings-per-share of roughly $3.02 this 12 months. In consequence, the inventory trades at a ahead price-to-earnings ratio of 25.6.
That is barely above our honest worth price-to-earnings ratio of ~25.
McCormick’s valuation a number of has expanded significantly in recent times, as the corporate has turned in sturdy earnings development. Now, the inventory seems to be barely overvalued.
If the P/E a number of contracts to our goal P/E by 2030, the corresponding influence would cut back shareholder returns by -0.5% per 12 months over the following 5 years.
Shareholder returns may also be derived from anticipated earnings development and dividends. The corporate’s sturdy model and a number of catalysts for future development ought to add as much as larger EPS development as nicely.
We anticipate MKC to develop its EPS by 7% per 12 months, whereas the inventory has a 2.3% present dividend yield. Whole annual returns might attain 8.8% per 12 months over the following 5 years, making the inventory a purchase.
Ultimate Ideas
McCormick dominates the spices and seasonings class. Its sturdy manufacturers present the corporate with high-profit margins and development alternatives, each within the U.S. and the worldwide markets.
McCormick has a market-beating dividend yield of two.3%, and has a really sturdy dividend development historical past. The corporate ought to have the ability to elevate the dividend annually, probably at a mid-to-high single-digit annual fee.
With an anticipated fee of return of 8.8% yearly going ahead, we fee the inventory a maintain.
Moreover, the next Certain Dividend databases comprise probably the most dependable dividend growers in our funding universe:
In case you’re on the lookout for shares with distinctive dividend traits, think about the next Certain Dividend databases:
The most important home inventory market indices are one other stable useful resource for locating funding concepts. Certain Dividend compiles the next inventory market databases and updates them month-to-month:
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