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The Dividend Aristocrats have increased their dividends every year for at least 25 years in a row. With their long dividend growth track records, throughout all kinds of crises, including the coronavirus pandemic, the Great Recession, and more, Dividend Aristocrats can make for good income investments for income investors.

This article will discuss 3 top Dividend Aristocrats with current yields above 3%.

Johnson & Johnson (JNJ)

Johnson & Johnson is a diversified healthcare company and a leader in the area of pharmaceuticals and medical devices Johnson & Johnson was founded in 1886 and employs more than 152,000 people around the world. The company is projected to generate approximately $89 billion in revenue this year.

On January 23rd, 2024, Johnson & Johnson announced fourth quarter and full-year results for the period ending December 31st, 2023. For the quarter, revenue grew 7.3% to $21.4 billion, which was $380 million more than expected. Adjusted earnings-per-share of $2.29 compared to $2.35 in the prior year, but was $0.01 ahead of estimates.

For the year, revenue grew 6.5% to $85.2 billion while adjusted earnings-per-share of $9.92 compared to $10.15. Adjusting for the spinoff off Kenvue, adjusted earnings-per-share increased 11.1% from $8.93 in the prior year.

Johnson & Johnson offered guidance for 2024 as well. The company expects revenue in a range of $88.2 billion to $89 billion, representing sales growth of 5% to 6%, and adjusted earnings-per-share in a range of $10.55 to $10.75 for the year.

Johnson & Johnson has a reasonably low dividend payout ratio of 45% for 2024. This gives the company ample room to raise its dividend, even in a prolonged recession. JNJ has increased its dividend for 61 years. Shares currently yield 3.0%.

Kimberly-Clark (KMB)

The Kimberly-Clark Corporation is a global consumer products company that operates in 175 countries and sells disposable consumer goods, including paper towels, diapers, and tissues. It operates through two segments that each house many popular brands: Personal Care Segment (Huggies, Pull-Ups, Kotex, Depend, Poise) and the Consumer Tissue segment (Kleenex, Scott, Cottonelle, and Viva), generating over $20 billion in annual revenue.

Kimberly-Clark posted fourth-quarter and full-year earnings on January 24th, 2024, and results were weaker than expected on both the top and bottom lines. Adjusted earnings-per-share came to $1.51, which was three cents light of estimates. Revenue was flat year-over-year at $4.97 billion, which missed estimates fractionally. Organic sales were up 3% during the quarter, attributable to a 2% gain in pricing and a 1% tailwind from favorable product mix.

While Kimberly-Clark has not meaningfully grown its revenue for years, it has managed to grow its earnings-per-share thanks to share repurchases and its cost reduction programs. With operating margins rising steadily over time, increasing profitability is working to offset somewhat weak revenue numbers. Kimberly-Clark’s management team has continuously extended this initiative, aiming for another $1.5 billion of cumulative savings over the three-year period.

Kimberly-Clark’s competitive advantage is in its longstanding dominance with a variety of its brands, which are well known in the marketplace. With a dividend payout ratio of approximately 70% for 2024, the dividend is secure. KMB currently yields 3.9%.

Hormel Foods (HRL)

Hormel Foods operates in the food products industry with over $12 billion in annual revenue. Hormel has kept its core competency as a processor of meat products for well over a hundred years but has also grown into other business lines through acquisitions. The company sells its products in 80 countries worldwide, and its brands include Skippy, SPAM, Applegate, Justin’s, and more than 30 others.

Hormel posted fourth-quarter and full-year earnings on November 29th, 2023, and results were weaker than expected on both the top and bottom lines. Adjusted earnings-per-share came to 42 cents, missing estimates fairly widely by three cents, or ~7%. Revenue also fell 2.6% year-over-year to $3.2 billion, missing estimates by $70 million, or ~2%. Adjusted operating income came to $313 million, or 9.8% of revenue. Adjusted before-tax operating earnings came to $289 million. Cash flow from operations came to $319 million.

Hormel’s main competitive advantage is its ~40 products that are either #1 or #2 in their category. Hormel has brands that are proven, and that leadership position is difficult for competitors to supplant. In addition, Hormel has a global network of distributors that few food companies can rival.

Hormel boosted its dividend by 2.7% to a new payout of $1.13 per share annually, its 58th consecutive annual dividend increase. Hormel’s payout ratio is just over 70% of earnings, which indicates a secure dividend. HRL currently yields 3.7%.

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