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Undervalued Dividend Aristocrats: The Key to Beating the Market

Do you know a selected group of stocks in the S&P 500 pay out increasing dividends every year?

By investing in stocks with impeccable dividend-paying records, we can patiently wait for the dividend income to grow every year.

We share what dividend aristocrats are, and list out the undervalued dividend aristocrats at the end. So you can enjoy growing dividend income, and a high probability of equity growth.

What Are Dividend Aristocrats?

Dividend aristocrats are stocks within S&P 500 that have increased their dividend payout for at least 25 years in a row. If you purchased a dividend aristocrat 25 years ago, you would have enjoyed growing dividend income every single year. These stocks are perfect candidates to accumulate passive income.

World-famous brands such as McDonald's and PepsiCo are examples of profitable companies that pay dividends like nobility.

Which Is Better Dividend Aristocrats or Kings?

Dividend kings have increased their dividend payout for at least 50 consecutive years, which is much longer than dividend aristocrats.

But some people may feel dividend aristocrats are safer investments because they are a part of the S&P 500 index.

Why Invest in Dividend Aristocrats?

By investing in dividend aristocrats, we can expect steady long-term passive income that grows even after a market crash.

The US stock market has experienced 7 major crashes over the last 25 years, and countless corrections.

25 year crashes
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The US stock market has experienced 7 major crashes over the last 25 years.

Every single dividend aristocrat has survived the market downturns while continuing to grow dividend payouts every year.

If you held a position in SPY during 2/18-3/18 in 2020, the value of the ETF evaporated by more than 30% in 30 days.

spy value crash
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During 2/18-3/18 in 2020, the value of SPY evaporated by more than 30% in 30 days.

If we learn to identify dividend aristocrats, we can focus our portfolio on the most recession-proof, and dividend-earning blue-chip stocks of the S&P 500 index.

Why Only Invest When the Stock Is Undervalued?

The value investing philosophy reminds us to only buy stocks when the margin of safety is large enough to give us a bullish outlook. If the Upside is big enough, we can buy blue-chip stocks at a discount.

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Shortcut to Picking Undervalued Dividend Aristocrats

We can use the Dividend & Growth Stock Screener to filter stocks that fit the dividend aristocrat criteria.

We can set the filters with:

  • Years of Dividend Growth larger than 25.
  • Upside at least 10%.
dividend aristocrat filter settings
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Filter settings to find undervalued dividend aristocrats.

To find the list of undervalued dividend aristocrats instantly.

List of Undervalued Dividend Aristocrats

We sort the dividend aristocrat list by Upside to find undervalued opportunities with healthy margins of safety.

StocksDescriptionLastFair valueUpsideDividend yieldYears of dividend growth
VFCVF Corp$27.43$60.59120.89%4.34%49
SWKStanley Black & Decker Inc$88.01$122.6039.3%3.59%55
ALBAlbemarle Corp$258.01$347.8334.81%0.55%28
WBAWalgreens Boots Alliance Inc$36.55$48.3132.18%5.22%47
MDTMedtronic PLC$84.80$111.2331.17%3.23%45
ECLEcolab Inc$162.41$211.3430.13%1.29%31
FRTFederal Realty Investment Trust$109.09$139.9828.32%3.93%55
BDXBecton, Dickinson and Co$244.52$308.0425.98%1.50%51
EMREmerson Electric Co$85.44$105.7223.74%2.43%66
ROPRoper Technologies Inc$427.68$526.1723.03%0.65%30
MMM3M Co$112.99$132.0816.9%5.31%64
APDAir Products & Chemicals Inc$279.71$324.9116.16%2.49%40
ORealty Income Corp$66.12$76.1515.17%4.61%28
BF.BBrown-Forman Corp$65.65$73.5412.02%1.25%38
DOVDover Corp$155.36$172.7811.21%1.30%67

The undervalued dividend aristocrats have a strong dividend record and a huge bullish potential.

Now you know how to find dividend aristocrats at a discount, you can purchase the best dividend stocks to grow your passive income.

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