3 Dividend Aristocrat Stocks To Buy in May and Hold Forever
The stock market has been on a winning streak as fears about tariffs start cooling. Earnings season has also been solid, and most tech companies have trounced estimates so far. As such, many investors have started to buy back in despite the long-term macro outlook still hanging in the balance.
It isn’t a bad idea to buy the dip on certain stocks since the administration has softened its stance on tariffs. China is reportedly considering engaging in tariff talks with the US, and the effective embargo is unlikely to last too long as inventories run out.
Markets have mostly tumbled due to tariffs, so any news of tariffs being pulled back should lead to a recovery in the stock market. But even then, the negative GDP report in Q1 and the sudden shock with rapid changes in trade policy could lead to a downturn down the line. “Liberation Day” tariffs and the escalation with China began in April, so the true impact of these tariffs could be ahead. And a negative GDP report in Q2 implies a technical recession.
With that in mind, it’s still a good idea to add some ballast to your portfolio in the form of Dividend Aristocrat stocks.
T Rowe Price (TROW)
T Rowe Price (NASDAQ:TROW) is trading at historically cheap prices, and while it hasn’t been exactly stable in the past five years, it has now returned to prices that are hard to ignore. The stock surged in the second half of 2020 before languishing in the following years. It mostly traded in the $90 to $130 range since the latter half of 2022, and we’re currently at the lower end of this range.
Regardless, the technicals aren’t the only thing that’s good here. It is trading at a bargain valuation at just 10 times earnings. Historically, the median here has been around 15 times. The company also posted better-than-expected earnings in Q1 despite net outflows. The company reported net outflows of $8.6 billion in Q1 2025, mainly from U.S. equities, though this is less than half of the previous quarter’s outflow of $19.3 billion. But even then, Q1 EPS of $2.23 came in above the $2.12 consensus.
Rowe Price’s 5.54% dividend yield places it near the top of the dividend aristocrat list. In fact, among S&P 500 companies that have increased dividends for at least 25 consecutive years, TROW ranks second highest in yield, and only Franklin Resources (NYSE:BEN) has a higher yield at 6.76%. This company has also been doing buybacks in addition to its dividends and has plenty of cash to keep doing so. The market’s pessimism seems to be pricing in short-term challenges, but the long-term picture is less dire than the recent price action suggests.
West Pharmaceutical Services (WST)
West Pharmaceutical Services (NYSE:WST) has earned the unfortunate distinction of being among the worst-performing big S&P 500 companies so far this year. Shares are down nearly 35% year-to-date after a Q4 earnings report that had weak guidance for the year.
If you’ve been a shareholder here before late January, you’re probably not the happiest. But now that much of the expected underperformance for this year has been priced in, WST may have turned into an opportunity.
The company beat Q4 2024 earnings expectations with adjusted EPS of $1.82 versus $1.72 consensus, but investors have fixated on the underwhelming guidance. The initial 2025 guidance projected adjusted EPS of $6 to $6.2, which is well below analyst expectations of $7.44. The revenue forecast of $2.875 billion to $2.905 billion also came in lower than the consensus of $3.04 billion.
In its Q1 2025 earnings release on April 24, West Pharmaceutical reported better-than-expected results with net sales of $698 million and organic growth of 2.1%, so the market may have overreacted. Management also increased its full-year guidance and now sees net sales of $2.945 billion to $2.975 billion and adjusted EPS of $6.15-$6.35.
I don’t see the stock’s dividend yield as its main appeal, but it has increased its dividend at approximately 5% to 6% annually in recent years. The main draw is the safety and upside potential from current prices.
The consensus price target of $274.5 implies 30% upside. Even the lowest price target of $245 implies solid upside potential for a dividend aristocrat stock.
FactSet Research (FDS)
FactSet Research (NYSE:FDS) won’t excite you much either with its dividend yield, as it sits at around 1%, but the company is still a Dividend Aristocrat and has raised its dividend from $1.04 to $1.1 per share just this month. This is likely a company you’ve heard of a few times if you read stock market-related news, and that’s one example of how integrated it is into Wall Street. As long as the broader financial services sector grows, so will FactSet.
It has a sticky client base, and the company is returning more cash as it matures. The dividend payout ratio is only 24%, so there’s room for more down the line. Q2 2025 revenue rose 4.5% year-over-year to $570.7 million, with organic subscription value up 4.1% and adjusted EPS up 1.4%.
I see FDS as a core holding for dividend growth investors who can tolerate a lower yield in exchange for solid consistency and a wide economic moat. There are better options if you want fast gains, but if you want a stock you can buy and forget, FactSet fits the bill.
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