10 Best US Dividend Aristocrats to Own

Investors often buy dividend aristocrats because they expect companies with a history of dividend growth to be able to continue to grow their dividends in the future. In addition, dividend aristocrats are mature companies with sufficient earnings to continue to increase their dividends and are run by management teams that prioritize dividends in the capital structure.

That being said, dividend aristocrats aren’t immune to dividend cuts. Early in 2024, for instance, onetime dividend aristocrat Walgreens Boots Alliance WBA cut its dividend nearly in half.

How can investors avoid those dividend aristocrats that may be more likely to cut their dividends?

“Companies with wide economic moats have been less likely to cut dividends than companies with narrow moats,” explains Morningstar Indexes strategist Dan Lefkovitz. “No-moat businesses are most likely to cut.”

To come up with our list of the best dividend aristocrats to buy, we screened on the following:

• Dividend stocks included in the ProShares S&P 500 Dividend Aristocrats ETF NOBL
• Dividend aristocrats with Morningstar Economic Moat Ratings of narrow or wide

These are the dividend aristocrats from the screen that are trading at the largest discounts to Morningstar’s fair value estimates. Data is as of Jan. 24, 2025.

The 10 Best US Dividend Aristocrats to Buy Now

These undervalued stocks have wide or narrow economic moats and have grown their dividends for at least 25 consecutive years.

1. Albemarle ALB
2. Brown-Forman BF.B
3. Becton Dickinson BDX
4. Kenvue KVUE
5. ExxonMobil XOM
6. Medtronic MDT
7. PepsiCo PEP
8. A.O. Smith AOS
9. General Dynamics GD
10. Chevron CVX

Here’s a little bit from the Morningstar analyst who covers each company, along with some key metrics for each dividend stock. All data is as of Jan. 24, 2025.

Albemarle

• Morningstar Price/Fair Value: 0.39
• Morningstar Uncertainty Rating: Very High
• Morningstar Economic Moat Rating: Narrow
• Trailing Dividend Yield: 1.81%
• Sector: Basic Materials

Albemarle tops our list of the best dividend aristocrats: The stock trades a whopping 61% below Morningstar’s fair value estimate of $225. We assign the world’s largest lithium producer a Very High Uncertainty Rating, thanks to the volatility of lithium prices. Morningstar strategist Seth Goldstein calls the company’s dividend policy “easily manageable,” as dividends have averaged just 17% of net income over the last five years. “We think this is appropriate, as lithium prices will be likely to remain volatile and a lower payout ratio makes it more likely Albemarle will be able to continue to grow the dividend,” he adds.

“Albemarle is one of the world’s largest lithium producers, which generates the majority of total profits. It produces lithium through its own salt brine assets in Chile and the United States and two joint venture interests in Australian mines, Talison (Greenbushes) and Wodgina. The Chilean operation is among the world’s lowest-cost sources of lithium. Talison is one of the best spodumene resources in the world, which allows Albemarle to be one of the lowest-cost lithium hydroxide producers as spodumene can be converted directly into hydroxide. Wodgina is another high-quality spodumene asset that provides Albemarle with a third large resource, though it has a higher cost versus Talison. Albemarle also owns resources in the US and Argentina that are still in the early development phase, which should allow it to boost its lithium volumes through the development of new projects in the coming decades.

“As electric vehicle adoption increases, we expect double-digit annual growth in global lithium demand. However, global lithium supply is also growing rapidly in response. Albemarle is growing its lithium volumes through the buildout of new lithium refining plants but has largely paused new expansion plans in light of cyclically low lithium prices. As prices recover, we expect Albemarle will increase its lithium refining capacity largely through brownfield expansions at existing operations.

“Albemarle is the world’s second-largest producer of bromine, a chemical used primarily in flame retardants for electronics. Bromine demand should grow over the long term as increased demand for use in servers and automobile electronics is partially offset by a decline in demand from TVs, desktops, and laptops. Over the long term, we expect Albemarle to generate healthy bromine profits due to its low-cost position in the Dead Sea.

“Albemarle is also a top producer of catalysts used in oil refining and petrochemical production. These chemicals are highly tailored to specific refineries. However, this business has been structured to run separately from the rest of the company and may be divested in the future.”

Seth Goldstein, Morningstar strategist

Read Morningstar’s full report on Albemarle.

Brown-Forman

• Morningstar Price/Fair Value: 0.62
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Wide
• Trailing Dividend Yield: 2.59%
• Sector: Consumer Defensive

The first wide moat stock on our list of undervalued dividend aristocrats, Brown-Forman trades 38% below our fair value estimate. The manufacturer of premium distilled spirits, including Jack Daniels, earns that wide economic moat rating because of its strong brand loyalty and tight client relationships, explains Morningstar analyst Dan Su. We expect dividend payments to grow alongside earnings. We think shares are worth $55.

“We award a wide economic moat rating to Brown-Forman, based on strong brand intangible assets and cost advantages associated with the spirits maker’s premium American whiskey portfolio that makes up two thirds of total revenue.

“With over 150 years of distilling experience specializing in Tennessee whiskey and Kentucky bourbon, Brown-Forman has earned accolades and loyalty from drinkers for distinct flavors and consistent quality, building strong brand equity for its core Jack Daniels’ trademark in the US and globally. We are constructive on the growth prospects of the premium spirits maker, as its high-end positioning in the structurally attractive whiskey category (where a lengthy maturation process creates significant entry barriers) aligns well with the industry’s premiumization trend. Beyond this, we surmise the firm is poised for volume expansion, thanks to a strong innovation pipeline promising new releases not only in whiskeys and tequilas, but also in the attractive fast-growing ready-to-drink category. In particular, close collaboration with wide-moat Coca-Cola for the global launch of the Jack and Coke premix cocktail should allow the distiller to capitalize on demand tailwinds and benefit from Coke’s distribution clout. Additionally, recent entry into new categories of gin and rum via acquisitions of super-premium brands should broaden the appeal of Brown-Forman’s overall alcohol portfolio and add a new avenue of growth, though the revenue contribution will likely remain small in the near future.

“Brown-Forman’s growth outlook is not without risks though. The distiller and its spirits peers face growing tax and regulatory headwinds in developed countries, where rising excise taxes on alcohol products and health warning labels make spirits more expensive and less desirable. The proliferation of craft distillers, while not an immediate threat to well-liked and widely distributed brands such as Jack Daniels, could ultimately chip away at the firm’s loyal customer base by offering a refreshing alternative. That said, we expect Brown-Forman will continue to thrive, thanks to its advantaged competitive position and the Brown family’s long-term focus.”

Dan Su, Morningstar analyst

Read Morningstar’s full report on Brown-Forman.

Becton Dickinson

• Morningstar Price/Fair Value: 0.75
• Morningstar Uncertainty Rating: Narrow
• Morningstar Economic Moat Rating: Medium
• Trailing Dividend Yield: 1.60%
• Sector: Healthcare

Becton Dickinson is the lowest-yielding stock on our list of dividend aristocrats to buy. We think the world’s largest manufacturer and distributor of medical surgical products has carved out a narrow economic moat. Morningstar director Alex Morozov calls the company’s cash flow “fairly predictable” and its longevity of its strong returns on capital “particularly remarkable.” The stock looks attractive, trading 25% below our fair value estimate of $325.

“After a tumultuous few years, Becton Dickinson is undergoing a course correction. The covid revenue windfall has been reinvested, which should lift the firm’s core business growth in the coming years as testing revenue has faded. With Alaris returned to the market, the last remaining uncertainty has been resolved, although it is still to be seen whether the damage experienced by the franchise will be long-lasting or whether the infusion system can rapidly regain its market-leading share. The initial trajectory is encouraging.

“Historically, BD was considered a virtually recession-resistant business. The essential nature of many of BD’s medical products had typically shielded the firm from any capital spending-related volatility, and this business continued to fare fine during the covid-induced hospital admission deceleration. However, many of the businesses acquired with Bard have exposed BD to revenue volatility. Combined with the setbacks and revenue deceleration in the peripheral segment, the Bard acquisition has not been a smashing success. We’re not quite ready to call that deal capital-destructive, but the steep price paid has given BD very little margin for error.

“The Alaris recall also represented a significant blemish on the company’s previously very clean execution record. The magnitude of the damage to the pump franchise is still not certain, but based on early momentum, we think BD should retain many of its installations. The company needs almost flawless execution in the upcoming years to reverse investors' skepticism regarding its performance.”

Alex Morozov, Morningstar director

Read Morningstar’s full report on Becton Dickinson.

Kenvue

• Morningstar Price/Fair Value: 0.80
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Wide
• Trailing Dividend Yield: 3.90%
• Sector: Consumer Defensive

At first glance, it doesn’t seem like consumer health powerhouse Kenvue should qualify for our list of the top dividend aristocrats: After all, it was only spun off from Johnson & Johnson JNJ in 2023. “It’s deemed an aristocrat because of J&J’s long history of dividend increases,” explains David Harrell, editor of Morningstar DividendInvestor. J&J has averaged a payout ratio of 60% over the past 10 years, and Morningstar expects Kenvue to do the same. Kenvue stock is 20% undervalued relative to our $26 fair value estimate.

“Kenvue is the world’s largest pure-play consumer health company by revenue, generating $15 billion in annual sales. Formerly known as Johnson & Johnson’s consumer segment, Kenvue spun off and went public in May 2023. We expect Kenvue, with the freedom to allocate capital and invest as a stand-alone entity, to prioritize growing its 15 priority brands (including Tylenol, Nicorette, Listerine, and Zyrtec) to drive future growth. We forecast the company to spend roughly 3% of sales in research and development, on par with some of its wide-moat competitors, to launch innovative products, specifically in digital consumer health. Recent examples include the Nicorette QuickMist SmartTrack spray and Zyrtec AllergyCast app.

“Kenvue has been rationalizing its portfolio through a reduction in a number of stock-keeping units and business selloffs (15 divestitures from 2016-22). Now that most of this optimization is behind us, we expect a more agile portfolio. Macro factors such as an aging population, premiumization of consumer healthcare products, and growing emerging markets should provide tailwinds for Kenvue’s wide array of brands. We also expect Kenvue to benefit from an increasing digital investment—71% of the company’s marketing spending in 2022 was digital versus 44% in 2019—as this should fuel both e-commerce and in-person store sales.

“We expect margin expansion from two channels: favorable pricing dynamics and improving supply chain efficiencies. Our analysis tells us that Kenvue has been able to stay ahead of its markets in terms of price hikes, and we expect this trend to continue thanks to its products’ strong brand power. Amid the current inflationary environment, we have seen Kenvue wisely pass along rising costs through robust price hikes, with 7.7% of sales growth achieved from price and mix during 2023. We also expect cost savings over the next five years from supply chain optimization initiatives as Kenvue dedicates roughly 60% of capital expenditures to automation and digitalization of its manufacturing and distribution network, improving end-to-end integration.”

Keonhee Kim, Morningstar analyst

Read Morningstar’s full report on Kenvue.

ExxonMobil

• Morningstar Price/Fair Value: 0.80
• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: Narrow
• Trailing Dividend Yield: 3.53%
• Sector: Energy

Trading 20% below our fair value estimate, ExxonMobil is one of two oil giants on our list of dividend aristocrats to buy. The oil behemoth struggled to pay and modestly raise its dividend in 2020 (it increased its debt to do so), but recent actions to reduce costs and capital spending should keep the dividend on track in the future, says Morningstar director Allen Good. We think ExxonMobil stock is worth $135.

“Exxon is departing from industry trends by increasing spending to deliver $20 billion in earnings growth by 2030. Although the higher spending might sound alarming given the industry’s history of pursuing growth at the expense of returns, Exxon’s differentiated portfolio should enable it to do so while maintaining capital discipline and delivering returns. Its differentiated Guyana position and enlarged Permian position remain at the core of its portfolio, which offers capital-efficient volume and earnings growth. Meanwhile, the breadth of its downstream businesses opens new low-carbon business opportunities.

“Going beyond the headline of increased spending—$27 billion to $29 billion in 2025 and $28 billion to $33 billion annually from 2026 to 2030—reveals hydrocarbon investment will remain flat even as production grows from 4.3 mmboed in 2024 to 5.4 mmboed in 2030. This is thanks to over 70% of upstream investment going toward the Permian, Guyana, and LNG, where Exxon has realized material capital efficiency gains. These areas should also deliver margin expansion, adding $9 billion in earnings.

“Unlike some peers, Exxon will continue to grow Permian volumes from 1.5 mmboed in 2025 to 2.3 mmboed in 2030.

“Based on volume growth and cost reductions, another $8 billion of earnings growth will come from product solutions—refining, chemicals, and specialty products.

“By 2030, Exxon expects to deliver about $3 billion in earnings from new businesses in the production solutions and low-carbon segments, which span resins, low-emission fuels, carbon capture and storage, lithium, and low-carbon hydrogen. Spending on these lower emissions areas totals $30 billion through 2030 but requires policy support and market development. Thus, if the earnings don’t materialize, Exxon won’t invest.

“The large portion of short-cycle spending, including the Permian, affords Exxon flexibility in the event of lower prices. Even so, with the current plan, growing cash flow results in falling reinvestment rates to 2030 and a $30/bbl dividend breakeven. So, as the higher spending breaks with peers, the earnings and cash flow growth and delivery of higher returns justify it.”

Allen Good, Morningstar director

Read Morningstar’s full report on ExxonMobil.

Medtronic

• Morningstar Price/Fair Value: 0.81
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Narrow
• Trailing Dividend Yield: 3.09%
• Sector: Healthcare

Medtronic stock looks 19% undervalued relative to our $112 fair value estimate. One of the world’s largest medical-device companies, Medtronic aims to return a minimum of 50% of its annual free cash flow to shareholders but has been in the 60% to 70% range in recent years, observes Morningstar senior equity analyst Debbie Wang. We think distributions have been appropriate.

“Medtronic’s standing as the largest pure-play medical-device maker remains a force to be reckoned with in the med-tech landscape. Pairing Medtronic’s diversified product portfolio aimed at a wide range of chronic diseases with its expansive selection of products for acute care in hospitals has bolstered Medtronic’s position as a key partner for its hospital customers.

“Medtronic has historically focused on innovation, designing and manufacturing devices to address cardiac care, neurological and spinal conditions, and diabetes. All along, the firm has largely remained true to its fundamental strategy of innovation. It is often first to market with new products and has invested heavily in internal research and development efforts as well as acquiring emerging technologies. However, in the postreform healthcare world where there are higher hurdles for securing reimbursement for next-generation technology, Medtronic has slightly shifted its strategy to include partnering more closely with its hospital clients by offering greater breadth of products and services to help hospitals operate more efficiently. By collaborating more closely and integrating itself into more hospital operations, Medtronic is well positioned to take advantage of more business opportunities in the value-based reimbursement environment, in our view. In particular, Medtronic has been pioneering risk-based contracting around some of its cardiac and diabetes products, which we think is attractive to hospital clients and payers alike.

“As with many devicemakers, Medtronic has augmented its internal innovation with acquisitions of technology platforms, running the risk of overpaying. The large acquisition of Covidien depressed returns for far longer than typically seen among devicemakers when engaging in mergers and acquisitions. We remain wary that Medtronic, by virtue of its size and cash flows, remains one of the few medical device competitors that could entertain another truly large acquisition.”

Debbie Wang, Morningstar senior analyst

Read Morningstar’s full report on Medtronic.

PepsiCo

• Morningstar Price/Fair Value: 0.86
• Morningstar Uncertainty Rating: Low
• Morningstar Economic Moat Rating: Wide
• Trailing Dividend Yield: 3.57%
• Sector: Consumer Defensive

The last of three consumer defensive stocks on our list of the best dividend aristocrats, PepsiCo stock trades 14% below our $174 fair value estimate. The consumer products giant has carved out a wide economic moat based on the strength of its well-known brands, including Pepsi, Gatorade, Lay’s, Cheetos, and Doritos, among others, says Morningstar’s Dan Su. Su expects dividends to grow 7% annually during the next decade, with a payout ratio rising to 72% by 2033.

“Following years of anemic growth due to operational missteps and underinvestments, management has worked to right PepsiCo’s ship, even amid pandemic-related disruptions and input cost inflation. But we think there is more room to go, as the firm benefits from secular tailwinds in the snack business, growth initiatives in select attractive beverage subcategories (such as energy drinks) and various emerging markets (such as Latin America, Africa, and Asia-Pacific), and an integrated business model facilitating more effective commercialization.

“Tight retail relationships on the back of strong beverage and snack brands, coupled with massive distribution scale and bargaining edge, underpin our wide moat rating, and we don’t foresee this position as wavering. For one, we see Pepsi’s convenient snack lineup as well placed to bolster its share by leveraging unrivalled brand awareness, operational scale, and retail relations. Within its beverage mix, the firm is exploring a variety of options from nascent, in-house brands to brand licensing from third-party category leaders to expand its sales exposure in nonsparkling categories. This can add to the firm’s distribution clout and augment its carbonated drinks that have struggled thus far to narrow the gap with wide-moat Coca-Cola.

“Demand for snacks and beverages tends to remain resilient throughout economic cycles, and a large end-to-end supply chain gives Pepsi better control over execution, helping to shield its operations from exogenous shocks. Risks and uncertainties abound, nonetheless, including inroads from e-commerce and hard discounters that introduce more competition and disrupts the pricing structure; consumption pattern shifts driven by health awareness; and cumbersome regulations and taxes that discourage the use of plastic packaging and the intake of sugar, sodium, and saturated fat. That said, a nimble and pragmatic approach, coupled with inherent brand prowess and manufacturing/distribution scale, should enable the firm to navigate the evolving competitive landscape while enhancing its returns.”

Dan Su, Morningstar analyst

Read Morningstar’s full report on PepsiCo.

A.O. Smith

• Morningstar Price/Fair Value: 0.86
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Wide
• Trailing Dividend Yield: 1.84%
• Sector: Industrials

The first of two industrials stocks on our list of the best dividend aristocrats, A.O. Smith stock trades 14% below our fair value estimate of $82. The company’s well-positioned North America water heater and boiler business benefits from brand intangible assets and cost advantages that underpin its wide economic moat rating, explains Morningstar director Brian Bernard. We expect the company to continue to prioritize growing the dividend, especially considering the company’s consistent free cash flow generation and conservative balance sheet, he adds.

“A.O. Smith Corporation is a pure-play water technology company, with leading market share for both residential and commercial water heaters in North America. Acquisitions in the early- to mid-2000s consolidated the North American water heater market and cemented the company’s leading market position. A.O. Smith bolstered its boiler market share with its 2011 acquisition of Lochinvar. This was a savvy move, in our view, as the company paid a fair price to expand in an adjacent market with a margin-accretive product line. Still, water heaters and boilers are a mature market in North America with limited growth potential. As such, to boost the firm’s growth prospects, management entered China in 1995, India in 2008, and the water treatment market in 2016 with its acquisition of Aquasana.

“This year will likely prove to be disappointing for North America water heaters with little growth, and the Chinese market has been very challenging due to a housing downturn there. However, North America boilers and water treatment have been bright spots with both product lines poised to deliver solid growth in 2024.

“Over the next five years, management is targeting consolidated revenue to grow at a 5%-6% compound annual rate, with roughly mid-single-digit percentage growth from water heaters and boilers in North America and similar growth in China. Double-digit growth is expected both in the nascent Indian market as well as for North American water treatment products. Targeted EPS growth is 7%-9%, primarily the result of margin expansion from A.O. Smith’s less-mature businesses. Assuming China recovers and the US avoids a recession, this outlook seems realistic to us, but continued water treatment acquisitions will be needed, in our view. We believe the company’s wide moat will support steady mid-20% operating margins for the combined North America water heater and boilers businesses over the next few years.”

Brian Bernard, Morningstar director

Read Morningstar’s full report on A.O. Smith.

General Dynamics

• Morningstar Price/Fair Value: 0.88
• Morningstar Uncertainty Rating: Low
• Morningstar Economic Moat Rating: Wide
• Trailing Dividend Yield: 2.13%
• Sector: Industrials

General Dynamics is the fifth and final wide-moat stock on our list of best dividend aristocrats to buy. The aerospace and defense giant earns that wide moat because its product complexity thwarts new entrants and leads to high switching costs for its buyer, says Morningstar analyst Nic Owens. Owens expects the company to be able to continue to grow its dividend, thanks to the stability of its business model. General Dynamics stock trades 12% below our $302 fair value estimate.

“Regulated margins, mature markets, customer-paid research and development, and long-term revenue visibility allow defense contractors to deliver a lot of cash to shareholders, which we view positively because we don’t see substantial growth in this industry. Defense budgets usually ebb and flow with a nation’s wealth and its perception of danger. In the US, both have been on the rise, and among many allies, notably Germany and Japan, geopolitics is leading to larger military budgets than we’ve seen for decades. For perspective, we estimate that the portions of the US defense budget relevant to contractors like General Dynamics and its competitors and subcontractors shrank between 2012 and 2017 by 2.6% annualized while these budgets grew between 2018 and 2023 by 6.5% annualized. We think the contractors’ budget will continue to grow with modernization, but more moderately, averaging around 2.5%-3.0% over the next five years.

“General Dynamics' defense portfolio is mostly dialed in for low-single-digit growth for the foreseeable future, with some business lines, including submarines, slated to offer slightly faster growth. In all these businesses, the goal for General Dynamics is to execute on delivering and work out more efficient processes to gain incremental profitability, which the company has a record of achieving.

“General Dynamics’ Gulfstream segment primarily produces long-range wide-cabin business jets. This market is low volume, with fewer than 200 global deliveries each year and many repeat customers. New, quality product drives demand in this segment, so the company must continuously convince customers that it has built a better aircraft. Gulfstream dominates volume in this segment, with roughly 50% market share, which leads to superior margins as it progresses along the learning curve. We anticipate deliveries of new G700 and G800 models will be major sales drivers as initial supply chain wrinkles are ironed out.”

Nic Owens, Morningstar analyst

Read Morningstar’s full report on General Dynamics.

Chevron

• Morningstar Price/Fair Value: 0.88
• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: Narrow
• Trailing Dividend Yield: 4.19%
• Sector: Energy

Chevron rounds out our list of best dividend aristocrats to buy; it’s also the highest-yielding stock in the group. Morningstar’s Good calls Chevron’s dividend levels “appropriate” and thinks there’s room for growth. Chevron stock trades at a 12% discount to our $176 fair value estimate.

“We expect Chevron to deliver higher returns and margin expansion, thanks to an oil-leveraged portfolio as well as the next phase of growth, which is focused on developing its large, advantaged Permian Basin position.

“Its latest capital plan maintains its focus on capital discipline without sacrificing growth. Thanks to improved cost efficiencies, Chevron plans to increase production to nearly 4.0 million barrels of oil equivalent per day by 2027 from about 3.0 mmboe/d in 2023. New volumes will largely come from new production from its Permian Basin position (differentiated by size, quality, and lack of royalties), where it expects to grow volumes to 1.25 mmboe/d by 2027 from about 700 mboe/d in 2022 while delivering returns of nearly 30% and about $5 billion of free cash flow by 2027.

“Permian growth will be supplemented by expansion projects at Tengiz in Kazakhstan, new developments in the Gulf of Mexico, potential new discoveries in Mexico and Brazil, and offshore gas fields in the Eastern Mediterranean.

“Oil and gas prices will dictate Chevron’s earnings and cash flow for the foreseeable future. However, the company is investing in low-carbon businesses to adapt to the energy transition. It recently tripled its investment to $10 billion cumulatively by 2028, with this capital flowing to emerging low-carbon areas that fit with Chevron’s existing value chains and experience. Greenhouse gas reduction projects and carbon capture and offset will enable Chevron to achieve its emission targets, while investments in hydrogen and renewable fuels will give it a toehold in emerging businesses that could expand in the future.

“Although specific targets will probably change if the Hess acquisition closes, we expect Chevron to maintain its overall strategic direction. This means the combination of new higher-margin projects along with ongoing cost reductions and operational improvements will drive return on capital employed higher. Also, strong free cash flow will go toward steady dividend growth and repurchases, demonstrating management’s ongoing commitment to capital discipline and shareholder returns.”

Allen Good, Morningstar director

Read Morningstar’s full report on Chevron.

Should You Buy Dividend Aristocrats?

Dividend aristocrats can be compelling investments, but they have their caveats.

For starters, dividend aristocrats can, in fact, cut their dividends if business conditions warrant. “A streak of annual dividend increases of any length provides no guarantee that a company’s dividend is secure,” argues Morningstar’s Harrell. He points to VF VFC and AT&T T as recent examples of one-time dividend aristocrats that’ve cut their dividends during the past few years.

Moreover, dividend aristocrats aren’t necessarily high-dividend stocks. Harrell estimates that about 40% of the dividend aristocrats yield less than 2%. “Twenty-five years of consecutive dividend growth doesn’t necessarily result in a high-yielding stock,” he notes.

And lastly, dividend aristocrats aren’t attractive unless they’re underpriced—at least not in our book. Overpaying for a stock simply because it has a solid history of dividend growth only increases the price risk in your portfolio.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.