The 3 Highest Yielding Dividend Aristocrats Right Now

Investors that want reliable income and ongoing dividend increases in order to offset inflation, may be very interested in the Dividend Aristocrats, a group of stocks that has raised their dividend for at least 25 years in a row. 

That means that investors have gotten payout increases during all kinds of market and macro environments, including during times of crises, such as the Great Recession and the pandemic.

In this article, we'll look at the 3 highest yielding Dividend Aristocrats investors can choose from right now.

1: Realty Income (O)

• Dividend Yield: 5.5%

Realty Income is a retail real estate focused REIT that has become famous for its successful dividend growth history and monthly dividend payments. Today, the trust owns thousands of properties. Realty Income owns retail properties that are not part of a wider retail development (such as a mall), but instead are standalone properties. 

This means that the properties are viable for many different tenants, including government services, healthcare services, and entertainment. 

The REIT exceeded revenue expectations in the first quarter of 2023, reporting $1.26 billion in revenue following $598 million in investment volume. Its earnings slightly surpassed predictions, with normalized FFO per share reaching $1.05, a penny higher than the analyst estimate. This figure marked an increase from $1.00 in the previous quarter and $1.04 in the first quarter of 2023. 

Despite the positive financial performance, total expenses surged to $1.14 billion, up from $841.3 million in the prior quarter and $723.7 million a year ago, largely due to provisions for impairment and merger-related costs. 

However, Realty Income reaffirmed its 2024 guidance for normalized FFO and same-store rent growth, with expectations of acquisition volume around $2.0 billion. Realty Income emphasized the completion of $598 million in investment volume during the quarter, particularly highlighting the international growth in the U.K. and Europe, where the company achieved a weighted average cash yield of 8.2%. 

Realty Income does not generate overly high funds-from-operations growth rates on a per-share basis, but the growth that the REIT is experiencing has been very steady, coming almost every year at a mid-single digits CAGR. As a result, the REIT has been able to grow its dividend for 27 years, and is today a Dividend Aristocrat.

2: Franklin Resources (BEN)

• Dividend Yield: 5.3%

Franklin Resources, founded in 1947 and headquartered in San Mateo, CA, is a global asset manager with a long and successful history. The company offers investment management (which makes up the bulk of fees the company collects) and related services to its customers, including sales, distribution, and shareholder servicing. As of March 31st, 2024, assets under management (AUM) totaled $1.645 trillion for the company. 

On December 12th, 2023, Franklin Resources announced a $0.31 quarterly dividend, marking a 3.3% year-over-year increase and the company’s 44th consecutive year of increasing its payment. 

On April 29th, 2024, Franklin Resources reported second quarter 2024 results for the period ending March 31st, 2024. (Franklin Resources’ fiscal year ends September 30th.) Total assets under management equaled $1.645 trillion, up $189.2 billion compared to last quarter, as a result of $148.3 billion from the Putnam Investments acquisition, $38.8 billion of net market change, distributions, and other, and $6.9 billion of long-term net inflows, partly offset by $4.8 billion of cash management net outflows. 

For the quarter, operating revenue totaled $2.153 billion, up 12% year-over-year. On an adjusted basis, net income equaled $307 million or $0.56 per share compared to $317 million or $0.61 per share in Q2 2023. During Q2, Franklin repurchased 0.4 million shares of stock for $11.7 million. Franklin ended the quarter with $5.7 billion in cash and investments.

The biggest growth segment in the asset management industry is ETFs, which have much lower expense ratios than actively managed funds. Franklin’s actively managed funds have performed well, which serves as an advantage versus other active asset managers. Franklin Resources has been acquiring alternative AUM through purchases such as Legg Mason, Lexington Partners, and Alcentra. It also closed its acquisition of Putnam Investments on January 1, 2024. At the time, Putnam had $148 billion in AUM.

3: Amcor plc (AMCR)

• Dividend Yield: 5.0%

Amcor plc is one of the world's most prominent designers and manufacturers of packaging for food, pharmaceutical, medical, and other consumer products. The company emphasizes making responsible packaging that is lightweight, recyclable, and reusable. Today, the Amcor plc, which trades on the NYSE, was formed in June 2019 with the merger between two packaging companies, U.S-based Bemis Co. Inc. and Australia-based Amcor Ltd. Amcor plc's current headquarters is in Bristol, U.K. 

Amcor reported its third quarter results for Fiscal Year (FY)2024 on April 30th, 2024. The company fiscal year ends in June. Amcor's fiscal quarter ending March 2024 demonstrated resilience despite market challenges, with notable increases in key financial metrics. GAAP diluted EPS reached 12.9 cents, with GAAP net income hitting $187 million. Adjusted EBIT rose by 3% to $397 million on a comparable constant currency basis, while adjusted EPS saw a 1% increase to 17.8 cents. For the nine months ending March 31, 2024, net sales totaled $10,105 million, with GAAP net income of $473 million and a GAAP diluted EPS of 32.7 cents. 

Adjusted EPS stood at 49.1 cents, with Adjusted EBIT reaching $1,106 million. Shareholders benefited from a rise in quarterly dividends to 12.5 cents per share, alongside $30 million in shares repurchased. The outlook for Adjusted EPS for fiscal 2024 was raised to 68.5-71 cents per share, with Adjusted Free Cash Flow expected to range from $850-950 million.

Amcor anticipates sustained growth, with Adjusted EPS for fiscal 2024 projected to range from 68.5 to 71 cents per share and adjusted free cash flow estimated at approximately $850 million to $950 million. The company plans to allocate around $70 million towards share repurchases as part of its ongoing program.

The merger with Bemis brings it huge prospects in developing markets. Plus, with the merger into one gigantic manufacturing entity, Amcor has increased the ability to negotiate better costs from its suppliers. This should make Amcor an unstoppable force in the packaging industry.