The Dividend Aristocrats are a collection of 65 stocks in the S&P 500 Index, having paid and raised their dividends for a minimum of 25 consecutive years. That means these names have continued to grow their dividends, at least through the dot.com bubble burst, the Great Recession, and the COVID-19 pandemic without cuts or reductions. The S&P Global updates the list of Dividend Aristocrats each year, and for 2023, they added 3 new stocks, increasing the number to 65.

These stocks are an excellent place to start looking for attractive additions to a dividend growth portfolio. Hence, this article will cover the three new Dividend Aristocrats in 2023 that could provide attractive long-term income growth for investors.

3 New Dividend Aristocrats in 2023

J.M. Smucker (SJM)

J.M. Smucker (SJM) operates in the packaged food and beverages sector and owns well-known brands, including Smucker’s, Jif, Folgers, Crisco, Dunkin’ Donuts, 1850. In fact, Smucker’s is a major player in coffee. Furthermore, it also owns a pet food business with popular brands like Milk-Bone, 9Lives, and Meow Mix.

In late February, Smucker’s reported earnings results for the third quarter of fiscal year 2023. Sales grew 8%, and organic sales grew 11% over the prior year’s quarter thanks to 15% price hikes, which more than offset a (-4%) decrease in volumes. As a result, adjusted earnings-per-share decreased (-5%), from $2.33 to $2.21, but exceeded the analysts’ estimates by $0.08, as price hikes nearly offset the increased costs of commodities, ingredients, manufacturing, and packaging. 

Because of better-than-expected results and positive business trends, Smucker’s incrementally improved its outlook for the fiscal year 2023. The company now anticipates sales growth of 6.0% (vs. 5.5% to 6.5% previously) and adjusted earnings-per-share of $8.55 to $8.75 (vs. $8.35 to $8.75 previously).

Growth Drivers

Smucker’s still has several levers to pull to promote long-term growth. These options include acquisitions of smaller businesses that benefit enormously from the synergies coming with Smucker’s business network and economies of scale. 

Another growth lever is price increases. This lever is powerful because it does not require any further market share gains and instead leverages the brand power and customer loyalty the company already enjoys.

Last but not least, the company is actively repurchasing shares. This can also boost earnings-per-share and enhance the compounding of long-term returns for shareholders without needing to gain market share or raise prices.

Thanks to these initiatives, we expect the company to drive solid 5% average annual earnings-per-share growth over the long term. In addition, we have confidence in the long-term competitive viability of the firm because it has significant economies of scale and brand loyalty in the market segments it operates. 

Furthermore, Smucker’s has proven to be very recession resistant as its products are generally considered essentials rather than discretionary. In fact, during the last significant downturn, the company saw its earnings-per-share increase every year from 2007 to 2010. In addition, the stock has a 2.7% current dividend yield.

C.H. Robinson Worldwide (CHRW)

C.H. Robinson Worldwide (CHRW) operates in the transportation industry, offering mission-critical logistics solutions that generate stable performance for the firm and drive consistently growing dividend income for shareholders.

It provides clients with multimodal transportation services and third-party logistics, such as freight transportation, transportation management, brokerage, and warehousing. The modes of transportation offered are truckload, air freight, intermodal, or ocean transportation, giving it a wide range of resources to serve customers globally.

On April 26th, 2023, C.H. Robinson Worldwide reported earnings results for the first quarter of the Fiscal Year (FY) 2023. For the quarter, revenue decreased (-19.7%) to $3.3 billion from $4.1 billion in 1Q22. The revenue decrease was driven by lower ocean and truckload services pricing. In addition, gross profits decreased (-24.7%) year-over-year, while operating expenses decreased (-6.4%) to $524.6 million. The operating expenses decreased primarily due to cost optimization efforts, including reduced headcount and lower variable compensation.

Growth Drivers

Its Freight & Logistics brokerage services are capturing a rising share of the U.S. freight market and should serve as a long-term growth driver for the firm moving forward. Moreover, this trend should persist because the freight industry has been moving away from asset-based trucking companies to brokers like C.H. Robinson.

The company has increased dividends for 25 consecutive years, with a five-year dividend growth rate of 3.8%. The stock has a current yield of 2.4%.

Nordson Corporation (NDSN)

NDSN is a global giant in its industry, with a presence in over 35 countries. It engineers, manufactures, and markets products for dispensing adhesives, coatings, sealants, biomaterials, plastics, and other materials, with applications ranging from diapers and straws to cell phones and aerospace.

On February 20th, 2023, Nordson released first-quarter results for the period ending January 31st, 2023. For the quarter, the firm reported sales of $610 million, a 1% increase compared to Q1 2022, driven by organic growth of 1% and a favorable acquisition impact offset by unfavorable currency impacts. The Industrial Precision Solutions, Medical and Fluid Solutions, and Advanced Technology Solutions segments all saw sales growth of 1%, (-3%), and 14%, respectively. Nordson generated adjusted earnings per share of $1.95, a 6% decrease compared to the same prior year period.

Growth Drivers

It enjoys numerous catalysts that should drive the long-term growth of the firm along with it a steady stream of increasing dividends for shareholders. For instance, its best-in-class technology makes Nordson’s products very attractive to customers because it helps optimize productivity, reduce costs, and enjoy access to customer service globally.

Furthermore, Nordson’s growth profile is strengthened by the need for disposable goods, productivity investments, mobile computing, medical devices, and lightweight/lean vehicles, which bode well for demand growth across its product offerings. 

The company pursues growth organically and through acquisitions. For example, in 2022, Nordson completed its acquisition of CyberOptics Corporation, expanding Nordson’s product offering in the semiconductor and electronics industries. CyberOptics Corp. is a global developer and manufacturer of high-precision 3D optical sensing technology solutions. 

The company’s global presence also provides numerous potential options to further increase growth by uncovering new attractive markets to grow market share by leveraging its economies of scale, business network, and superior technology. The company retains its $1 billion backlog, which includes the CyberOptics backlog. Management expects to deliver 0% to 3% sales growth in fiscal 2023 compared to fiscal 2022. NDSN stock yields 1.2%.

Final Thoughts About 3 New Dividend Aristocrats in 2023

Dividend Aristocrats are stocks in the S&P 500 Index that have grown their dividends for at least 25 consecutive years. Most of these companies have achieved such long dividend growth streaks thanks to their strong business models, characterized by a meaningful business moat and resilience to recessions. In 2023, 3 new equities were added to the list of Dividend Aristocrats.

Dividend Aristocrats like J.M. Smucker, C.H. Robinson, and Nordson have proven effective long-term compounders of shareholder wealth and dividend income.

Disclosure: Members of the Sure Dividend team are long SJM, CHRW, and NDSN.

You can also read 3 Banks Stocks for 2023 by the same authors.

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