Best Dividend Aristocrat Growth Picks For 2013

Buying high quality stocks at cheap prices is one of the major missions of a successful trader. Many investors fail to implement this strategy. People should buy higher valuated companies with a safer business model. I believe that if you realize a return of 5-9 percent plus a final dividend of 1-3 percent, you have made a real good investment.

With that introduction, I proceed with my 2013 stock picks. Today, Dividend Aristocrats are my main focus. Those stocks have raised dividends over a period of more than 25 consecutive years and have all been highly rated by the credit rating agency Standard & Poor’s.

These are my criteria:

- Forward P/E under 15
- Past 5Y Sales growth over 5 percent
- Earnings per share growth for the next five years over 5 percent
- Operating Margin over 5 percent

Fourteen Dividend Aristocrats fulfilled these criteria of which three yielding above three percent. Nine are currently recommended to buy. Dividend Aristocrats are not as cheap as other potential dividend growth stocks because the market has identified the quality of the stocks. Would you pay a higher price for more quality or do you prefer cheaper stocks with more return potential. Let me know your thoughts below in our comment box.

V.F. Corporation (VFC) has a market capitalization of $16.73 billion. The company employs 58,000 people, generates revenue of $9.459 billion and has a net income of $890.39 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.413 billion. The EBITDA margin is 14.95 percent (the operating margin is 13.16 percent and the net profit margin 9.41 percent).

Financial Analysis: The total debt represents 22.72 percent of the company’s assets and the total debt in relation to the equity amounts to 46.76 percent. Due to the financial situation, a return on equity of 21.18 percent was realized. Twelve trailing months earnings per share reached a value of $9.01. Last fiscal year, the company paid $2.61 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.85, the P/S ratio is 1.77 and the P/B ratio is finally 3.71. The dividend yield amounts to 2.29 percent and the beta ratio has a value of 0.89.






Medtronic (MDT) has a market capitalization of $43.29 billion. The company employs 45,000 people, generates revenue of $16.184 billion and has a net income of $3.415 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $5.127 billion. The EBITDA margin is 31.68 percent (the operating margin is 25.61 percent and the net profit margin 21.10 percent).

Financial Analysis: The total debt represents 32.14 percent of the company’s assets and the total debt in relation to the equity amounts to 62.13 percent. Due to the financial situation, a return on equity of 20.65 percent was realized. Twelve trailing months earnings per share reached a value of $3.11. Last fiscal year, the company paid $0.97 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.78, the P/S ratio is 2.67 and the P/B ratio is finally 2.59. The dividend yield amounts to 2.43 percent and the beta ratio has a value of 0.88.






Illinois Tool Works (ITW) has a market capitalization of $28.64 billion. The company employs 65,000 people, generates revenue of $17.786 billion and has a net income of $2.017 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.320 billion. The EBITDA margin is 18.67 percent (the operating margin is 15.35 percent and the net profit margin 11.34 percent).

Financial Analysis: The total debt represents 22.19 percent of the company’s assets and the total debt in relation to the equity amounts to 39.83 percent. Due to the financial situation, a return on equity of 20.60 percent was realized. Twelve trailing months earnings per share reached a value of $4.10. Last fiscal year, the company paid $1.40 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.08, the P/S ratio is 1.61 and the P/B ratio is finally 2.98. The dividend yield amounts to 2.46 percent and the beta ratio has a value of 1.16.






Take a closer look at the full list of my best Dividend Aristocrats stock picks 2013. The average P/E ratio amounts to 17.86 and forward P/E ratio is 12.88. The dividend yield has a value of 2.52 percent. Price to book ratio is 3.02 and price to sales ratio 1.49. The operating margin amounts to 13.87 percent and the beta ratio is 0.75. The average stock from the screening results has a debt to equity ratio of 0.51.

Here is the full table with some fundamentals (TTM):



Related stock ticker symbols:
T, ABT, BMS, SWK, AFL, XOM, MMM, ITW, MDT, VFC, WMT, HRL, FDO, BCR

* I am long MDT, WMT. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.

For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.