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These 3 Stocks Could Soon Be Dividend Aristocrats

Income investing is a typical style in the market, with market participants aiming to reap a passive income stream and grow their investments through price appreciation.

And when it comes to dividends, many have heard of the Dividend Aristocrats. It’s an elite club consisting of only companies that are S&P 500 members and have increased their dividend payouts for a minimum of 25 consecutive years.

Interestingly enough, several companies – Qualcomm QCOM, Analog Devices ADI, and W.R. Berkley WRB – are not far away from bursting into the club. Let’s take a closer look at each one.

Qualcomm

Qualcomm designs, manufactures, and markets digital wireless telecom products and services based on the Code Division Multiple Access (CDMA) technology. Currently, QCOM’s annual dividend yields 2.8%, more than triple the Zacks Computer and Technology sector average.

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Zacks Investment Research


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In addition, QCOM shares are cheap on a relative basis, with the current 11.5X forward earnings multiple sitting nowhere near the 20.3X five-year median and the Zacks sector average.

The stock presently carries a Style Score of “B” for Value.

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Zacks Investment Research


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Analog Devices

Analog Devices is an original equipment manufacturer of semiconductor devices, specifically analog, mixed-signal, and digital signal-processing integrated circuits. Impressively, the company has grown its payout by 12% over the last five years.

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Zacks Investment Research


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ADI boasts a stellar earnings track record, exceeding the Zacks Consensus EPS and Sales estimates in 11 consecutive quarters. In its latest release, the semiconductor player posted a 3.5% EPS beat and reported revenue 3.5% ahead of expectations.

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Zacks Investment Research


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W.R. Berkley

W.R. Berkley is a leader in commercial lines insurance divided into two segments: Insurance and Reinsurance and Monoline Excess. Currently, the company’s annual dividend yields 0.7%, undoubtedly on the lower end of the spectrum.

Still, the company’s 10% five-year annualized dividend growth rate helps pick up the slack in a big way.

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Zacks Investment Research


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In addition, it’s hard to ignore the company’s 18% trailing-twelve-month return on equity (ROE), indicating a higher level of generating profits from existing assets relative to the Zacks Finance sector average.

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Zacks Investment Research


Image Source: Zacks Investment Research

Bottom Line

Income investors commonly target Dividend Aristocrats, as these companies have displayed a commitment to increasingly rewarding their shareholders.

And all three stocks above – Qualcomm QCOM, Analog Devices ADI, and W.R. Berkley WRB – are on track to join the elite club.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Analog Devices, Inc. (ADI) : Free Stock Analysis Report

QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report

W.R. Berkley Corporation (WRB) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research