Stocks

DRIP Stocks: 15 No-Fee Dividend Aristocrats

DRIP Stocks: 15 No-Fee Dividend Aristocrats by Sure Dividend

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DRIP stands for Dividend ReInvestment Plan. This means that the dividends a company pays are used to purchase more shares in the company.

DRIP investing basically converts a company’s dividends into share repurchases – allowing you to ‘double down’ on your favorite businesses.

Many businesses offer DRIP plans that charge fees. The fewer fees one pays in investing, the more money they have left to compound in their account. As a general rule, investors are better off avoiding fee-based DRIPs.

There are no-fee DRIPs as well. These allow you to build up large positions in high quality businesses quicker than normal by reinvesting dividends.

Dividend Aristocrat stocks are a perfect complement to DRIPs. To qualify to be a Dividend Aristocrat, a stock must have 25+ years of consecutive dividend increases. Click here to see a list of all 52 Dividend Aristocrats.

This means that Dividend Aristocrats pay you more every year. No-fee DRIP Dividend Aristocrats combine free dividend reinvestment with continuously rising dividends – think of it as a share repurchase plan that rises every year.

This article takes a look at the 15 Dividend Aristocrats that offer no-fee DRIPs.

The complete list of all 15 No-Fee DRIP Dividend Aristocrats is below:

  • Aflac (AFL)
  • AbbVie (ABBV)
  • Abbott
  • HCP, Inc. (HCP)
  • Emerson Electric (EMR)
  • Hormel Foods (HRL)
  • Ecolab (ECL)
  • ExxonMobil (XOM)
  • Genuine Parts Company (GPC)
  • Illinois Tool Works (ITW)
  • Johnson & Johnson (JNJ)
  • 3M
  • Sherwin-Williams (SHW)
  • McGraw Hill Financial
  • Nucor

Aflac: Supplemental Health Insurance No-Fee DRIP Dividend Aristocrat

Aflac is the global leader in supplemental health insurance. The company is well known in the United States, but actually generates just 25% of its premiums from the United States. The remaining 75% are generated in the land of the rising sun – Japan.

60 years ago brothers John, Paul, and William Amos founded Aflac in Columbus, Georgia. Aflac stands for – American Family Life Assurance Company of Columbus. That’s quite a strange name for such a Japanese-centric company. Aflac first expanded to Japan in 1970, and hasn’t looked back since.

Aflac has paid increasing dividends for 32 consecutive years. The company’s stock currently has a 2.7% dividend yield. In addition, the company regularly repurchases significant amounts of shares. In 2015 alone, Aflac plans to repurchase $1.3 billion of its outstanding shares. That’s a tremendous amount of cash to return to shareholders in one year for a company with a market cap of around $25 billion.

Over the last decade, Aflac has compounded its earnings-per-share at 12.6% a year. This is excellent growth for an established business. Aflac has managed to compound its earnings by using cash generated from its insurance operations to repurchase shares. The company’s supplemental policies are very profitable. Aflac typically maintains a combined ratio of around 85% – meaning that 15% of its premium income goes straight to the bottom line. This does not even factor in additional investment income from the company’s large insurance float.

Aflac is currently trading for a price-to-earnings ratio of just 9.7… This is far too low for such a profitable insurance company. Fears of Japan’s faltering economy slowing growth have long hampered Aflac’s valuation multiples. The company’s combination of excellent earnings-per-share growth, a very shareholder friendly management, strong competitive advantage, and compelling valuation make Aflac a long-time favorite of The 8 Rules of Dividend Investing.

AbbVie: Biopharmaceutical No-Fee DRIP Dividend Aristocrat

AbbVie was created in 2013 when Abbott Laboratories spun-off much of its pharmaceutical business.

You may be wondering… “how can AbbVie be a Dividend Aristocrat if it was created 2 years ago?” AbbVie was created in recent history, but the company’s parent company (Abbott Laboratories) has paid increasing dividends for 43 consecutive years. AbbVie inherited Abbott Laboratories’ dividend history. AbbVie has paid increasing dividends each year since its creation in 2013.

A ‘spin-off’ gives the idea that a business is small. This is not true in AbbVie’s case. AbbVie currently has a market cap over $97 billion – nearly 4 times as large as the well-known business analyzed above.

AbbVie currently has a forward price-to-earnings ratio of just 11.8 and a healthy 3.5% dividend yield. The company looks cheap at first glance. Yet, AbbVie has the highest qualitative risk of any Dividend Aristocrat.

That’s because just one product accounts for 65% (!) of the company’s sales. That product is Humira. Humira is used to treat rheumatoid arthritis, plaquie psoriasis, Crohn’s disease, ulcerative colitis, and other similar ailments. There’s nothing wrong with running a concentrated business… Except for one thing – Humira’s patents begin expiring at the end of 2016. This could spell trouble for AbbVie.

Now it should be clear why AbbVie is far riskier than its low price-to-earnings ratio and large market cap would otherwise indicate. Despite its shareholder friendly management which offers sizeable dividend payments and a no-fee DRIP plan, AbbVie does not offer the level of safety that Dividend Aristocrat investors have come to expect.

Abbott Laboratories: Emerging Market Health Care No-Fee DRIP Dividend Aristocrat

Abbott Laboratories is one of the largest and most respected health care corporations in the world. The company is well diversified. Abbott manufactures and sells the following:

  • Medical devices
  • Nutrition products
  • Diagnostic equipment
  • Generic pharmaceuticals

The company’s most well known brands to consumers are: Similac, Ensure, and Pedialyte. Abbott Laboratories is not a new company… It was founded in 1888 in Chicago Illinois by Dr. Wallace Abbott. Dr. Abbott helped popularize pills, which he called dosimetric granules. He typically produced morphine, codeine, quinine, and strychnine dosimetric granules.

Abbott Laboratories has a long history of rewarding shareholders as well. The company has paid increasing dividends for 43 consecutive years (excluding the effects of spin offs). Abbott Laboratories currently offers investors a 2.2% dividend yield. The company has a payout ratio of just 31.2%, making future dividend growth exceptionally likely.

The global population is growing. Emerging markets are seeing rapid growth in per-capita GDP. Abbott Laboratories is well aware of these trends. The company has positioned itself to take advantage of emerging market growth. Abbott Laboratories now generates 100% of its generic pharmaceutical revenues in emerging markets. The company saw constant currency sales grow 10.8% in its most recent quarter. The company will very likely reward shareholders with solid growth for decades to come as it continues to play long-term demographic trends.

Abbott Laboratories is a high quality business trading at a fair price. The company is currently trading for a price-to-earnings ratio (using adjusted earnings) of 18.6. The company has a shareholder friendly management and a long growth runway.

HCP, Inc: Health Care REIT No-Fee DRIP Dividend Aristocrat

HCP, Inc. operates a portfolio of approximately 1,200 health care properties in the US and British Isles.

The company is best known for its senior housing and post acute/skilled care facilities. Together, these two types of facilities account for about two-thirds of HCP, Inc’s income.

HCP, Inc. was founded in 1985 and has increased its dividend payments every single year. The company is a member of a select group of stocks that has a dividend yield over 5% and 25 or more consecutive years of dividend increases. Click here to see 12 high quality stocks with 5%+ dividend yields. HCP, Inc stock currently has a 6.2% dividend yield.

Over the last decade HCP, Inc. has grown its dividend payments at just 3% a year – only about 1 percentage point faster than inflation.. Funds-from-operations-per-share, however, have grown at 5.8% a year.

As a REIT, HCP, Inc is required to pay out nearly all of its profits as dividends. Slowly reducing the payout ratio gives the company room to continue raising dividend payments if earnings fall somewhat.

Despite mediocre growth, investors can expect solid total returns from HCP, Inc. Expected total returns are between 9% and 12% a year from dividends (~6%) and growth (3% to 6%).

Continued growth will come from two macroeconomic trends:

  • Aging population in the U.S. and U.K.
  • Greater health care expenditures as a percentage of GDP in the U.S. and U.K.

In the final anlaysis, HCP, Inc. is a high quality business with above-average expected total returns. The company appears to be fairly valued or slightly undervalued given its current dividend yield of 6.3%. HCP, Inc’s dividend yield has fluctuated between 4.5% and 7.5% over the last decade.

Emerson Electric: Industrial Manufacturing No-Fee DRIP Dividend Aristocrat

Emerson Electric is a large diversified manufacturer. The company has more than 230 manufacturing facilities and over 130,000 employees spread around the world. The company currently has a market cap of nearly $30 billion. Emerson Electric is truly a global business. The company generates less than 50% of its revenue in the United States and Canada.

The company was founded 125 years ago (in 1890) in St. Louis, Missouri. Emerson Electric was originally an electric motor and fan manufacturer. Scotland born brothers Charles and Alexander Meston founded the company, with financial help from judge and lawyer (and company namesake) John Wesley Emerson.

Emerson Electric not only has a long corporate history – it also has a long history of rewarding shareholders with rising dividends. The company has paid increasing dividends for an amazing 57 consecutive years. This makes Emerson Electric a member of the exclusive Dividend Kings – stocks with 50+ consecutive years of dividend increases. Click here to see all 16 Dividend Kings analyzed.

Over the last decade, Emerson Electric has compounded its earnings-per-share at 4.9% a year. The company currently has a dividend yield of 4.1%. A compound growth rate of around 5% is not spectacular – it is mediocre at best.

What makes Emerson Electric a compelling investment is its low valuation. The company is currently trading for a price-to-earnings ratio of just 12.6. With a ~4% dividend yield and a ~5% compound growth rate, investors can expect total returns of around 9% a year from Emerson Electric – before valuation multiple changes.

Hormel: Packaged Food No-Fee DRIP Dividend Aristocrat

Hormel Foods sells much more than packaged meat products. The image below shows the company’s impressive portfolio of well-known brands:

DRIP Stocks No-Fee Dividend Aristocrats

Hormel Foods is one year younger than Emerson Electric… The company was founded in 1891 by George Hormel (of the company’s namesake) in Austin, Minnesota. Today, Austin Minnesota has a population of just under 25,000. Hormel Foods employees nearly as many people as the town in which it started; Hormel Foods has approximately 20,500 employees.

The company has done more than grow its employee count. Hormel has paid increasing dividends for 49 consecutive years. In 2016, the company will become a Dividend King.

The company is not done growing yet. Hormel Foods recently acquired organic lunch meat leader Applegate Farms for $775 million. The company has compounded earnings-per-share at 10.5% a year over the last decade. Growth has been very consistent for Hormel Foods. The company has increased earnings-per-share in 27 out of its last 30 years.

Going forward, Hormel should continue to grow its earnings-per-share quickly I expect the company’s earnings-per-share to grow at between 9% and 11% a year over the next several years. This growth combined with the company’s 1.6% dividend yield gives investors an expected total return of 10.6% to 12.6% a year.

The downside to Hormel Foods is its current high valuation. The company is trading for a price-to-earnings ratio of 24.8. This is well above the S&P 500’s price-to-earnings ratio of 19.9, and significantly above Hormel Food’s historical average price-to-earnings ratio. Patient investors should wait for a better entry point into this high quality branded food business.

EcoLab: Clean Soultions No-Fee DRIP Dividend Aristocrat

Like Hormel Foods, EcoLab was founded in Minnesota.   EcoLab got its start in Saint Paul, Minnesota in 1923. Merritt Osborn founded the company when he invented a new carpet spot cleaner. EcoLab stands for Economics Laboratory – reflecting its original mission to save customers time, labor, and money.

Today, EcoLab is a diversified global business with a $32.1 billion market cap. The company manufactures and sells a variety of cleaning and treatment products and services used in warewashing (restaurant scale dish washing), food and beverages, pulp and paper, laundry, housekeeping, and oil and gas.

EcoLab has managed to grow its earnings-per-share at an impressive 13.6% a year over the last decade. The company will experience somewhat slower growth as its oil and gas servicing segment falters due to low oil prices. Still, the company has very favorable long-term growth prospects.

EcoLab has paid increasing dividends every year since 1985. While this is an impressive streak, the company’s dividend yield is much less impressive… EcoLab has a payout ratio of 30.6% and a dividend yield of just 1.2%. The company does not provide much in the way of current income.

Additionally, EcoLab is trading at a lofty price-to-earnings multiple of 26.8. The company’s high price-to-earnings multiple combined with a low dividend yield makes now a poor time to initiate a position in EcoLab.

Despite this, EcoLab is a high quality business that has great long-term growth prospects as efficiency and safety become increasingly important in the world. Enterprising investors will keep an eye out for a significant drop in EcoLab’s share price to initiate a position in this high quality business.

ExxonMobil: Oil Giant No-Fee DRIP Dividend Aristocrat

ExxonMobil is the largest publicly traded oil and gas corporation in the United States based on its market cap of over $300 billion.

The company has a long corporate history that dates back to John Rockefeller’s Standard Oil. Based on its industry leading size and history, ExxonMobil is the corporate successor to Standard Oil.

ExxonMobil has increased its dividend payments each year for 33 consecutive years. The company currently has a 4.0% dividend yield… Which is extremely unusual for ExxonMobil.

Low oil prices have caused ExxonMobil stock to fall more than 20% in the last year. ExxonMobil is trading near dividend yield highs not seen in over a decade. Now is historically the best time to buy ExxonMobil (for dividend investors) in the last 10 years.

With that said, ExxonMobil has not delivered much growth over the last decade. The company has realized earnings-per-share growth of just 3.4% a year over this time period. When oil prices rise, however, so will ExxonMobil’s earnings.

Over the long run, ExxonMobil’s growth prospects are positive. Global energy demand will increase as the worldwide population rises and more people are lifted out of poverty. More people with more money means more demand for energy – and oil.

As discussed above, now is a historically excellent time to buy into this blue chip industry leading oil giant. Click here to see more bargain-priced blue chip stocks.

Oil prices are volatile; they rise and fall. There’s no reason to believe that this time is different and we are stuck with permanently low oil prices. When oil prices rise, ExxonMobil share holders will likely see significant capital gains.

Genuine Parts Company: Auto Care No-Fee DRIP Dividend Aristocrat

Genuine Parts Company is not a household name. United States based investors are likely more familiar with Genuine Parts Company’s automotive segment; NAPA Auto Parts.

In addition to NAPA Auto Parts, Genuine Parts Company also owns industrial parts distributor Motion Industries, office products distributor SP Richards, and electrical/electronic materials distributor EIS.

Genuine Parts Company was founded in 1928 and now has a market cap of $12.6 billion. The company has expanded outside North America. Genuine Parts Company now owns Repco – another auto parts company – which has operations in Australia and New Zealand.

The company has a long history of dividend payments as well. In fact, Genuine Parts has increased its dividend payments for 59 consecutive years – one of the longest active streaks of any business. With a payout ratio of 51.1% and positive growth prospects, the company’s dividend streak will very likely continue far into the future.

Genuine Parts Company has compounded earnings-per-share at about 7% a year over the last decade. The company’s long-term goal is to deliver earnings-per-share growth of 7% to 10% a year. I believe the company will continue to deliver growth of around 7% a year; at the low end of management’s estimates. This growth combined with the company’s current dividend yield of 3.0% gives investors total expected returns of around 10% a year.

With expected total returns of 10% a year, Genuine Parts Company should outperform the S&P 500 over the long run. The company is currently trading for a price-to-earnings ratio of 17.9. For comparison, the S&P 500 is currently trading for a price-to-earnings ratio of 19.9. Based on this, Genuine Parts Company appears slightly undervalued relative to the S&P 500.

Illinois Tool Works: Diversified Manufacturing No-Fee DRIP Dividend Aristocrat

Don’t let the Illinois in Illinois Tool Works fool you; the company is a global business.  Illinois Tool Works generates about 50% of its revenue in the US and 50% internationally.

The company was founded in 1912 and has grown reach a market cap of $30 billion with 51,000 employees in 26 countries. The company was founded by financier Byron Smith in Chicago. The company operates in 7 distinct business units:

  • Automotive OEM
  • T&M Electronics
  • Food Equipment
  • Polymers & Fluid
  • Welding
  • Construction Products
  • Specialty Products

Illinois Tool Works is diversified both geographically and through its 7 business units. This diversification has allowed the company to grow consistently. Shareholders have benefited greatly from Illinois Tool Works’ consistent growth. Case-in-point: the company has paid increasing dividends for 52 consecutive years.

Over the last decade Illinois Tool Works has compounded its earnings-per-share at 6.7% a year. Much of the company’s growth comes from share repurchases. Over the last decade, diluted weighted shares outstanding have decreased at a rate of 4.2% a year. Illinois Tool Work’s management aims for revenue growth of 2% to 3% a year – which is in line with historical averages. The company will likely continue to compound earnings-per-share at around 7% a year. This growth combined with the company’s current dividend yield of 2.7% gives investors expected total returns of 9.7% a year.

Illinois Tool Works is an exceptionally shareholder friendly company as evidenced by its large share repurchases and long streak of dividend increases. The company’s expected total returns are slightly higher than the S&P 500’s long-term compound annual growth rate of 9.1% a year. Despite this, Illinois Tool Works is trading for a price-to-earnings ratio of just 16.6 – versus 19.9 for the S&P 500. As a result, I believe Illinois Tool Works to be somewhat undervalued at current prices relative to the S&P 500.

Johnson & Johnson: Global Health Care Giant No-Fee DRIP Dividend Aristocrat

Johnson & Johnson is perhaps the most stable business in the world based on its almost impossible streak of adjusted earnings-per-share increases. Johnson & Johnson has increased its adjusted earnings-per-share for 31 consecutive years. I know of no other business that can match this impressive feat

In addition to its long streak of earnings-per-share growth, Johnson & Johnson has also increased its dividends-per-share for 52 consecutive years.

Johnson & Johnson was founded in 1886 in New Brunswick, New Jersey by the three Johnson brothers: Robert Wood Johnson, James Wood Johnson, and Edward Mead Johnson. The company has been wildly successful since then; Johnson & Johnson now has a market cap of well over $250 billion.

The company operates in 3 large segments:

  • Consumer
  • Pharma
  • Medical Devices

The company’s pharma segment is actually its largest, followed by medical devices and then consumer. Investors are probably most familiar with the company’s portfolio of high quality consumer brands which includes: Motrin, Tylenol, Benadryl, Zyrtec, Band-Aid, Listerine, Aveeno, Neutrogina, and Johnson’s.

The pharmaceutical segment’s key drugs are: Zytiga for prostate cancer, Remicade for Crohn’s disease and Ulcerative Colitis, Invega Sustenna for schizophrenia, Olysio for Hepatitis, Stelara for plaque psoriasis and psoriatic arthritis, and Simponi for rheumatoid arthritis.

The company’s medical devices segment generates 85% of sales from products with #1 or #2 market share position.

Johnson & Johnson has grown earnings-per-share at 6.1% a year over the last decade. The company currently has a 3.2% dividend yield. If Johnson & Johnson maintains its average growth rate over the last decade, investors can expect total returns of around 9% a year – with very little risk due to the company’s diversification and high quality brands.

The company is currently trading for a price-to-earnings ratio of 16.4. Like many of the stocks in this article, Johnson & Johnson appears somewhat undervalued relative to the S&P 500 given its expected total returns and high marks for safety.

3M: Large-Cap Diversified Manufacturing No-Fee DRIP Dividend Aristocrat

3M was founded in 1902 in Two Harbors, Minnesota. The ‘3 M’s’ stand for Minnesota Mining and Manufacturing Company.

Today, 3M has a market cap of nearly $88 billion and generates more than $30 billion in sales a year. The company employs over 80,000 people. For comparison, Tow Harbors Minnesota (where the company was originally founded) has a total population of under 4,000.

3M is a very shareholder friendly company. Not only does the company offer investors a no-fee DRIP, it has also paid increasing dividends for 56 consecutive years. 3M has managed to increase its dividend payments every year for more than 5 decades thanks to its diversified approach to business.

The company operates in 5 segments. Each segment is listed below:

  • Industrial
  • Health Care
  • Safety & Graphics
  • Electronics & Energy
  • Consumer

Investors are probably most familiar with the company’s consumer segment. The consumer segment includes well known brands like: Filtrete, Command, and Post-It, among others.

Over the last decade, 3M has compounded earnings-per-share at 6.9% a year. The company’s long-term growth goal is 9% to 11% earnings-per-share growth per year. It is unlikely that 3M’s management can boost its earnings-per-share growth 2% to 4%. I expect growth closer in line to the company’s historical average of around 7% a year. This growth combined with the company’s current dividend yield of 2.9% gives investors expected total returns of about 10% a year.

3M is currently trading for a price-to-earnings ratio of 18.4. The company is likely trading at fair value or is just slightly undervalued. 3M is an extremely high quality and shareholder friendly business trading at a fair price.

Sherwin-Williams: Coatings No-Fee DRIP Dividend Aristocrat

Sherwin-Williams sells branded coating products under many well-known brands, including: Sherwin-Williams, Dutch Boy, Krylon, Minwax, and Thompson’s Water Seal, among others. The company is the largest producer of paints in the United States.

The company currently generates the bulk of its revenue and profits in the United States, but is expanding in Latin America, Europe, and Asia.

Sherwin-Williams was founded in 1866 in Cleveland, Ohio by Henry Sherwin and Edward Williams (hence the name Sherwin-Williams). The company has grown tremendously since that time and now has a market cap of $23.5 billion.

Dividends have increased each year for Sherwin-Williams investors since 1979. The company’s long dividend streak shows the stability and slow rate of change in the coatings industry.

The paint industry may not strike investors as fast-growing, but Sherwin-Williams has delivered earnings-per-share growth of 11.6% a year over the last decade. Nearly 4% of this growth is a result of share repurchases. Operating margins have also improved over the last decade from 12.5% in 2014 to 13.8% in 2014. The paint industry is consolidating, resulting in higher margins for the largest players.

Investors should expect continued growth from Sherwin-Williams as long as the economy stays out of recession. Sherwin-Williams earnings-per-share were virtually flat from 2006 through 2011 when the economy was sputtering (or just beginning to recover). The company grows rapidly during times of prosperity, but shows little-to-no growth during recessions.

Sherwin-Williams is currently trading for a rich valuation multiple of 25.6. Investors are clearly impressed with the company’s rapid earnings growth in recent years. With another global downturn looming and an above-average price-to-earnings ratio, now is not the best time to start a position in Sherwin-Williams stock.

McGraw Hill Financial: Financial Data No-Fee DRIP Dividend Aristocrat

The S&P 500 is constantly mentioned in finance and investing circles. McGraw Hill Financial owns the Standard & Poor’s (S&P) name. McGraw Hill Financial is one of the global leaders in financial ratings and research.

The company can trace its origins back to 1917 when the McGraw Publishing Company and the Hill Publishing Company merged (hence the name McGraw Hill). In 2012, McGraw Hill Financial sold its publishing division to Apollo Global to focus on its more profitable financial division.

Since the divestiture, the company has rewarded shareholders through share repurchases, rising dividends, and strong growth both organically and through acquisitions.  Excluding the effects of spin-offs, McGraw Hill Financial has paid increasing dividends to its shareholders for 42 consecutive years.

McGraw Hill Financial is expected to grow its earnings-per-share at around 10% a year over the next several years. The company’s growth will come from two primary sources.

First, the company enters into licensing agreements with ETFs to use its well known index names (like S&P 500 or S&P Dividend Aristocrats). ETFs are expected to continue stealing market share from actively managed mutual funds – because they offer investors lower expense ratios. As long as investors keep piling cash into the market, ETF assets should rise – as should McGraw Hill Financial’s profits.

Second, the company generates revenue by rating corporate and government debt. Interest rates are being kept artificially low through central bank policies meant to stimulate growth. Low interest rates encourage debt issuance – a net positive for McGraw Hill Financial.

As long as interest rates remain low and the market stay out of recession, McGraw Hill will likely realize double-digit earnings-per-share growth. Bear markets cause investors to pull out of stocks (at exactly the wrong time…), which reduces McGraw Hill Financial’s profits.

The best time to pick up shares of McGraw Hill Financial will be when we have a combination of a bear market and high interest rates. This will cause the company’s earnings to fall and result in an excellent opportunity to buy the company at a bargain. Now, however, is not that time.

Nucor: Steel No-Fee DRIP Dividend Aristocrat

Nucor revolutionized the steel industry. The company has not laid off an employee due to work shortages in over 30 years. Additionally, the company pioneered ‘pay for performance’ in the steel industry. Workers at Nucor tend to be highly motivated (and highly compensated) relative to their peers at other companies.

The story of Nucor steel really begins in 1965 – the year Ken Iverson took over the company. Iverson’s unique approach to business (rewarding and incentivizing employees exceptionally well) lead to rapid growth. 30 years later (in 1995), Iverson stepped down as CEO.

To be blunt, Nucor has not performed well since 2008. In 2008, the company had earnings-per-share of $6.01. In full fiscal 2014, the company had earnings-per-share of just $2.22. The company is struggling to compete with low-priced international steel manufactures who are subsidized by their respective governments. In addition, the recent slow-down in emerging markets has impacted the company.

Despite declines in recent years, Nucor has an impressive dividend streak. The company has paid rising dividends every year since 1973. Declining earnings have caused the company’s payout ratio to rise significantly, however. Nucor currently has a payout ratio of 73%.

It is difficult to envision Nucor reclaiming its once rapid growth. The company’s best days are likely behind it. I believe Nucor to be one of the riskiest Dividend Aristocrats. The company’s qualitative risks are near that of AbbVie.

While it’s not impossible the company turns around, there are certainly safer investments to be made. Uncertainty surrounding Nucor has made the stock fairly cheap. The company is trading for a forward price-to-earnings ratio of 13.5. While this is lower than many of the high quality businesses on this list, Nucor’s lack of safety makes it a riskier investment than most other Dividend Aristocrats.

Final Thoughts & Additional Resources

No-fee DRIP investing is a robust investment methodology with many adherents. With that said, I prefer to reinvest dividends from my holdings into my best investment ideas rather than using a DRIP.

The 15 businesses examined in this article are all very shareholder friendly as evidenced by both their long dividend streaks and their commitment to offer investors a no-fee DRIP plans.

Several additional resources are listed below for further research:

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