In this article, we will take a look at the 13 Cheapest Dividend Aristocrats to Invest in.
Dividend stocks have lagged the broader market recently. However, there are hints that this stretch of underperformance may be losing momentum. Artificial intelligence, which has powered much of the market’s recent gains, could eventually help narrow the divide.
In its 2026 outlook, Raymond James pointed out that the S&P 500 Dividend Aristocrats Index is enduring one of its weakest relative periods versus the S&P 500 in decades. Dividend Aristocrats are companies that have increased their dividends for at least 25 consecutive years. Historically, that track record has been associated with consistency and financial strength.
Eagle Asset Management, a Raymond James subsidiary, reviewed trailing 12-month relative returns going back to 1991 through January 31, 2026. The current slump began in May 2023. As of last month, Dividend Aristocrats were trailing the broader index by 7.3% over the prior 12 months. In December, that shortfall had reached 10.6%, suggesting the gap, while still meaningful, has begun to narrow.
John Lagowski, a portfolio manager at Eagle, stressed that dividend-paying stocks have not delivered weak returns outright. Since the start of 2022, Dividend Aristocrats and other above-median dividend payers have generated about 9% annualized returns. A small group of AI-driven mega-cap stocks has dominated index performance. The powerful earnings growth of the so-called Magnificent Seven pulled the broader market sharply higher, leaving many other companies behind on a relative basis.
Lagowski noted that the earnings gap between those leaders and the rest of the market, once wide, is now closing. As that imbalance narrows, performance leadership may continue to broaden. He expects dividend stocks’ underperformance to stabilize and move closer to neutral levels. Market gains are no longer as tightly concentrated as they were at the peak of the AI surge.
He also pointed to a supportive economic backdrop and easier year-over-year comparisons for companies that previously struggled. Over time, he believes the benefits of artificial intelligence will extend beyond large technology firms and begin to show up in earnings across a wider range of sectors. If that plays out, dividend stocks could find themselves on firmer ground.
Given this, we will take a look at some of the best dividend aristocrat stocks to invest in.
Our Methodology:
For this list, we scanned the list of the Dividend Aristocrats, the stocks that have raised their payouts for 25 years or more. From this group, we identified 10 stocks with the lowest price-to-earnings (P/E) ratios. The chosen stocks featured in the list exhibit a forward P/E ratio below 20 as of February 12. The stocks are ranked in ascending order of their P/E ratios.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
13. Pentair plc (NYSE:PNR)
Forward P/E Ratio: 18.87
On February 5, Barclays analyst Julian Mitchell cut his price recommendation on Pentair plc (NYSE:PNR) to $102 from $115 after reviewing the company’s latest earnings. He kept an Equal Weight rating on the stock. In his view, shares could have a hard time gaining momentum as long as pool margins are “treading water.”
During the fourth-quarter 2025 earnings call, Pentair’s CEO John Stauch reflected on the company’s direction as it enters its 60th year. He described a focused strategy built around customers, innovation, tight execution, and sustainability. Management believes that the foundation puts the company in a good position to post solid growth in 2026 and beyond.
Stauch also outlined several leadership changes. Nick Brazis has been named the incoming CFO. At the same time, De’Mon Wiggins and Adrian Chiu are stepping into new roles as part of a broader effort to realign the organization. One of the more meaningful changes is set for the first quarter of 2026. The company plans to combine its Flow residential business with the residential segment in Water Solutions. Stauch said the move is designed to create regional sales and G&A efficiencies while also positioning the business for both organic expansion and potential acquisitions.
On performance, the fourth quarter showed steady progress. Sales rose 5%, marking the 15th consecutive quarter of margin expansion. Adjusted operating profit increased 9%. Return on sales improved by 90 basis points to 24.7%, and adjusted EPS climbed 9% to $1.18. For the full year, Pentair posted record results across several key measures, including annual sales, adjusted operating income, return on sales, and adjusted EPS.
Pentair plc (NYSE:PNR) provides a broad portfolio of smart, sustainable water solutions serving residential, commercial, and industrial customers worldwide. The company operates through three segments: Flow, Water Solutions, and Pool.
12. Genuine Parts Company (NYSE:GPC)
Forward P/E Ratio: 17.95
On February 12, Truist raised its price recommendation on Genuine Parts Company (NYSE:GPC) to $162 from $146 and kept a Buy rating in place. The firm sees a supportive setup heading into Q4. In its view, the automotive segment should get a lift from same-SKU inflation, while the industrial business appears to be gaining traction after showing improvement in Q3.
On February 11, Evercore ISI analyst Greg Melich also nudged his price target higher, lifting it to $155 from $150 and maintaining an Outperform rating. The upward revisions reflect growing confidence that the company’s momentum is holding.
In Q3, the company posted $6.3 billion in sales, up about 5% from a year ago. Comparable sales improved sequentially in both the U.S. Automotive and Motion businesses, suggesting demand trends are stabilizing rather than deteriorating. Profitability also moved in the right direction. Gross margin expanded by 60 basis points year over year, supported by disciplined pricing, better sourcing, and the contribution from acquisitions. Adjusted EBITDA climbed 10%, with margin improvement in both the Automotive and Industrial segments. Adjusted diluted EPS reached $1.98, up 5% from the prior-year period.
Management acknowledged that the broader market remains somewhat soft, particularly in Europe. Even so, the company is pushing to capture additional share, working closely with existing customers while bringing in new ones. At the same time, it continues to manage through tariffs, trade uncertainty, and lingering inflation pressures without losing focus on margins. Growth has also come from expansion. This year alone, the company has acquired more than 85 locations across the US from independent operators and competitors. It has also agreed to acquire Benson Auto Parts, which operates roughly 85 stores in Ontario and Quebec.
Genuine Parts Company (NYSE:GPC) is a global distributor of automotive and industrial replacement parts. Its operations are split between two main segments: Automotive Parts and Industrial Parts.
11. Archer-Daniels-Midland Company (NYSE:ADM)
Forward P/E Ratio: 16.89
On February 4, BMO Capital’s Andrew Strelzik lifted his price recommendation on Archer-Daniels-Midland Company (NYSE:ADM) to $63 from $57 following the company’s fourth-quarter results. He kept a Market Perform rating on the shares. The higher target reflects updated assumptions tied to RVO, or biofuel blending quota, implications. Even so, the firm is staying cautious, pointing out that while the broader fundamentals look supportive, that strength has yet to consistently show up in EPS.
During the fourth-quarter 2025 earnings call, ADM’s Chairman, CEO, and President, Juan Luciano, said the company posted adjusted EPS of $0.87 for the quarter and $3.43 for the full year. Total segment operating profit came in at $821 million for the quarter and $3.2 billion for the year.
Luciano emphasized working capital discipline as a major factor behind performance. Lower inventory levels helped unlock a $1.5 billion cash flow benefit. He also highlighted record crush volumes in South America, steady ethanol performance, and better execution in the Nutrition segment. Across the business, he said, the company continued to focus on driving efficiency improvements in its global operations.
Portfolio simplification remained a priority. Luciano noted that the company completed more than 20 projects aimed at streamlining the business, generating about $200 million in cost savings. ADM also formed a joint venture with Alltech and brought Decatur East back online. On the operational side, safety metrics improved, with the company reporting the lowest injury rate in its history.
Archer-Daniels-Midland Company (NYSE:ADM) operates as a global agricultural supply chain manager and processor, linking crops and raw materials to food, feed, and fuel markets worldwide. It also has a significant presence in human and animal nutrition.
10. Hormel Foods Corporation (NYSE:HRL)
Forward P/E Ratio: 16.75
On February 11, Stephens trimmed its price recommendation on Hormel Foods Corporation (NYSE:HRL) to $25 from $27. It maintained an Equal Weight rating on the stock. The firm pointed to near-term pressure in Q1, mainly tied to the timing gap between pricing moves and changes in input costs. While management expects earnings to improve meaningfully this year, margins remain under strain. Gross profit margin came in at 15.7%, reflecting that pressure. Even so, three analysts have recently raised their earnings estimates for the upcoming period.
Stephens said Hormel is guiding for earnings to improve as 2026 unfolds. USDA data suggests higher hog slaughter levels and heavier weights in the spring and summer months, trends that could ease some input cost pressure and support profitability. The firm also flagged the risk tied to highly pathogenic avian influenza and its potential impact on Hormel’s turkey operations. Tighter supply could lift pricing. That benefit, though, may be tempered by the company’s cost-plus contracts, which limit how much margin expansion it can capture.
Despite the current challenges, Hormel’s scale remains a key advantage. Its products are staples in supermarkets and convenience stores, giving it steady volume. In the third quarter, net sales exceeded $3 billion. GAAP net income was close to $184 million. Both figures increased year over year, although profit fell short of Wall Street expectations.
Hormel Foods Corporation (NYSE:HRL) operates as a global branded food company, developing and distributing products across retail, foodservice, and international markets.
9. Medtronic plc (NYSE:MDT)
Forward P/E Ratio: 16.67
On February 9, Needham & Company upgraded Medtronic plc (NYSE:MDT) to Buy from Hold. It set a $121 price target on the stock. The firm said the company is still in the early phase of several major product rollouts aimed at multi-billion dollar markets. According to the analyst, these launches should help accelerate revenue growth. Needham believes the new products could contribute more than 1% to Medtronic’s overall organic revenue growth. The firm also expects that Elliott Management’s involvement and the addition of new board members will strengthen execution, organic growth, and profitability.
On February 3, Reuters reported that Medtronic plans to acquire privately held CathWorks in a deal valued at up to $585 million, as part of an effort to expand its heart devices portfolio. The acquisition would add CathWorks’ FFRangio System, a non-invasive diagnostic platform that helps physicians evaluate coronary artery disease more effectively. Heart devices generate nearly 40% of Medtronic’s revenue, including pacemakers and its Pulsed Field Ablation business, and the addition would further strengthen its position in data-driven cardiac care.
The transaction builds on a partnership formed in 2022 and remains subject to US regulatory approval. Medtronic expects the deal to close by the end of fiscal 2026.
Medtronic plc (NYSE:MDT) is based in Ireland and provides healthcare technology solutions.
8. Stanley Black & Decker, Inc. (NYSE:SWK)
Forward P/E Ratio: 15.06
On February 6, Goldman Sachs analyst Joe Ritchie raised his price recommendation on Stanley Black & Decker, Inc. (NYSE:SWK) to $84 from $78. The analyst reiterated a Neutral rating on the stock. In a research note, he said the company’s Q4 beat was driven largely by stronger margins in the Tools & Outdoor segment. Even in a difficult market, the company is focusing on what it can control. That includes pricing, tariff mitigation, cost actions, and working-capital discipline to protect margins and cash flow.
A few days earlier, on February 4, the company projected 2026 profit below Wall Street estimates. Tariff-driven price increases have started to weigh on demand for its power tools. Tariffs introduced under US President Donald Trump, along with inflation, have added pressure for companies already dealing with high raw material costs.
Management said efforts to offset tariffs, including higher pricing, led to weaker sales in North America and other developed markets within the Tools & Outdoor segment. Over the past year, the company rolled out several cost-saving measures. It adjusted its supply chain to soften the tariff impact. The cost reduction program delivered about $120 million in savings in the fourth quarter alone.
Net sales in the Tools & Outdoor segment, which includes power tools and lawn and garden equipment, fell 2% to about $3.16 billion. Adjusted earnings for the quarter declined to $1.41 per share from $1.49 a year earlier. Total fourth-quarter net sales edged down to $3.68 billion from $3.72 billion. Looking ahead, the company expects 2026 adjusted EPS between $4.90 and $5.70. The midpoint sits below analysts’ estimates of $5.66 per share, according to data compiled by LSEG.
Stanley Black & Decker, Inc. (NYSE:SWK) operates globally. It supplies hand tools, power tools, outdoor products, related accessories, and engineered fastening solutions through its Tools & Outdoor and Engineered Fastening segments.
7. Brown & Brown, Inc. (NYSE:BRO)
Forward P/E Ratio: 14.24
On February 12, Brown & Brown, Inc. (NYSE:BRO) announced the launch of a $250 million accelerated share repurchase program with Bank of America, N.A. The move falls under the company’s broader $1.5 billion share buyback authorization that the board approved on October 22, 2025.
A day earlier, on February 11, the company released its 2026 Market Trends report. The publication takes a close look at shifts developing across the insurance landscape. This year’s findings suggest that rate conditions are starting to tilt more in favor of buyers who come prepared for renewals and maintain a solid claims record. At the same time, the report points out that certain industries and coverage lines are likely to see firm pricing and stricter terms continue.
This is the first Market Trends report issued since Brown & Brown completed its 2025 acquisition of Risk Strategies. The latest edition combines insights from specialists across both organizations, offering a broader and more detailed view of the forces shaping commercial insurance, employee benefits, and personal lines.
According to the report, capital and underwriting capacity are improving in parts of the market, but pressures remain. Commercial lines are still dealing with large losses and exposure in high-risk industries. In employee benefits, employers are leaning on digital tools to manage costs while trying to attract and retain talent. Personal insurance, particularly in catastrophe-prone regions, continues to face tighter conditions. Brown & Brown emphasized its scale and global reach as key advantages in helping clients navigate these challenges.
Brown & Brown, Inc. (NYSE:BRO) provides insurance brokerage and risk management services, with a focus on property, casualty, and employee benefits solutions.
6. Becton, Dickinson and Company (NYSE:BDX)
Forward P/E Ratio: 14.03
On February 11, Citi analyst Joanne Wuensch lifted her price recommendation on Becton, Dickinson and Company (NYSE:BDX) to $198 from $185.70 and maintained a Buy rating. The adjustment came after the firm updated its financial model to account for the sale of the Life Sciences business.
During the company’s fiscal Q1 2026 earnings call, CEO Thomas Polen introduced Shawn Bevec as the new Senior Vice President of Investor Relations. He said the year had begun on solid footing, with results coming in ahead of expectations. In his view, performance reflected disciplined execution, stronger commercial momentum, and continued investment in the company’s key growth platforms.
Revenue for the quarter reached $5.3 billion. That translated into 0.4% overall growth and 2.5% growth within the New BD segment. Polen noted that several areas delivered double-digit growth, including biologic drug delivery, PureWick, advanced tissue regeneration, and pharmacy automation. Advanced Patient Monitoring posted high single-digit growth. Adjusted gross margin rose to 53.4%, while adjusted EPS came in at $2.91, both above internal forecasts.
He also said the company expected to close the combination of its Life Sciences unit with Waters Corporation through a Reverse Morris Trust transaction later that morning. The deal is set to generate a $4 billion cash distribution. Of that amount, $2 billion is planned for share repurchases, with the remaining $2 billion directed toward debt reduction. Polen described the move as aligned with BD’s more focused capital allocation strategy.
On the strategic front, he pointed to the “Excellence Unleashed” agenda, which aims to sharpen competitiveness, speed up innovation, and ensure consistent execution. Early signs of progress were already visible. The company expanded its sales force and captured new competitive wins. Alaris, for example, delivered its strongest quarter of competitive gains since its relaunch, increasing category share by roughly 100 basis points.
Becton, Dickinson and Company (NYSE:BDX) operates as a global medical technology company, developing and selling medical supplies, devices, laboratory equipment, and diagnostic products used by hospitals, physicians, life sciences researchers, and clinical laboratories worldwide.
5. Essex Property Trust, Inc. (NYSE:ESS)
Forward P/E Ratio: 13.99
On February 5, Stifel trimmed its price recommendation on Essex Property Trust, Inc. (NYSE:ESS) to $278 from $290.75. It reiterated a Hold rating on the stock. The adjustment followed updates to the firm’s estimates after reviewing the company’s fourth-quarter results.
Essex reported its Q4 2025 numbers the same day. During the earnings call, President and CEO Angela Kleiman said full-year same-store revenue growth landed at the top end of the company’s guidance range. FFO per share also came in above the midpoint of expectations. She attributed the results to tight coordination between on-site property teams and corporate operations. Other income showed solid growth, and delinquency recovery rates improved to levels close to where they stood before the pandemic.
Northern California stood out. Kleiman said the region performed better than anticipated, helped by ongoing expansion in the technology sector, steady migration trends, and limited housing supply. Rent growth across most of Essex’s markets outpaced the national average. Occupancy rose 20 basis points from the prior quarter to 96.3%, while concessions averaged about one week. Los Angeles posted the largest occupancy gain, climbing 70 basis points sequentially.
On the capital allocation front, Kleiman noted that non-portfolio institutional multifamily transactions totaled $12.6 billion in 2025, a 43% increase from 2024. She added that Essex has been the largest investor in Northern California over the past two years.
Essex Property Trust, Inc. (NYSE:ESS) is a self-managed REIT focused on acquiring, developing, redeveloping, and operating apartment communities in select West Coast markets.
4. Amcor plc (NYSE:AMCR)
Forward P/E Ratio: 12.42
On February 4, Bank of America lifted its price recommendation on Amcor plc (NYSE:AMCR) to $56 from $48.40. The firm also reiterated its Buy rating on the stock. After going through the fiscal Q2 numbers, analysts slightly trimmed their EPS estimates, now modeling $4.00 for FY26 and $4.30 for FY27, down modestly from prior forecasts of $4.06 and $4.34.
On Amcor’s earnings call for fiscal Q2 2026, CEO Peter Konieczny spoke about the impact of the Berry acquisition in practical terms. He suggested the deal has meaningfully changed the company’s scale and positioning, turning it into a stronger global player in consumer packaging and dispensing solutions. In his view, the integration is not just about size but about building a more competitive platform.
Quarterly results were largely in line with what management had outlined a few months ago. Nothing dramatic, but steady execution. Leadership indicated the company is still moving toward its full-year targets without needing to reset expectations. Adjusted EPS rose 7% in the quarter and 14% for the first half of the fiscal year. The lift came mainly from cost synergies tied to the acquisition, which helped cushion softer volumes. Synergy realization tracked at the high end of guidance, delivering $55 million in Q2 and $93 million for the first six months.
The company reaffirmed its fiscal 2026 outlook, guiding to adjusted EPS between $4 and $4.15 per share after factoring in the 1-for-5 reverse stock split. Management also expressed confidence in delivering double-digit EPS growth this year and doubling free cash flow compared with fiscal 2025. Meanwhile, the portfolio review continues. Amcor is evaluating options for roughly $2.5 billion in non-core assets, including its North American beverage business. Leadership described the process as active and ongoing, signaling that further changes could come if they strengthen the overall business.
Amcor plc (NYSE:AMCR) operates in flexible and rigid packaging, serving consumer and healthcare customers. The company focuses heavily on sustainable materials and design, positioning itself where product protection, efficiency, and environmental considerations intersect.
3. Chubb Limited (NYSE:CB)
Forward P/E Ratio: 12.08
On February 10, BMO Capital’s Michael Zaremski revisited his outlook on Chubb Limited (NYSE:CB) following the company’s Q4 results, raising his price recommendation to $326 from $286. The analyst reiterated a Market Perform rating on the stock. While broader consensus expects margin expansion to level off from here, Zaremski suggested there may still be room for incremental EPS upside. In his view, reserve releases and stronger investment income could provide an added boost, even if core margin gains begin to slow.
During Chubb’s fourth-quarter earnings call, Chairman and CEO Evan Greenberg described the period as a strong finish to what he called a record year. He framed the results as proof of the company’s diversified business model, noting that performance strength was not isolated to one or two units. Most operating segments, he said, contributed meaningfully.
Core operating income reached nearly $3 billion, or $7.52 per share. That marked gains of roughly 22% and 25% from the prior year. Greenberg also pointed to a combined ratio of 81.2%, the lowest in the company’s history, reflecting disciplined underwriting and solid profitability. Growth in the fourth quarter outpaced the company’s average pace for the year. The agriculture segment stood out in particular. Chubb remains the largest crop insurer in the United States, and that business delivered strong momentum.
The investment portfolio also expanded. Invested assets climbed to $169 billion, up from $151 billion a year earlier, giving the company additional earnings power through investment income. For the full year, Chubb generated operating income of just under $10 billion, or $24.79 per share. That represented increases of about 9% and 11%, respectively.
Premium growth remained healthy. Property and casualty premiums rose more than 7.5% in the quarter. Consumer lines grew close to 12%, while commercial lines advanced more than 6%. International P&C operations posted nearly 11% growth, and the U.S. agriculture business surged more than 45%, standing out as one of the strongest contributors.
Chubb Limited (NYSE:CB), headquartered in Switzerland, operates as a global insurance and reinsurance provider. Through its subsidiaries, it offers commercial and consumer insurance products, along with risk management, loss control, engineering support, and complex claims services to clients worldwide.
2. FactSet Research Systems Inc. (NYSE:FDS)
Forward P/E Ratio: 11.12
On February 4, Wells Fargo FactSet Research Systems Inc. (NYSE:FDS) cut its price target to $215 from $265 and maintained an Underweight rating. The move came after broader weakness in the information services space. Stocks in the group sold off following Q4 results from Gartner and headlines about Anthropic expanding into legal workflows. Investors grew cautious about how AI could reshape parts of the industry. Wells Fargo, though, suggested the reaction may have been overdone. In its view, several of the stock declines do not fully reflect the strength of companies that own valuable proprietary data. The firm sees selective opportunities emerging, particularly among information services providers with defensible data assets.
A few days later, on February 10, FactSet announced a partnership with Kepler Cheuvreux. The agreement will bring Kepler Cheuvreux’s Aftermarket Research into the FactSet platform. The research will also be enhanced by FactSet’s own AI tools, expanding the depth and usability of the content for clients across EMEA.
Kepler Cheuvreux covers more than 1,000 European stocks across 34 sectors. Its team of over 110 equity analysts operates from 12 research offices located in major financial hubs across Europe and Dubai. The firm is known for having one of the largest research footprints in the region.
This addition strengthens FactSet’s existing Aftermarket Research offering, which already includes content from more than 1,800 brokers worldwide. Those contributors include firms such as J.P. Morgan, Barclays, UBS, Macquarie, RBC, Deutsche Bank, HSBC, and others.
FactSet Research Systems Inc. (NYSE:FDS) operates as a global financial data and analytics platform, serving both institutions and individual professionals. Its business centers on delivering integrated financial data, analytics, and technology solutions that help clients research, analyze, and act on market information more efficiently.
1. Franklin Resources, Inc. (NYSE:BEN)
Forward P/E Ratio: 10.47
On February 2, TD Cowen’s Bill Katz raised his price recommendation on Franklin Resources, Inc. (NYSE:BEN) to $36 from $30. The analyst kept a Hold rating in place. After reviewing the company’s Q4 results, the firm adjusted its model and said it had become incrementally more optimistic about the stock’s outlook.
A few days later, on February 11, Franklin Resources announced a new initiative with Binance. The two launched an institutional off-exchange collateral program designed to make participation in digital markets more secure and capital-efficient.
The program is now live. Eligible institutional clients can use tokenized money market fund shares, issued through Franklin Templeton’s Benji Technology Platform, as collateral when trading on Binance. The structure addresses a common concern for large traders. Traditionally, institutions have had to move assets onto an exchange to use them as collateral, which can introduce custody and counterparty risks. Under this setup, the tokenized money market fund shares remain held off-exchange in regulated custody. Their value is reflected within Binance’s trading system, but the underlying assets are not physically transferred onto the exchange.
That distinction allows institutions to continue earning yield on regulated, income-generating money market fund assets while also supporting their digital trading activity. At the same time, it reduces counterparty exposure and avoids trade-offs around custody, liquidity, and regulatory safeguards.
Franklin Resources, Inc. (NYSE:BEN), which operates globally under the Franklin Templeton name, is a global asset manager offering investment strategies across equities, fixed income, alternatives, and multi-asset portfolios. The firm serves clients in more than 150 countries and manages over $1.7 trillion in assets as of January 31, 2026, with operations spanning more than 35 countries.
While we acknowledge the potential of BEN to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than BEN and that has 100x upside potential, check out our report about this cheapest AI stock.
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