In this article, we will take a look at some of the best dividend aristocrat stocks to invest in.
Strategies built around steady dividend growth have tended to deliver better results over time than broader benchmarks.
A clear example is the S&P 500 Dividend Aristocrats Index, which tracks companies that have raised their dividends every year for at least 25 years. Research from ProShares shows that, since the index began, it has beaten the S&P 500 on a risk-adjusted basis. It captured about 90% of the market’s upside while absorbing only 83% of the downside, a balance that helped drive stronger long-term results.
That defensive profile has shown up most clearly during market stress. ProShares found that the Dividend Aristocrats outperformed the S&P 500 by more than 12% in 2022, a difficult year for equities. Looking further back, the index did better than the broader market in eight of the ten worst quarterly drawdowns since 2005.
The report also noted an important income advantage. Companies that steadily raise payouts tend to deliver a higher yield on cost over time than stocks that start with a high yield but lack consistent growth, even if the initial dividend is lower. Given this, we will take a look at some of the best dividend aristocrat stocks to invest in.
Our Methodology
For this article, we scanned the list of Dividend Aristocrat companies and identified the ones with the strongest upside potential as of December 22. From that list, we picked 14 stocks with the highest number of hedge fund investors, as per Insider Monkey’s database of Q3 2025, and ranked them accordingly.
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).
14. Federal Realty Investment Trust (NYSE:FRT)
Number of Hedge Fund Holders: 31
Upside Potential as of December 22: 9.2%
Federal Realty Investment Trust (NYSE:FRT) is among the best dividend aristocrat stocks to invest in.
On December 18, Stifel analyst Simon Yarmak raised the firm’s price target on Federal Realty Investment Trust (NYSE:FRT) to $109.50 from $104.50 and kept a Hold rating on the shares. The update followed Federal Realty’s announcement that it sold Pallas at Pike & Rose and Bristol Plaza for a combined $170 million. The firm said it adjusted estimates after the sale. The transaction capped a busy stretch for the company. Earlier this month, Federal Realty announced the acquisition of Village Pointe. That deal came on the heels of a July announcement confirming the completion of its purchase of Town Center Plaza and Town Center Crossing in Leawood, Kansas. The analyst pointed to this steady pace of activity in a research note to investors.
Federal Realty Investment Trust (NYSE:FRT) has long leaned toward quality over quantity. That approach shows up in the areas surrounding its properties. Population density tends to be higher, and household incomes also run above peer averages. In simple terms, retailers want to be there, and shoppers keep coming back. By the end of the third quarter of 2025, the company owned 103 properties. Those assets included about 3,600 tenants spread across 27.9 million commercial square feet, along with roughly 3,000 residential units.
Development and redevelopment remain central to the strategy. Many of the shopping centers it owns lead their local markets because the company consistently reinvests capital to keep them relevant. The portfolio is actively managed as well. Management is willing to sell when an asset has delivered most of what it can, and a strong offer appears. Proceeds from those sales are then redeployed into properties with room to grow. It is a cycle the company has repeated for decades, steadily compounding value along the way. That discipline has supported a long record of shareholder returns. Federal Realty Investment Trust (NYSE:FRT) has raised its payout for 58 consecutive years.
Federal Realty Investment Trust (NYSE:FRT) is widely viewed as a leader in owning, operating, and redeveloping high-quality retail-focused properties. Its portfolio is concentrated in major coastal markets and select underserved regions where economic and demographic trends remain supportive.
13. Hormel Foods Corporation (NYSE:HRL)
Number of Hedge Fund Holders: 32
Upside Potential as of December 22: 15.7%
Hormel Foods Corporation (NYSE:HRL) is among the best dividend aristocrat stocks to invest in.
On December 9, Barclays lowered its price target on Hormel Foods Corporation (NYSE:HRL) to $30 from $31 while keeping an Overweight rating. The move came as part of the firm’s 2026 outlook for the Americas agribusiness group. Barclays expects agriculture markets to deliver uneven results next year. The firm prefers seed over crude protein and holds a neutral to positive view on fertilizer. Among grain traders, biofuel policy is seen as the key swing factor. In protein markets, the outlook for 2026 looks much like 2025.
A separate development followed a few days later. On December 15, Hormel Foods Corporation (NYSE:HRL) and Forward Consumer Partners announced the completion of their previously disclosed transaction involving the JUSTIN’S brand. Forward Consumer Partners is a private investment firm focused on branded consumer products. Under the agreement, JUSTIN’S will operate as a standalone company. Ownership is split, with Forward holding 51% and Hormel retaining 49%.
The business includes well-known products such as nut butters and USDA-certified organic chocolate confections. The structure gives the brand room to grow while allowing Hormel to stay closely involved.
John Ghingo, president of Hormel Foods, made the following statement:
“We are excited about the opportunity ahead for the JUSTIN’S® brand. This new partnership provides the focus and resources to help the business grow and also reflects how Hormel Foods is thinking differently about unlocking growth for our brands.”
Hormel Foods Corporation (NYSE:HRL) operates as a global food company with a broad portfolio. Its products span pork and poultry, snacks, and ready-to-eat meals.
12. Atmos Energy Corporation (NYSE:ATO)
Number of Hedge Fund Holders: 32
Upside Potential as of December 22: 7.64%
Atmos Energy Corporation (NYSE:ATO) is among the best dividend aristocrat stocks to invest in.
On December 17, UBS raised its price target on Atmos Energy Corporation (NYSE:ATO) to $174 from $159 and kept a Neutral rating on the shares. The update reflected a more constructive view on valuation, even as broader sector risks remain in focus.
A day earlier, Morgan Stanley moved in the opposite direction. On December 16, the firm downgraded Atmos Energy to Equal Weight from Overweight and cut its price target to $172 from $182. The change came as part of Morgan Stanley’s 2026 outlook for the utilities group. The firm expects utility stock performance to be shaped by data center demand and growth opportunities in 2026, with “no slowing of activity or relief to grid tightness,” according to the research note. Morgan Stanley urged investors to steer clear of political and regulatory risk, particularly in an active election year.
Operationally, Atmos Energy Corporation (NYSE:ATO) continues to lean on a familiar playbook. In its Q4 2025 earnings update, the company said the year marked its 14th consecutive year of executing its strategy centered on safety and reliability. That strategy focuses on upgrading natural gas distribution, transmission, and storage systems. It is not flashy work, but it tends to pay off over time. Capital spending in FY25 totaled $3.6 billion. About 87% of that amount went toward safety and reliability investments.
Shareholders also saw a direct benefit. Atmos Energy Corporation (NYSE:ATO) announced a 15% increase in its quarterly dividend, extending its dividend growth streak to 41 consecutive years. For income-focused investors, that kind of consistency carries weight.
Atmos Energy Corporation (NYSE:ATO) is based in Texas and serves roughly 3.4 million natural gas customers across the southern United States.
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