#Morningstar #TopDividendStocks #dividendinvesting This month’s trio includes two dividend aristocrats. 00:00 Introduction 00:10 ExxonMobil XOM 01:14 Genuine Parts GPC 02:18 Pfizer PFE David Harrell: Hi, I’m David Harrell, editor of the Morningstar DividendInvestor newsletter. In this monthly series, we take a look at the dividend prospects of three stocks that are popular with income investors. ExxonMobil XOM, the country’s largest energy firm, currently yields 3.3%, with 2.3% annualized dividend growth over the past five years. While the current yield is well below the 4.8% average over the past five years, that average includes the spike seen in 2020, when Exxon’s yield shot up—very briefly—to double digits. Exxon opted to increase debt rather than reduce its dividend that year, when the pandemic was a major drag on revenue. Morningstar analysts note that “Dividend growth was initially weak after 2020 but has accelerated in the last two years as debt fell sharply and cash flow increased.” They expect “management to prioritize dividend growth, but investors should expect more cash to be returned through repurchases, particularly during high-oil-price environments, given the flexibility those afford.” They forecast that the current annual dividend of $3.96 per share will increase to $4.48 by 2028. The stock currently trades at around a 9% discount to its $135 Morningstar fair value estimate. Genuine Parts GPC is a seller of automotive and industrial parts with a truly impressive streak of annual dividend increases: Though it was less than the 5.6% annualized rate of raises over the past five years, the 3% dividend increase that Genuine Parts declared in February places the company in truly rare territory, as it was the 69th consecutive annual dividend increase. When discussing Genuine Parts in the past, I’ve noted that even such long streaks of dividend increases don’t necessarily result in high yields, as the stock has generally yielded between 2% and 3%, with a 2.7% average yield over the past five years. But this recent raise, coupled with a downward trend in Genuine’s share price since its peak in late 2022, has pushed the forward yield above that range to 3.5%. Morningstar analysts expect the annual dividend rate—now $4.12 per share—to increase to $5.08 by 2029. The stock currently trades at a 9% discount to its Morningstar fair value estimate of $130 per share. In assessing the capital allocation of the pharmaceutical giant Pfizer PFE, Morningstar analysts note that the company “has generally targeted close to a 50% payout in dividends as a percentage of normalized earnings,” which they think “seems about right for a more mature industry.” The stock currently yields close to 7%, with 3.1% annualized dividend growth over the past five years. The most recent raise of 2.4% was declared in December for the dividend paid in early March. Morningstar analysts expect Pfizer to maintain a payout ratio in the mid-50s, which would align future dividend growth with earnings growth. The stock is currently trading at large discount to its fair value estimate, placing it in 5-star territory. I’m David Harrell from Morningstar DividendInvestor. Thanks for watching and we’ll see you next month. What to watch from Morningstar. 3 Dividend Stocks for March 2025 https://www.youtube.com/watch?v=0xBNaRUhsWs Market Volatility: What to Watch in Q2 After Big Swings in Q1 https://www.youtube.com/watch?v=SQbvzyCwwwg&t=20s 3 Stocks to Buy with Your Tax Refund in 2025 https://www.youtube.com/watch?v=wZM2TDpohYc The 10 Undervalued Dividend Stocks for 2025 https://www.youtube.com/watch?v=4IZLpBwf1Qs Read what our team is writing. David Harrell: https://www.morningstar.com/people/david-harrell Follow us on social. Facebook: https://www.facebook.com/MorningstarInc/ X: https://x.com/MorningstarInc Instagram: https://www.instagram.com/morningstar... LinkedIn: https://www.linkedin.com/company/5161/