Dividend Aristocrats can help keep your portfolio safe from inflation.
In fact, according to MarketWatch, companies that have raised their dividends the most over the last 10 years typically outperform the market. They also noted that these companies tend to raise their dividends at a higher rate than inflation.
Look at Cintas Corp. (CTAS), for example.
At the moment, CTAS carries a dividend yield of 0.90%. The company also just declared a quarterly cash dividend of $0.95 per share of common stock payable on June 15, 2022 to shareholders of record at the close of business on May 16, 2022. Cintas has a strong record of returning capital to its shareholders and has consistently raised its dividend each year since Cintas’ initial public offering 38 years ago in 1983.
Lowe’s Companies (LOW) – which carries a yield of 1.53% — has also outperformed markets. The company also declared a quarterly cash dividend of 80 cents ($0.80) per share, payable May 4, 2022 to shareholders of record as of April 20, 2022.
Another hot dividend-payer to consider is Toro Co. (TTC). With a yield of 1.38%, the company just declared a regular quarterly cash dividend of $0.30 per share. This dividend is payable on April 21, 2022, to shareholders of record at the close of business on April 6, 2022.
Or, if you’d rather go with an ETF that can help protect your portfolio, consider the Fidelity Stocks for Inflation ETF (FCPI). With an expense ratio of 0.29%, the ETF seeks to provide returns that correspond to the performance of the Fidelity Stocks for Inflation Factor Index.
Normally investing at least 80% of its assets in securities included in the Fidelity Stocks for Inflation Factor Index, which is designed to reflect the performance of stocks of large and mid-capitalization U.S. companies with attractive valuations, high quality profiles and positive momentum signals, emphasizing industries that tend to outperform in inflationary environments,” according to Fidelity.
At the moment, some of its top holdings include Apple, Microsoft, Nucor Corp., Marathon Oil Corp., APA Corp., Olin Corp., and Procter & Gamble to name a few. Not only do you get solid diversification with the ETF, you pay a fraction of what you’d pay for a single holding in the ETF.