3 Dividend Aristocrats to Buy Before Year’s End

Dividend Aristocrats are attractive investments due to their reliable cash flow, consistent dividend payments, and annual dividend distribution increases. There is no better time to buy these stocks than when they are down, as the value-to-yield combinations improve, and their stock prices are likely to recover over time.

Among the qualities of Dividend Aristocrats is the ability to weather market downturns and come out the other side stronger and better-positioned than before. Today, we'll examine three such stocks and why they are good buys in the fourth quarter.

Archer-Daniels Midland: Reversal in Process for 3.25% Yielding Stock

Archer-Daniels Midland (NYSE: ADM) is a good Dividend Aristocrat to buy before year’s end because its stock price has confirmed its bottom and a reversal is in play. The bottom is due to the normalization of business trends following the pandemic and the return to top-line growth, which is expected to be reported for Q3. Analysts forecast approximately 5% growth, which may underestimate the business's strength. The critical detail will be the margin, which is expected to contract due to macroeconomic headwinds and cost pressures. 

Archer-Daniels Midland’s dividend is attractive at early October price levels. The stock yields about 3.25%, at the high end of its range, while trading at only 15x its earnings. The long-term forecast for earnings growth isn’t robust, but it is at least stable, suggesting that the dividend distribution is likewise stable. The risk is that distribution will slow from the high-single-digit pace reported in 2025, but the payout ratio is low, so growth is not expected to cease. 

Analysts and institutional trends align with ADM’s market bottom. The analysts' trends reveal a shift in sentiment that began in August, which includes new coverage, upgrades, and price target increases, while institutional trends remain bullish. The institutional group, which owns nearly 80% of the stock, has been buying on balance all year. 

Cintas: Price Consolidation Approaches an End

Cintas' (NASDAQ: CTAS) price action entered a consolidation phase in late 2024, which is approaching its end. The consolidation is due to the stock price run-up and split, which resulted in shareholders receiving four shares for each one they previously held. The story in 2025 is that the company continues to grow, outperforming expectations, and cash flow is improving, which keeps the capital return safe. Cintas' capital return includes both the dividend and share repurchases. The dividend is worth approximately 1%, while buybacks reduce the share count incrementally every quarter. 

The analysts' response to the Q2 results was tepid, with several price target reductions, but the group remains otherwise bullish on this market, as do the institutions. The price target reductions align with the consensus or higher levels, forecasting a 12% upside for this Hold-rated stock. Regarding the institutional group, it owns more than 60% of the stock and has been buying it in 2025 at a pace of more than $2 for every $1 sold.

PepsiCo Puts PEP in Portfolio Yield

PepsiCo’s (NASDAQ: PEP) stock price has struggled with sluggish business growth, cost pressures, and recall issues that undermined profitability, but those days are behind it. While macroeconomic headwinds persist, the company is well-positioned to accelerate its growth and improve profitability, and there is potential for economic tailwinds to emerge in 2026. The FOMC is on track to reduce interest rates, which will lower costs and free up capital for both businesses and consumers. 

PepsiCo’s yield is the highest on this list, just over 4% as of early October, and is expected to grow at a mid-single-digit CAGR in the upcoming years. PepsiCo also buys back shares, reducing its share count quarterly, thereby providing shareholders with leverage over time. Institutions are taking advantage of the value/yield combination of this consumer staple stock, buying PepsiCo stock at a pace of more than $2 to $1 sold in 2025. 

Companies Mentioned in This Article: