Investing in dividend aristocrats has long been a favored strategy among income-focused investors, especially those seeking long-term value and financial stability. These elite stocks, part of the S&P 500 index, are known for consistently increasing their dividends for at least 25 consecutive years. But in 2025, what sets certain dividend aristocrats apart is not just their track record, but their current valuation, economic moat, and strategic positioning. Among these, there are a few surprises—companies that were once underwhelming but now present a compelling case for investment.
One such standout is Becton Dickinson, a healthcare firm known for manufacturing and distributing a wide range of medical and surgical products. Despite its reputation, BD has had a rough few years, including the widely publicized recall of its Alaris infusion pumps, which significantly tarnished its credibility in the med-tech world. However, the company is now undergoing a notable transformation. The recent decision to combine its life sciences division with Waters Corporation may appear ill-timed due to research spending constraints, but it makes strategic sense in the long run. The core business, especially after the acquisition of Edwards’ patient monitoring business, is better aligned for future growth. Trading at just 69% of Morningstar’s fair value estimate, BD is undervalued and shows potential for a strong rebound, supported by a 2.24% forward dividend yield and a narrow economic moat that offers some insulation from competitors.
Brown-Forman, best known for Jack Daniel’s, emerges as another strong candidate. With a wide economic moat supported by decades of brand equity and global recognition, Brown-Forman has capitalized on the premiumization trend in the whiskey and broader spirits market. The partnership with Coca-Cola to produce Jack and Coke in ready-to-drink formats has opened new distribution channels internationally. Despite the risks—ranging from regulatory scrutiny over alcohol consumption to global trade tensions—the stock is trading 26% below Morningstar’s fair value, making it an attractive entry point. With a 2.93% dividend yield, it appeals to both income investors and those betting on growth in the premium spirits segment. The family's long-term control ensures consistency in strategy and risk aversion, further protecting shareholder interests.
Clorox, a household name in cleaning and consumer products, offers a high forward dividend yield of 3.73% and boasts a wide moat, primarily due to strong brand recognition and entrenched retail presence. The company has shown resilience through the pandemic, supply chain disruptions, and even a major cybersecurity attack. Its commitment to e-commerce transformation, digital investment, and innovation positions it well against both branded and private-label competition. While recent promotional spending in segments like trash bags and wraps might raise eyebrows, it reflects a broader strategy of long-term brand investment rather than panic-induced price competition. Clorox aims to return to a gross margin of 44% by fiscal 2025, supported by targeted price hikes, cost-saving initiatives, and strategic innovation. With the stock trading at 74% of Morningstar’s estimated fair value, Clorox presents a compelling mix of income and recovery potential.
Energy giant ExxonMobil remains the only energy-sector stock on this list, a testament to its long-term viability despite the sector’s cyclicality. With a narrow moat and a forward yield of 3.59%, Exxon is focused on long-term strategic spending that diverges from industry trends. Its investments in Guyana and the Permian Basin aim to grow earnings significantly while maintaining capital discipline. Exxon’s plan includes scaling production from 4.3 million barrels of oil equivalent per day in 2024 to 5.4 million by 2030. What makes Exxon stand out is its ability to generate $20 billion in additional earnings by 2030 while maintaining flexibility through short-cycle assets like the Permian. The company also plans to invest $30 billion in lower-carbon businesses such as carbon capture and low-emissions fuels. With shares trading at 82% of fair value, Exxon provides both yield and a long-term growth narrative grounded in energy transition and operational efficiency.
Another healthcare stock, Medtronic, carries a forward dividend yield of 3.17% and enjoys a wide economic moat. Known for its diversified portfolio of medical devices, Medtronic’s valuation reflects investor skepticism about its recent execution. Yet the long-term picture remains positive. The company's diabetes and cardiac rhythm divisions continue to offer reliable cash flow, and strategic innovations could reignite investor interest. Trading at a discount to fair value, Medtronic is positioned to benefit from aging global populations and increasing demand for chronic disease management solutions.
West Pharmaceutical Services, though less known to casual investors, has a narrow economic moat and is trading well below its intrinsic value. With a dividend yield of 0.26%, it doesn’t top the list in terms of income generation, but its growth potential is impressive. The company provides critical packaging and delivery solutions for injectable drugs, a niche with high barriers to entry. As biologics and complex injectables become more common, West stands to benefit significantly. The stock’s current undervaluation stems largely from macroeconomic pressures, but its fundamentals remain strong.
Amcor is another surprising entry. Operating in the consumer packaging space, it has a forward yield of 5.27%—one of the highest on this list. With a narrow economic moat, Amcor benefits from scale, long-term client contracts, and a footprint in both developed and emerging markets. Its stock price, however, reflects investor wariness around packaging sustainability and global economic uncertainty. Still, with many consumer goods companies committing to sustainable packaging solutions, Amcor is well-positioned to benefit from long-term trends.
PepsiCo, a staple in the portfolios of income investors, offers a 3.14% dividend yield and a wide economic moat backed by an impressive portfolio of beverages and snacks. The company’s global reach, strong brand equity, and focus on health-conscious product innovation continue to drive its long-term narrative. Despite facing cost pressures and regulatory scrutiny, especially on sugar content, PepsiCo’s ability to adapt and lead in both the indulgence and health-conscious segments is notable. Trading at a moderate discount, PepsiCo is a dependable choice for investors seeking steady dividends and moderate capital appreciation.
Nordson, operating in the industrials sector, offers a 1.24% yield and enjoys a wide economic moat thanks to its proprietary dispensing technologies used across industries, from electronics to healthcare. While its yield may not excite income hunters, its consistent dividend growth and solid fundamentals make it a valuable addition for total return strategies. Its specialized niche ensures pricing power and recurring revenues, even in tougher economic climates. Trading below fair value, Nordson offers stability and a moat-protected business model with long-term relevance.
Kimberly-Clark, another consumer defensive play, rounds out the list with a 3.85% yield and a narrow moat. Famous for brands like Huggies and Kleenex, the company has been quietly restructuring operations to better align with shifting consumer behaviors and digital transformation. Its ongoing investment in e-commerce, supply chain efficiency, and product innovation suggests a firm that is not content to rest on its laurels. While recent raw material inflation has pressured margins, Kimberly-Clark’s pricing power and operational adjustments are likely to stabilize earnings. With shares trading at a discount to intrinsic value, this is a solid pick for income-focused investors seeking stability.
Each of these companies has earned its place on the list not just by increasing dividends for a quarter-century, but by maintaining a business model that adapts and evolves. Economic moats, undervaluation, and strategic agility set them apart in today’s investment landscape. Investors looking to avoid the fate of onetime dividend aristocrats like Walgreens Boots Alliance—who cut their dividend amid financial strain—would be wise to consider not just dividend history but also the economic strength and adaptability of the businesses themselves. In the current environment, where inflation, geopolitical tension, and shifting consumer habits challenge the status quo, these ten names offer a compelling combination of value, income, and resilience. And while none are entirely risk-free, the ones that are trading at notable discounts with solid fundamentals represent an opportunity that aligns both with caution and optimism—an unusual but welcome mix for any long-term portfolio.