Avoid meddling with Dividend Aristocrats.
In the world of dividend investing, some of the most reliable names are the Dividend Aristocrats, companies that have increased their dividends for at least 25 consecutive years. However, in 2025, three such Aristocrats—Air Products and Chemicals, 3M, and Leggett & Platt—are facing potential dividend cuts due to operational and market challenges.
Weak Stock Performance and Rising Dividend Yields
The first half of 2025 has seen these firms struggle with weak stock performance, which has raised concerns about the safety and growth prospects of their dividends. The exact operational or sector-specific challenges are not detailed, but their share prices have declined, leading to higher dividend yields but also increased risk.
Alternative Dividend Stocks for 2025
For investors worried about potential dividend cuts in these Aristocrats, there are alternatives with strong fundamentals and dividend growth prospects. Clorox Co. (CLX), a Dividend Aristocrat with a 47-year dividend increase streak and dominant product market shares worldwide, is one such option. With expected 5-year annual returns of about 12.9%, Clorox is supported by its diversified consumer products revenue and strong operational performance.
Eversource Energy (ES), a newly added Dividend Aristocrat for 2025, is another attractive choice. With a diversified regulated utility business serving over 4 million customers, Eversource showed a strong 23.6% revenue increase in Q1 2025 and offers an expected 5-year return of 14.7%.
Financial Sector Leaders and Dividend Kings
The financial sector has also been a source of dividend growth in 2025. JPMorgan Chase, Citigroup, Wells Fargo, and Goldman Sachs have all raised their dividends significantly, reflecting strong capital management and promising dividend growth potential. For example, JPMorgan increased its dividend by 20% since the end of 2024.
Dividend Kings, stocks with even longer dividend growth streaks (50+ years), are considered highly reliable dividend payers and offer diversified sector exposure. They may be a safer option for income-focused investors.
Context and Outlook
The Dividend Aristocrats list for 2025 includes 66–69 companies, all with at least 25 consecutive years of dividend increases. Despite some individual pressures, this group overall remains a strong source of stable dividends, especially as monetary policy may ease later in 2025.
The financial sector’s recent increases in dividends signal potential for the second half of 2025 to set new records in payout growth, indicating that dividend growth acceleration might be broadening beyond traditional Dividend Aristocrats.
Caution and Due Diligence
While Air Products and Chemicals, 3M, and Leggett & Platt face dividend cut risks, it is essential for investors to exercise caution and due diligence when considering these stocks. The BOERSE ONLINE Global Dividend Stars Index, while useful for finding good dividend stocks, does not guarantee the stability of current situations or future dividend payments.
Investors are advised to stay away from Air Products and Chemicals and 3M due to potential operational issues and the risk of dividend cuts. Leggett & Platt, a furniture and bed manufacturer, is under pressure due to rising costs, inflation, and high interest rates, leading many to assume a potential dividend cut.
In conclusion, while some Dividend Aristocrats are facing challenges, other Aristocrats and sectors offer attractive dividend growth opportunities. Investors should consider safer alternatives like Clorox, Eversource Energy, or strong dividend-growing financial stocks. For maximum dividend stability, Dividend Kings may also be worthy of consideration.
- The fluctuating stock performance and rising dividend yields of Air Products and Chemicals, 3M, and Leggett & Platt have raised concerns about their dividend safety and growth prospects for some investors, despite these companies being Dividend Aristocrats.
- For individuals worried about potential dividend cuts in Aristocrats like Air Products and Chemicals, Clorox Co. and Eversource Energy, both Dividend Aristocrats with promising dividend growth prospects, could serve as attractive alternatives for their investment portfolios.
