2 Cheap Dividend Aristocrats to Buy for 2025 [Video]

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These reliable dividend stocks look significantly undervalued today.

00:00 Introduction

00:39 Federal Realty Trust FRT

01:25 Medtronic MDT

Susan Dziubinski: Hi. I’m Susan Dziubinski with Morningstar. Dividend aristocrats are companies that have raised their dividends for at least 25 consecutive years. To support this type of annual dividend growth, these companies typically maintain competitive advantages and healthy balance sheets. And because of their reliable dividend growth, the stocks of these companies often trade at or above what they’re actually worth. That’s because investors are often willing to pay a premium for dependable dividend growth.

But today, we’re looking at two Dividend Aristocrats whose stocks are trading well below what Morningstar thinks they’re worth. We think these dividend aristocrats look attractive heading into the new year.

Our first cheap dividend aristocrat to buy for 2025 is Federal Realty Trust FRT. This REIT owns and operates shopping centers and mixed-use assets in the largest metropolitan areas. Its portfolio features very high-quality assets that are strategically located in some of the best submarkets featuring high population density and high household incomes. As a result, Federal Realty has been able to drive strong same-store net operating income growth over the past two decades. Its portfolio should continue to attract shoppers and tenants and produce solid internal growth even in a challenging retail environment. We think shares of Federal Realty are worth $142.

The second cheap dividend aristocrat to buy is Medtronic MDT. The shares of one of the world’s largest medical-device companies look pretty significantly undervalued, on questions about whether the company can boost earnings growth. But Morningstar thinks Medtronic is now beginning to reap the rewards of innovation that has reached commercialization, and we expect adoption of its new therapies to support mid-single-digit growth through the midterm. We think Medtronic stock is worth $112 per share.

For more dividend stock ideas, be sure to subscribe to Morningstar’s channel and visit Morningstar.com.

Morningstar senior analysts Kevin Brown and Debbie Wang provided the research behind this segment.

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Read what our team is writing.

Susan Dziubinski https://www.morningstar.com/people/susan-dziubinski

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