Updated on February 18th, 2025 by Felix Martinez
The Dividend Aristocrats prove that boring isn’t always a bad thing when it comes to investing. They are a group of 69 companies in the S&P 500 Index that have had at least 25 consecutive years of dividend increases.
We are big fans of the Dividend Aristocrats and believe investors can generate superior returns from these high-quality dividend stocks.
For this reason, we created a full spreadsheet of all 69 Dividend Aristocrats–complete with important financial metrics that matter most to investors–which you can download by clicking the link below:
Disclaimer: Sure Dividend is not affiliated with S&P Global in any way. S&P Global owns and maintains The Dividend Aristocrats Index. The information in this article and downloadable spreadsheet is based on Sure Dividend’s own review, summary, and analysis of the S&P 500 Dividend Aristocrats ETF (NOBL) and other sources, and is meant to help individual investors better understand this ETF and the index upon which it is based. None of the information in this article or spreadsheet is official data from S&P Global. Consult S&P Global for official information.
We review all 69 Dividend Aristocrats on a yearly basis. The next stock in the series is industrial manufacturer Pentair plc (PNR).
Pentair does not have an exciting business model, so it will most likely not be featured as the next hot growth stock anytime soon. Instead, it is a slow-and-steady dividend stock that has created substantial shareholder wealth over the past several decades.
Pentair has increased its dividend for 50 years in a row. The company’s dividend is also very safe. Pentair is a high-quality business that provides investors with steady dividend growth.
Business Overview
Pentair is based in the U.K. but has large operations across Europe and in the U.S., among other international regions. The company was formed in 1966. In 1968, Pentair acquired Peavey Paper Mills, which gave it a top position in paper products. Paper fueled the company’s growth over the next decade, until management decided to diversify into other product categories.
The company recently spun off its Technical Solutions business and now operates as a pure-play water solutions company. The company generates just over $4.1 billion in revenue and focuses on improving the availability and quality of water.
After the 2018 spin-off of nVent Electric (NVT), Pentair is a pure-play water solutions company with three segments: Pool, Water Solutions, and Industrial and flow Technologies.
Pentair reported strong financial performance for 2024, with annual sales reaching $4.1 billion and fourth-quarter revenue of $973 million, reflecting a 1% decline from the previous year. Operating income for the quarter increased 17% to $195 million, with a return on sales (ROS) of 20.1%, while full-year operating income rose 9% to $804 million. Adjusted EPS for 2024 was $4.33, up from $3.75 in 2023. The company also generated $767 million in operating cash flow, with free cash flow increasing to $693 million, reinforcing its financial position.
Despite macroeconomic challenges, Pentair achieved record profitability across its business segments. Flow and Water Solutions sales declined, but both segments reported higher margins. Meanwhile, Pool sales grew 7% for the year, driven by a strong aftermarket. The company continued returning value to shareholders, increasing its dividend by 9% and repurchasing 1.6 million shares for $150 million. CEO John L. Stauch credited the company’s transformation initiatives and balanced water portfolio for driving resilience and growth.
Looking ahead, Pentair introduced 2025 EPS guidance of $4.37 to $4.52 on a GAAP basis and $4.65 to $4.80 on an adjusted basis, reflecting expected earnings growth. The company projects full-year sales to be flat to up 2%, with first-quarter revenue anticipated to decline by 3% to 4%. Stauch reaffirmed Pentair’s commitment to long-term profitability and operational excellence despite economic uncertainties, emphasizing continued investments in key growth areas.
Source: Investor Presentation
Growth Prospects
Between 2008 and 2017 (before the nVent spin-off), Pentair grew its earnings per share by 5.5% annually. Adjusted for the impact of the last financial crisis—an unusually harsh recession that caused Pentair’s earnings per share to decline by slightly more than 30% between 2008 and 2009—Pentair’s long-term earnings-per-share growth rate would have been even higher.
Pentair management believes that a long-term earnings-per-share growth rate of 10% is possible, but we are a bit more conservative. We think it is better to expect a 7% earnings-per-share growth rate from Pentair over the coming years.
The company has many outlets for future growth.
Source: Investor Presentation
The company should be able to achieve this growth through rising revenues, which will be possible thanks to organic growth and acquisitions, and through tailwinds from margin expansion and share repurchases, which will lead to further declines in Pentair’s share count.
Pentair will benefit from several structural tailwinds, such as the aging water infrastructure in the U.S. Pentair continues to see very strong organic growth on a consolidated basis as Aquatic Systems performs well. Acquisitions will also help boost the company’s growth.
Competitive Advantages & Recession Performance
One of the competitive factors that has fueled Pentair’s impressive growth is its lean cost structure. This is no accident; Pentair has employed a strategy called Pentair Integrated Management System, or PIMS, enabling its high profit margins.
PIMS enables leaner manufacturing processes and drives efficiency throughout the company’s supply chain and distribution. Even though the effort is years old at this point, it continues to permeate the company’s strategy today. The impact is a culture and mindset with a relentless focus on cutting costs from its model.
The PIMS is an organization-wide system. It affects talent management by providing employees with the proper incentives and allowing all employees to have individual responsibility down to the operator level.
Within the PIMS system, the ‘Lean Enterprise’ system helps to increase profit margins. It drives margin expansion by increasing productivity at manufacturing sites and helps identify acquisition targets with the highest cost savings opportunities.
Its competitive advantages and high margins allowed the company to remain profitable during the Great Recession during 2007-2009:
- 2007 earnings-per-share of $2.08
- 2008 earnings-per-share of $2.20 (5.8% increase)
- 2009 earnings-per-share of $1.47 (33% decline)
- 2010 earnings-per-share of $2.00 (36% increase)
As a global industrial manufacturer, Pentair is not immune from recessions. However, it quickly bounced back. Pentair’s earnings-per-share reached a new high in 2011. Given that Pentair is now a pure-play water treatment company, we expect the next recession will have a milder impact on the company’s earnings.
Pentair is now focused on services that can be considered needs and not wants, so we believe the company’s recession resistance has improved in recent years.
Valuation & Expected Returns
Based on the expected earnings-per-share of $4.73 for 2025, Pentair’s price-to-earnings ratio is 20.4. Our fair value estimate is a P/E of 17, below its 10-year average.
Given this, we see the stock as somewhat overvalued. A decline in the price-to-earnings ratio could negatively impact shareholder returns by -3.5% annually through 2030. Additionally, EPS growth (estimated at 7% per year) and the 1.0% dividend yield will contribute to total returns.
In total, we see annual returns of 4.5% accruing to Pentair shareholders, consisting of the 1.0% dividend yield, 7% earnings-per-share growth, and the -3.5% return from a contracting valuation multiple.
An expected return near 4.5% annually is satisfactory for a hold but not high enough to warrant a buy rating.
Final Thoughts
Pentair has a strong business model and competitive advantages. These qualities have fueled its steady dividend growth over the past four decades and we don’t see any reason to believe that won’t continue for many years to come.
However, given the elevated valuation multiple, Pentair shares are trading without a modest margin of safety, culminating in estimated total annualized returns of 4.5%. The company should be able to continue increasing its dividend each year. As a result, we rate shares of Pentair a hold right now.
Additionally, the following Sure Dividend databases contain the most reliable dividend growers in our investment universe:
- The Dividend Contenders List: 10-24 consecutive years of dividend increases.
- The Dividend Challengers List: 5-9 consecutive years of dividend increases.
- The Dividend Champions: Dividend stocks with 25+ years of dividend increases, including those that may not qualify as Dividend Aristocrats.
- The Dividend Achievers: dividend stocks with 10+ years of consecutive dividend increases.
- The Dividend Kings: considered to be the ultimate dividend growth stocks, the Dividend Kings list is comprised of stocks with 50+ years of consecutive dividend increases
If you’re looking for stocks with unique dividend characteristics, consider the following Sure Dividend databases:
- The Complete List of Monthly Dividend Stocks: stocks that pay dividends each month, for 12 payments over the year.
- The Blue Chip Stocks List: this database contains stocks that qualify as either Dividend Achievers, Dividend Aristocrats, or Dividend Kings.
The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them monthly: