Dividend stocks outperformed the S&P in July. Wall Street says these names will go higher
Investors seeking shelter from the market volatility may want to consider dividend stocks. While stocks rallied on Monday, August is the third-worst month of the year, according to the Stock Trader’s Almanac. Its data shows the S & P 500 averages just a marginal gain for the month. The market has been rocky this summer as investors dealt with tensions in the Middle East and concerns over Federal Reserve policy. The S & P 500 ultimately ended the month of July down 0.1%. The Nasdaq lost 3.2%, but the Dow Jones Industrial Average gained 0.3%. Dividend stocks, in general, fared better in July. The ProShares S & P 500 Dividend Aristocrats ETF (NOBL) added nearly 8%, and the Vanguard Dividend Appreciation ETF (VIG) rose roughly 1%. NOBL has a dividend yield 2.42% and 0.35% expense ratio. VIG yields 1.54% and has a 0.04% expense ratio. NOBL .SPX line 2026-07-01 ProShares S & P 500 Dividend Aristocrats ETF vs. S & P 500 since July 1, 2026 Investors tend to turn to dividend-payers to help ride out the volatility. They can provide more predictable returns and tend to cushion the downside. “The case for dividends is as strong as it’s ever been, given the volatility in the markets, given the uncertainty about what the future looks like, and also given the importance of dividend growth as an offset to inflation that’s stickier and higher,” Michael Clarfeld, manager of ClearBridge Investments’ dividend strategy, told CNBC in June. Yet investors shouldn’t just look at the highest payers. Sometimes an elevated dividend can sometimes be a sign of distress at a company. Dividend Aristocrats may not have the loftiest yields, but they are high-quality companies that have a history of increasing their payouts in each of the past 25 years. With that in mind, CNBC Pro looked for Dividend Aristocrats that have further upside ahead. The stocks are in the NOBL ETF and have at least 15% upside to the average price target, according to FactSet. They are also well-liked by Wall Street, with at least 55% of the analysts covering the stock rating it a buy. Albemarle is one of the names that did not perform well in July. It lost 13% – but analysts believe it can rally 63%. Investors earn a 1.4% dividend yield while they wait for the stock to turn around. Some 58% of analysts covering the stock give it a buy rating, including Citi, which upgraded the stock in June. While lithium supply has weighed on stock prices, analyst Patrick Cunningham doesn’t see a meaningful glut materializing. “Even in a balanced market, we see ALB as one of the primary beneficiaries of structural lithium demand tailwinds given its high-quality assets, conversion network, and potential to allocate a steady capital program to high-return growth projects,” he wrote in a June 18 note. “We believe current valuation levels underappreciate ALB’s next leg of growth.” Albemarle is expected to report earnings on Wednesday. Air Products and Chemicals has the highest yield on the list at 2.5%. It has roughly 17% upside to the average price target, with 56% of the analysts covering the stock rating it a buy, per FactSet. APD YTD mountain Air Products and Chemicals year to date Last week, the industrial gases company posted an earnings beat for its fiscal third quarter but its revenue fell short. Air Products also raised its full-year earnings guidance and lowered its capital expenditures guidance. “Having taken additional decisions to further optimize our large project portfolio, we have a clear pathway to reduce capital expenditures and drive continued profitable growth through high-quality, traditional industrial gas projects,” CEO Eduardo Menezes said in the earnings release. Shares were up fractionally in July. Lastly, Walmart pays just a 0.9% dividend but has nearly 26% upside to the average price target, per FactSet. Some 67% of the analysts covering the stock rate it a buy. Shares lost about 2% in July. In May, the retailer issued a worse-than-expected outlook when it reaffirmed its full-year adjusted EPS guidance to $2.75 to $2.85 per share. Analysts polled by LSEG anticipated guidance of $2.91 per share. WMT YTD mountain Walmart year to date However, its Walmart+ membership hit a record high in July, according to Morgan Stanley’s latest survey of consumers. Walmart reports its latest financial results on Aug. 20. Bernstein, which rates the stock overweight, suggests buying shares if they pull back meaningfully on disappointing comparable sales. “Despite the potential near term comp deceleration, we still see WMT in a strong fundamental position with price leadership, enhanced assortment, and convenient delivery offerings,” analyst Zhihan Ma said in a note Friday. — CNBC’s Fred Imbert contributed reporting.
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