By Ian Salisbury

Looking for stocks with a steady dividend that also offer the prospect of price gains? One place to go bargain hunting is among the so-called dividend aristocrats -- stocks with a record of paying and raising dividends for 25 consecutive years.

To make the job easier, investment researcher Morningstar recently published a list of 10 aristocrats with stock prices that are trading below its analysts ' estimates for fair market value. The list includes plenty of familiar names for investors, including Clorox, Exxon Mobil and PepsiCo.

When it comes to dividends, aristocrats offer investors a measure of reassurance. Companies that have steadily increased payments for decades will always be reluctant to cut them. In recent years, that has meant sacrificing total return, as traditional blue chips have been left behind by exploding values in the tech sector.

Over the past decade, the ProShares S&P 500 Dividend Aristocrats, an exchange-traded fund that follows the universe, has returned 9.6% a year, compared with 13.5% for the S&P 500.

Seeking out undervalued dividend payers is one way to potentially boost price returns.

Morningstar's stockpickers tend to favor companies with strong "moats" -- characteristics like a strong brand or economies of scale that give firms a sustainable competitive advantage. Still, bargain hunting always involves risk and Morningstar's list includes a number of companies whose stocks have taken a big hit in recent months.

Shares of medical products maker Becton Dickinson were already lagging when it announced in May that cuts to U.S. research funding had hurt its sales. The stock plunged 15% on the news. Still, Morningstar argues the company stands to benefit from a July agreement to combine its life science business with Waters.

Clorox, whose brands include Glad, Brita, and Hidden Valley, is another company that has struggled, missing Wall Street's profit target last quarter amid weak consumer spending. Still, Morningstar argues the company's strong stable of brands and willingness to invest in e-commerce should allow it to weather its problems.

Morningstar's 10 undervalued dividend stocks:

Becton Dickinson / ticker: BDX

Dividend yield: 2.2%

Forward P/E: 13

Ytd. total return: -19%

Current stock price: $181

Morningstar fair value estimate: $270

Brown-Forman / BF.B

Dividend yield: 2.9%

Forward P/E: 17

Ytd. total return: -23%

Stock price: $29

Morningstar fair value estimate: $42

Clorox / CLX

Dividend yield: 3.7%

Forward P/E: 20

Ytd. total return: -21%

Stock price: $126

Morningstar fair value estimate: $177

Exxon Mobil / XOM

Dividend yield: 3.6%

Forward P/E: 15

Ytd. total return: 6%

Stock price: $112

Morningstar fair value estimate: $135

Medtronic / MDT

Dividend yield: 3.1%

Forward P/E: 16

Ytd. total return: 16%

Stock price: $91

Morningstar fair value estimate: $112

West Pharmaceutical Services / WST

Dividend yield: 0.3%

Forward P/E: 34

Ytd. total return: -25%

Stock price: $244

Morningstar fair value estimate: $310

Amcor / AMCR

Dividend yield: 5.2%

Forward P/E: 11

Ytd. total return: 3.2%

Stock price: $9.41

Morningstar fair value estimate: $11

PepsiCo / PEP

Dividend yield: 4%

Forward P/E: 17

Ytd. total return: -5%

Stock price: $139

Morningstar fair value estimate: $162

Nordson / NDSN

Dividend yield: 1.4%

Forward P/E: 20

Ytd. total return: 5.3%

Current stock price: $217

Morningstar fair value estimate: $249

Kimberly-Clark / KMB

Dividend yield: 4%

Forward P/E: 17

Ytd. total return: -3%

Current stock price: $125

Morningstar fair value estimate: $140

Source: Morningstar and FactSet

Write to Ian Salisbury at ian.salisbury@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

July 31, 2025 14:29 ET (18:29 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.