By Ian Salisbury

Investors who favor the market's most reliable dividend payers have had to show a lot of patience lately. In 2026, the bet is finally paying off -- with stalwarts like Caterpillar, Exxon Mobil, and Clorox posting 25%-plus returns.

It's been a tough stretch for so-called dividend aristocrats, stocks known for decades of consistent payouts. ProShares S&P 500 Dividend Aristocrats ETF, which includes 70 blue-chips that have raised their dividend in each of the past 25 years, has returned 9.3% a year on average over the past five years. The S&P 500 has returned 13.7% a year during that time.

With investors suddenly jittery over software and other tech stocks, the script has flipped. The Aristocrats ETF has surged 10% in just the first 10 weeks of the year, leaving the S&P 500 with its 1.5% gain in the dust.

It's no secret why. About 31% of the Dividend Aristocrats ETF is in hard-hat sectors like industrials and materials, which have both rallied by double digits this year. Another 24% is in consumer staples, which have also seen big gains.

The fund's top performer this year is Caterpillar, up more than 34% after reporting better-than-expected fourth-quarter earnings in January. The machinery giant, a Barron's stock pick from late 2024 , has faced a number of headwinds in recent years, including tariffs and elevated interest rates, which slowed business for its mining and construction customers.

Now rates are coming down, and Caterpillar has even turned into something of an AI bank shot. Its gas-powered generators have been attractive backup power sources for AI data centers. It may not be as sexy as developing new AI models, but it's precisely the kind of pick-and-shovel business likely to benefit even if AI software plays out in unpredictable ways. Sales in Caterpillar's Power and Energy unit surged 23% in the fourth quarter to more than $9 billion.

Caterpillar isn't cheap anymore. It now trades at 33 times forward earnings, up from just 17 times a year ago. Its dividend yield has fallen to 0.8% from 1.5%. But Wall Street forecast 20% profit growth in both 2026 and 2026, it may still have room to run.

Exxon Mobil, Chevron and Clorox are three more dividend aristocrats getting new attention. Exxon and Chevron have seen their shares languish in recent years, thanks to sinking oil prices, which are down about 10% in the past year. Clorox, whose brands include its namesake cleaner, as well as Hidden Valley, Pine-Sol, and more, has struggled as inflation-addled shoppers sought generic products.

Now all three are benefiting as investors flee tech stocks and seek safety among blue chips. Exxon Mobil is up 29%, Clorox 26%, and Chevron 22%, according to FactSet. Other dividend aristocrats posting double digit gains in 2025, include Stanley Black & Decker, Colgate-Palmolive, Archer-Daniels-Midland, Lowe's, Target, and PepsiCo.

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

February 12, 2026 13:02 ET (18:02 GMT)

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