Jim Cramer says these are his 10 favorite 'dividend aristocrats' to own through year-end

CNBC’s Jim Cramer on Tuesday offered investors a list of his 10 favorite “dividend aristocrats” to own through year-end, saying their payouts offer protection against Federal Reserve-related market declines.

Amid the Fed’s tightening campaign this year, the S&P 500’s dividend aristocrats — companies that have consistently raised their payouts over the past 25 years — have held up better than the broader U.S. stock index, the “Mad Money” host noted.

And now, given renewed concerns about a hawkish Fed, Cramer said he believes it’s the right time to zoom in on his favorites in the group for the rest of the year — just like he did at the start of 2022.

1. Archer-Daniels-Midland: Cramer said he likes the agriculture firm as a play on supply chain disruptions. He also noted the stock has started to recover from its mid-July bottom, helped by a rebound in crop prices. “Conservative, decent stock,” he said.
2. General Dynamics: While Cramer said he’s positive on the overall defense industry, General Dynamics is the only dividend aristocrat in its ranks. “Unfortunately, they also have a business jet division that will no doubt get hit if we have a nasty recession, but that hasn’t stopped the stock from rallying 11% this year, aided by a very hands-on management that knows what’s needed in a less secure world,” he said.
3. Coca-Cola: Cramer said the beverage giant is a “textbook defensive stock,” and its roughly 2.8% dividend yield helps add protection. Shares of Coca-Cola have been basically flat over the past six months, but Cramer said Fed Chair Jerome Powell’s reminder that the central bank means business should boost the stock.
4. Hormel: The parent company of Spam and Skippy peanut butter is another classic defensive name, Cramer said. Plus, as inflation squeezes consumers, he said Hormel could represent “a good trade-down play.”
5. McDonald’s: Cramer said he thinks two recent overhangs on shares of the fast-food giant — cost inflation and the strong U.S. dollar — are past their peak. “I think McDonald’s can resume its long march higher real soon,” he said, calling it the perfect “bounce-back candidate.”
6. Chubb: Cramer said the insurance company is a beneficiary of higher interest rates, which is noteworthy now that the Fed reinforced its hawkish posture. “With the Fed bringing the pain, I think rates will head higher again, and that means Chubb is going to be along for the ride,” he said.
7. Federal Realty: The real estate investment trust yields around 4.2% and owns a large number of mixed-use suburban properties. Cramer said a key reason the REIT made this list is because he thinks those types of properties will be resilient in an economic slowdown.
8. Realty Income Corporation: “The stock’s been punished lately because most retail has been struggling,” Cramer said, but this firm has “tons of consistent clients” like drugstores, supermarkets, dollar stores and convenience stores. “Best of all, Realty Income pays you a monthly dividend” that yields 4.3% here, Cramer said.
9. Linde: Cramer noted his Charitable Trust owns shares of the industrial gas firm. While it’s a tough moment for cyclical companies, he said he believes Linde has a “great long-term story” and is worth buying on weakness.
10. Caterpillar: Shares of the industrial giant have bounced off their July lows, but remain well below their April highs. “CAT should get a huge boost from recent legislation, and with the stock down at 15 times earnings, I’m betting Wall Street’s gotten too negative on Caterpillar,” Cramer said.

Disclosure: Cramer’s Charitable Trust owns shares of Linde.