Susan Ziubinski: Hello. I'm Susan Ziubinski from Morningstar. Dividend Aristocrats are companies that have increased their dividends for at least 25 consecutive years. To support this type of annual dividend growth, these companies typically maintain competitive advantages and healthy balance sheets. And because of their reliable dividend growth, these companies' stocks often trade above their actual value. That's because investors are often willing to pay a premium for guaranteed dividend growth.
But today, we're looking at two Dividend Aristocrats whose stock prices are trading well below what Morningstar thinks they should be worth. We think these Dividend Aristocrats look attractive heading into the new year.
2 Low Dividend Aristocrats to Buy in 2025
- Federal Real Estate FRT
- Medtronic MDT
The first low dividend aristocrat to buy in 2025 is Federal Realty Trust. This REIT owns and operates shopping centers and mixed-use assets in metropolitan areas. Its portfolio features very high quality assets strategically located in some of the best submarkets characterized by high population density and high household incomes. As a result, Federal Realty has been able to drive significant same-store net operating income growth over the past two decades. Its portfolio should continue to attract shoppers and tenants and generate solid organic growth even in a challenging retail environment. We think Federal Realty stock is worth $142.
The second low-dividend aristocrat to buy is Medtronic. The stock price of one of the world's largest medical device companies appears to be significantly undervalued, with questions about whether the company can boost earnings growth. However, Morningstar believes Medtronic is beginning to reap the benefits of the innovations it has brought to market, and expects the company's new treatments to support mid-single-digit growth through the medium term. We believe Medtronic stock is worth $112 per share.
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Morningstar senior analysts Kevin Brown and Debbie Wang provided the research behind this space.
For more information, see Susan Dziubinski's 3 Best Companies to Own in 2025 and Beyond.
The author owns no shares in any securities mentioned in this article.
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