Young Aristocrats (February 2021)

From the desk of Steve Strazza @Sstrazza

Dividend aristocrats are easily some of the most desirable investments on Wall Street. These are the names that have increased dividends for at least 25 years, providing steadily increasing income to longer-term minded shareholders.

As you can imagine, the companies making up this prestigious list are some of the most recognizable brands in the world. Coca-Cola, Walmart, and Johnson & Johnson are just a few of the household names making the cut.

Here at All Star Charts, we like to stay ahead of the curve. That’s why we’re turning our attention to the future aristocrats. In an effort to seek out the next generation of the cream-of-the-crop dividend plays, we’re curating a list of stocks that have raised their payouts every year for 5-9 years.

Introducing the Young Aristocrats. We like to say these are “stocks that pay you to make money”. Imagine if years of consistent dividend growth and high momentum & relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.

By adding our technical analysis to the mix, the Young Aristocrat setups give you the opportunity to own the best of the market’s future blue-chip winners before they become must-own household names.

And maybe the best part? This list is not just designed for long-term investors. Traders of all time frames can use this list to help generate ideas even in the shorter-term. Remember, some of the most important filters we use for this list are momentum, relative strength, and proximity to new highs. So let’s keep it real, these stocks are going up across all time horizons.

With that said, let’s dive right in.

Here's our latest Young Aristocrats list. It's sorted by proximity to new 52-week highs, after our other filters are applied.

Let's kick things off with an update on Lakeland Financial $LKFN which is a name we were buying way back in November, and due to its strength, has remained near the top of our watchlist since.

As the stock was just emerging from a multi-year base within the context of a strong primary uptrend, here's what we had to say about it:

We want to be buyers of this breakout as long as price is above 50 with a primary target at 62 and secondary target at 82 over the next 1-3 and 6-12 months, respectively.

Here's what the chart looked like back then...

And here is where we find ourselves today...

Just like we said back in November, we want to continue to ride this one higher toward our secondary target of 82 as long as we're above our prior objective of 62. We'd expect this trade to play out over the next 2-4 months.

Now, let's check out some fresh setups.