Pumpkin spice lattes in 90-degree heat? Only in early September 2020! 

A stock market rising to record highs in the middle of a recession with double-digit unemployment? Only in early September 2020!

This month, the weather's probably going to start cooling off, and the market might do the same. That makes it the perfect time to invest in reliable dividend-paying stocks, which can put money in your pocket even when the market's heading downward. With that in mind, we asked three Motley Fool contributors what Dividend Aristocrats look like good buys this month. They came back with Nucor (NYSE:NUE)PPG Industries (NYSE:PPG), and Air Products and Chemicals (NYSE:APD). Here's why these picks might be right for you.

A young woman holds a fan of $100 bills.

Image source: Getty Images.

Making lots of steel...and cash

John Bromels (Nucor): Steelmaker Nucor isn't just a Dividend Aristocrat -- a company that's increased its dividend every year for at least the past 25 years. With a 47-year history of annual dividend increases, it's well on its way to becoming a Dividend King -- a company that's raised its dividend each year for 50 years or more!

As the largest steelmaker in the U.S., Nucor's shares plummeted during the market crash in March and stayed low as the coronavirus crisis began to unfold. Steel is a cyclical industry even in normal times, and with millions of Americans out of work and the economy contracting, Wall Street figured that demand for big-ticket items made out of steel -- like cars, appliances, and construction supplies and equipment -- would take a major hit.

However, Nucor's second-quarter 2020 performance stunned the market, as per-share earnings of $0.36 came in more than double the top end of management's guidance. Don't get me wrong: Revenue and net income were still down on both a sequential and year-over-year basis, but the drop wasn't as bad as expected. Meanwhile, Nucor managed to churn out record quarterly operating cash flow. 

Nucor's ability to generate plenty of cash, even during a recession, should allow it to continue its long streak of dividend increases. And with a current yield of 3.5%, now looks like a great time to buy in. 

Unexciting except for the payout

Lee Samaha (PPG Industries): Paint and coatings is not the most exciting of industries, but that doesn't mean you can't find great dividend stocks in the sector. In fact, PPG and rival Sherwin-Williams are both Dividend Aristocrats with a strong track record of generating good returns for investors.

One of the reasons for this is that stocks in the industry tend to generate strong return on equity (net income divided by shareholders equity), meaning they are good at generating profit from its net assets (asses minus debt). 

PPG Return on Equity (10y Median) Chart

Data by YCharts

That's fair enough, but a company will still need revenue to generate profits from, and unfortunately, the COVID-19 pandemic is set to cause a near 12% decline in sales at PPG. That's hardly surprising considering its exposure to some hard-hit markets in 2020. For example, 30% of sales tends to go to automotive (original equipment and aftermarket), 19% to the general industrial sector, and 15% to aerospace, packaging, and marine.

No matter. The economy won't stay in a COVID-19-induced funk forever. Automotive production will improve as factories open up, and cars will get back on the road. Meanwhile, the industrial economy looks set to recover, according to widely followed data from the Institute for Supply Management. In addition, the strong growth in housing starts should support PPG's construction sales (around 36% of sales).

US ISM Manufacturing PMI Chart

Data by YCharts

As such, analysts have PPG getting back to 2019 earnings in 2021. (You can consider 2020 to be a kind of "lost year.") If PPG can hit these expectations, then the stock will trade around 19 times 2021 earnings, meaning it would trade at a discount to its valuation in recent years. Throw in a 1.8% dividend yield, and PPG looks capable of generating a double-digit total return for investors.

PPG PE Ratio (Forward 1y) Chart

Data by YCharts

Catch big air with an industrial gas powerhouse

Scott Levine (Air Products and Chemicals): With a track record of dividend increases that spans 38 years, Air Products is a Dividend Aristocrat -- and hydrogen-focused company -- that investors hungry for yield would be wise to consider.

While there's no guarantee of how the company will approach dividend raises in the future, a look at the company's past treatment of the payout suggests that the company is committed to rewarding shareholders. Since 2000, Air Products has increased its dividend at a compound annual growth rate of more than 10%.

For more current demonstrations of the company's enthusiasm for increases, investors can turn to the company's January announcement that it was boosting the quarterly dividend $0.18 per share to $1.34 from $1.16, signifying the largest increase in the company's nearly 80-year history. And on the company's third-quarter 2020 conference call, Seifi Ghasemi, Air Products' president and CEO, stated that, "A top priority is the ongoing growth of our dividend also. We are committed to increasing our dividend as we go forward."

Although a company's steadfast dedication to raising its dividend may excite prospective investors, they would be remiss to not investigate the company's financial health -- an exercise that provides insight into the company's ability to sustainably distribute cash to shareholders. In the case of Air Products, its solid balance sheet suggests there's no reason to believe that the company will need to forsake the returning of capital to shareholders in favor of servicing its debt anytime soon.

At the end of the third quarter, Air Products reported net debt of $1.8 billion and a net debt-to-earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio of 0.5, illustrating management's conservative approach to leverage. And turning from the balance sheet to the company's payout ratio, investors will find greater reassurance. Over the past 10 years, the company has averaged a payout ratio of 53.6%.

For investors who are in the market for a Dividend Aristocrat as well as a company poised to prosper from the global transition to hydrogen-based power solutions, Air Products is a worthy addition for portfolios in September.