Every year, the DrIP Investing Resource puts together a list of so-called "Dividend Champions," comprised of about 100 companies that have consistently increased their dividend payouts for over 25 years straight. When you consider all the ups and downs the market has seen this past quarter century, it's an especially impressive feat, attesting to the strength of the firms that made the cut.

But that kind of track record is bound to attract analysts' attention -- and that's not necessarily the best thing for you as an investor. Because if brokers already have a stock on their radar, the good news around it may already be priced in.

But don't write off the Dividend Champs just because analysts got wind of them first. In fact, you can use their earnings estimates to your own advantage. As an alternative to buying up the stocks they're going gaga over, take a look at the ones the experts may be underestimating.

Analysts use forecasting models, fundamentals, and other research to try to anticipate a company's future earnings. The consensus estimate, an aggregate of their predictions for the current quarter, current year, and following year, can give you a sense of the general analyst sentiment around a stock.

Analyst methodology is certainly thorough enough, but projecting earnings is nevertheless an inexact science. Want proof? Just consider how many companies wind up turning initial estimates on their heads.

"Earnings surprises" put in unexpected performances, that either outdo or lag behind consensus estimates -- and some of them continue to do so year after year. So it may be worth having a look at the ones that keep confounding the experts, doing better than anyone anticipated.

To find the underdogs, we started from a universe of the DrIP Dividend Champions, then screened for the companies that have consistently outperformed Wall Street analyst estimates over the past year. To access the complete breakdown of earnings surprises, click here.

Here are the seven most underestimated dividend champions. Use this list as a starting point for your own analysis. Earnings surprise data sourced from AOL Money.


Dividend Yield

Earnings Performance

Carlisle Companies (NYSE: CSL)


Beat analyst quarterly earnings estimates by an average of 56.64% over the last year

Parker Hannifin (NYSE: PH)


Beat analyst quarterly earnings estimates by an average of 55.18% over the last year

Stepan Company (NYSE: SCL)


Beat analyst quarterly earnings estimates by an average of 48.98% over the last year

Northwest Natural Gas Company (NYSE: NWN)


Beat analyst quarterly earnings estimates by an average of 46.67% over the last year

Sherwin-Williams (NYSE: SHW)


Beat analyst quarterly earnings estimates by an average of 43.31% over the last year

The Chubb Corporation (NYSE: CB)


Beat analyst quarterly earnings estimates by an average of 39.88% over the last year

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.

Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.

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