An investment strategy based on Dividend Growth Stocks focuses on companies that produce predictable results and thus are able to consistently raise their dividends. Demand for household and personal care products is generally stable and not affected by changes in the economy or other factors. If you lose your job, you probably won’t stop bathing, washing your clothes, brushing your teeth or stop buying toilet paper. That's why companies in the Consumer Defensive sector are sought after as desirable dividend growth investments.
For many of these companies, raw material costs is a primary driver of profitability, and the larger more established companies are in a better position to negotiate better terms. Growth comes from a growing population and expanding into emerging markets where the people are starting to earn a wage they can not only life on, but begin to buy things we consider necessities.
The Consumer Defensive sector has been a steady performer over the years for both yield and growth. Given the relatively low price of most consumer goods, people often prefer to pay a few pennies more for a name brand that they are confident with. Investments in the Consumer Defensive sector brings yield stability and potential dividend growth to an income portfolio.
This week week, I screened my dividend growth stocks database for Consumer Defensive companies with a yield above 3.00% and that have increased their dividends for at least 8 consecutive years. The results are presented below:
General Mills, Inc. (GIS) is a major producer of packaged consumer food products, including Big G cereals and Betty Crocker desserts/baking mixes. The company has paid a cash dividend to shareholders every year since 1898 and has increased its dividend payments for 8 consecutive years. Yield: 3.2%
PepsiCo, Inc. (PEP) is a major international producer of branded beverage and snack food products. The company has paid a cash dividend to shareholders every year since 1952 and has increased its dividend payments for 40 consecutive years. Yield: 3.1%
The Procter & Gamble Company (PG) is a leading consumer products company the markets household and personal care products in more than 180 countries. The company has paid a cash dividend to shareholders every year since 1891 and has increased its dividend payments for 55 consecutive years. Yield: 3.5%
The Clorox Company (CLX) is a diversified producer of household cleaning, grocery and specialty food products is also a leading producer of natural personal care products.The company has paid a cash dividend to shareholders every year since 1968 and has increased its dividend payments for 36 consecutive years. Yield: 3.6%
Kimberly Clark Corp. (KMB) is a leading consumer products company's global tissue, personal care and health care brands include Huggies, Pull-Ups, Kotex, Depend, Kleenex and Scott. The company has paid a cash dividend to shareholders every year since 1935 and has increased its dividend payments for 16 consecutive years. Yield: 3.8%
The H.J. Heinz Company (HNZ) produces a wide variety of food products worldwide, primarily condiments, convenience meals and snacks. The company has paid a cash dividend to shareholders every year since 1911 and has increased its dividend payments for 8 consecutive years. Yield: 3.6%
Sysco Corporation (SYY) is a large distributor of food and related products, primarily to the foodservice or food-away-from-home industry. The company has paid a cash dividend to shareholders every year since 1970 and has increased its dividend payments for 41 consecutive years. Yield: 3.9%
As with past screens, the data presented above is in its raw form. Some of the the companies would be disqualified for poor dividend fundamentals. However some of the others may be worth additional due diligence.
My database, D4L-Data, is an Open Office spreadsheet containing more than 20 columns of information on the 210+ companies that I track. The data is sortable and has built-in buttons and macros to make it easy to use. Companies included in the list are those that have had a history of dividend growth. The D4L-Data spreadsheet is a part of D4L-Premium Services and is updated each Saturday for subscribers.
Related Books
Dividends Still Don't Lie: The Truth About Investing in Blue Chip Stocks and Winning in the Stock Market
The Dividend Growth Investment Strategy: How to Keep Your Retirement Income Doubling Every Five Years
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