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.
Consumer Goods Companies
Below are several leading Consumer Goods companies that I follow. The companies selected have a dividend yield in excess of 2.5% and have raised their dividends for at least 10 years: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 40 consecutive years. Yield: 2.8%
Kellogg Company (K) is a leading producer of ready-to-eat cereal also sells snack and convenience foods such as cookies, crackers, potato chips, cereal bars, fruit snacks and frozen waffles. The company has paid a cash dividend to shareholders every year since 1923 and has increased its dividend payments for 11 consecutive years. Yield: 3.0%
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 43 consecutive years. Yield: 3.1%
General Mills, Inc. (GIS)is a major producer of packaged consumer food products company that produces cereal, yogurt 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 12 consecutive years. Yield: 3.1%
Kimberly Clark Corp. (KMB) is a global consumer products company producing 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 43 consecutive years. Yield: 3.4%
The Coca-Cola Company (KO) is the world's largest soft drink company, and also has a sizable fruit juice business. The company has paid a cash dividend to shareholders every year since 1893 and has increased its dividend payments for 53 consecutive years. Yield: 3.4%
The Procter & Gamble Company (PG) is a leading consumer products company that 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 58 consecutive years. Yield: 3.9%
Conclusion
The Consumer Goods is the third largest sector in my database of dividend stocks. Of the 250 stocks that I track, it currently is represented by 30 stocks (15%). As noted above this is a very important sector for dividend growth investors. It it brings yield stability and potential growth to an income portfolio. Many income and value portfolios are over-weighted in Consumer Goods. Keep the soap and toilet paper coming!Full Disclosure: Long PEP, KMB, KO, PG, in my Dividend Growth Portfolio. See a list of all my dividend growth holdings here.
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