Financial Services has provided above average yields with dividend growth. This sector is not nearly as popular with dividend growth investors as it once was due to the 2008 financial meltdown. Understandably, there is an air of skepticism with these stocks and their management teams.
Healthcare, primarily pharmaceuticals, also has provided above average yields with dividend growth. The downside to pharmaceuticals is that drugs eventually go off patent so the companies must constantly innovate and keep new products in the pipeline.
However, the most steady performer over the years for both yield and growth is the Consumer Defensive sector. This sector includes companies that make and sell products such as soap, detergent, deodorant, toothpaste, etc. These are products that we need, or are willing to purchase, no matter what the economy is doing. They are relatively inexpensive, so in an economic downturn consumers continue to purchase them with no lifestyle changes.
This week, I screened my dividend growth stocks database for Consumer Defensive companies with a yield at or above 3.0% and that have increased their dividends for at least 10 consecutive years. The results are presented below:
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 13 consecutive years. Yield: 3.2%
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 45 consecutive years. Yield: 3.2%
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 55 consecutive years. Yield: 3.2%
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 14 consecutive years. Yield: 3.5%
Flowers Foods, Inc. (FLO) is one of the largest producers and marketers of bakery products in the United States. The company has paid a cash dividend to shareholders every year since 2002 and has increased its dividend payments for 15 consecutive years. Yield: 3.7%
Target Corp. (TGT) operates nearly 1,800 Target, SuperTarget and CityTarget general merchandise stores across the U.S. The company has paid a cash dividend to shareholders every year since 1965 and has increased its dividend payments for 50 consecutive years. Yield 4.2%
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 200+ 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.
Full Disclosure: Long KMB, KO in my Dividend Growth Stocks Portfolio. See a list of all my Dividend Growth Portfolio holdings here.
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(Photo Credit: Kellogg Company)
Tags: K, KMB, KO, GIS, FLO, TGT,
