When it comes to investing in Dividend growth stocks Certain sectors have been more beneficial to investors than others. Historically, financial services, healthcare, and consumer protection have been among the most popular sectors for dividend investors. Everyone has had good returns and growth over the years.
Financial Services has achieved above average returns with dividend growth. This sector is nowhere near as popular with dividend growth investors as it used to be due to the 2008 financial crisis. Understandably, there is skepticism about these stocks and their management teams.
Healthcare, primarily pharmaceuticals, has also posted above average returns with dividend growth. The disadvantage of pharmaceuticals is that drugs ultimately become patent-free and companies have to constantly innovate and keep new products in the pipeline.
However, the most stable value for returns and growth over the years is the Consumer Defensive sector. This sector includes companies that manufacture and sell products such as soap, detergent, deodorant, toothpaste, etc. These are products that we need or want to buy regardless of what the economy is doing. They are relatively inexpensive, so consumers will continue to buy them without changing their lifestyle in an economic downturn.
This week I screened mine Dividend growth stocks Database of selected Consumer Defensive companies with a return of 3.0% or more that have increased their dividends for at least 10 consecutive years. The results are shown below:
Kellogg Company (K) is a leading manufacturer of ready-to-eat cereals and also sells snacks and ready-made meals such as cookies, crackers, potato chips, granola 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 16 consecutive years. Yield: 4.0%
Kimberly Clark Corp. (KMB) is a global consumer goods company that makes tissue, personal care and health brands including 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 48 consecutive years. Yield: 3.5%
The Coca Cola company (KO) is the world’s largest non-alcoholic beverage 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 58 consecutive years. Yield: 3.2%
Flowers Foods, Inc. (FLO) is one of the largest manufacturers and marketers of baked goods in the United States. The company has paid a cash dividend to shareholders every year since 2002 and has increased its dividend payments for 18 consecutive years. Yield: 3.5%
As with previous screens, the data presented above is in its raw form. Some of 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 table with more than 20 columns of information about the 150+ companies I track. The data is sortable and has built-in buttons and macros to make it easier to use. Companies included in the list are companies that have had dividend growth in the past. The D4L data The table is part of the D4L Premium Services and is updated every Saturday for subscribers.
Full disclosure: Long KMB, KO,
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