5 Dividend-Paying Consumer Staples Stocks to Buy

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Five dividend-paying consumer staples stocks to buy now feature companies that produce and sell products that are essential for daily use, such as food, beverages, household goods, personal hygiene products and others that are prioritized above discretionary purchases.

Even in the current challenging economic times amid the COVID-19 crisis, consumer staples stocks tend to retain their value better than many other equities. For investors seeking limited downside if the market dives but also looking for appreciation when the market rises, consumer staples stocks are good to own in a diversified portfolio.

As a mother who heads her own household, Hilary Kramer, host of the national radio program, Millionaire Maker,” and head of the Value Authority advisory service, recommended that investors who are interested in a “portfolio pivot” due to COVID-19 should consider buying shares in companies that offer must-have consumer staples.

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5 Dividend-Paying Consumer Staples Stocks to Buy Offer Essentials

“We have more clarity on what people will be eating, what cleaning supplies they’ll use and where they’ll buy it,” said Kramer, who also offers the GameChangers advisory service aimed at choosing the market’s next wave of breakout winners. “Those businesses are going to be a lot more resilient than the discretionary categories where households strapped for cash will need to tighten the budget.”

Paul Dykewicz interviews money manager Hilary Kramer, whose premium advisory services include 2-Day Trader, Turbo Trader, High Octane Trader and Inner Circle.

As far as the 5 dividend-paying consumer staples stocks to buy, Kramer said she loves Minneapolis, Minnesota-based food products company General Mills (NYSE:GIS) as a proxy on what she calls the Cheerios economy, featuring back-to-basics meals people eat when they can’t leave the house and don’t want to pay for delivery. The stock has risen 28% from its recent low and pays a 3.3% yield that is worth locking in for income seekers, she added.

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General Mills features some of America’s best-known brands, not only including Cheerios, but also Häagen-Dazs, Yoplait, Pillsbury and Betty Crocker, while offering no economically cyclical risk. Aside from producing relatively consistent low-unit growth for the last few years, General Mills can benefit from the growing trend of consumers shopping from home to avoid venturing to a store and risking exposure to the coronavirus.

5 Dividend-Paying Consumer Staples Stocks to Buy Include General Mills

The company can be expected to raise its dividend at least 2%-3% per year, Kramer continued. General Mills also has added health food products in recent years through Nature Valley granola bars and Cascadian Farm organic frozen vegetables and cereals to achieve heightened growth potential.

Another plus is that General Mills has only failed to hike its annual dividend four times in the past two decades. In fact, General Mills has raised its annual distribution nearly three-fold since 2000 and averages annual dividend growth of 5.2%.

Chart courtesy of www.StockCharts.com

Analysts lifted the stock’s price target to $61 from $57 at RBC Capital Markets, to $59 from $58 at Piper Sandler and to $58 from $54 at Stifel Nicolaus on March 20. COVID-19 caused volatility for the company’s share price but did not stop it from climbing, as the preceding chart shows, even though the number of U.S. COVID-19 cases and deaths has been soaring.  

Ingredion Ranks as One of 5 Dividend-Paying Consumer Staples Stocks to Buy

A second stock Kramer said she likes is Ingredion (NYSE:INGR), a Chicago-area global provider of ingredients to customers in more than 120 countries that produced 2019 sales of $6 billion. The company uses grains, fruits, vegetables and other plant-based materials as ingredients for food, beverages, animal nutrition, brewing and other products.

With 11,000 employees, Ingredion is bigger than many investors may realize. Plus, it pays a dividend that currently produces a yield of 3.1%.

Fourth-quarter 2019 marked the second straight reporting period in which the company’s sales grew by taking pricing actions across its business to more than offset “significant foreign currency challenges,” said Jim Zallie, president and CEO, in a statement when the company reported earnings on Feb. 11. One highlight is that the company boosted its global specialties portfolio, led by double-digit-percentage growth in Latin America. 

“Global volumes were flat, however, due to the continued challenging macroeconomic environment in Asia-Pacific and Europe,” Zallie said. 

Chart courtesy of www.StockCharts.com

Kellogg Becomes One of 5 Dividend-Paying Consumer Staples Stocks to Buy

Kellogg Company (NYSE:K), of Battle Creek, Michigan, offers a 3.48 percent yield and reported “decent” first-quarter results on April 30, despite COVID-19, Kramer said. Aided by brands such Pringles, Cheez-It, Special K, Eggo, Kashi and MorningStar Farms, Kellogg officials said global demand for its products grew “significantly” in March, as consumers stocked up on packaged foods amid government-imposed stay-at-home mandates. 

Kellogg affirmed its full-year guidance but forecast that sales and earnings would shift toward the first half of the year. The company’s “Deploy for Growth” strategy is improving the underlying performance of the business and its financial condition remains solid, its officials said.

“We are truly living and working in a time unlike any other, and our hearts and thoughts go out to families around the world that have been affected by the global COVID-19 pandemic,” said Steve Cahillane, Kellogg’s chairman and chief executive officer. 

The company’s sales dipped 3.1% to $3.4 billion during the first quarter of 2020, compared to the same quarter last year, due to the July 2019 divestiture of its cookies, fruit snacks, pie crusts and ice cream cones business units that pulled down net sales by more than 9%. However, its operating profit soared 20.7% to $459 million and diluted earnings per share (EPS) jumped 23.2% to $1.01, Kellogg reported. 

Chart courtesy of www.StockCharts.com

Procter & Gamble Joins the 5 Dividend-Paying Consumer Staples Stocks to Buy 

Cincinnati, Ohio-based consumer products company Procter & Gamble (NYSE:PG), with a 2.68% dividend yield, is one of two consumer staples stocks recommended by Jim Woods, who leads the Successful Investing, Intelligence Report and Bullseye Stock Trader advisory services. To help determine when to buy and sell stocks, Woods relies on proven indicators to guide him with his Successful Investing recommendations.   

The Domestic and International Plans he tracks remain in “sell” status through May 1, as they have since Feb. 27. The wisdom of that market-timing approach is shown by using the S&P 500 as a proxy for domestic stocks to prove that since the Feb. 27 sell signal, the strategy dodged a nearly 25% fall through the recent low of March 23.

Chart courtesy of www.StockCharts.com

As the preceding chart shows, the market’s volatility is not designed for investors who have weak stomachs for the ups and downs of the past couple of months. The market crashed in March but recovered substantially in April.

Procter & Gamble, founded in 1837, has paid a dividend during each of the past 129 years since its 1890 incorporation. The company also has a rising dividend policy and has boosted its payout for each of the past 63 years.

Chart courtesy of www.StockCharts.com

The company reported third-quarter fiscal year earnings on April 18 that beat analysts’ consensus estimates. Procter & Gamble features big-name brands that include Bounty, Charmin, Crest, Dawn, Downy, Febreze, Gain, Gillette, Head & Shoulders, Olay, Oral-B, Pampers, Pantene and Tide. 

Organic sales rose 6%, aided by strong demand in the United States and Europe, while partly offset by volume declines in Asia, where COVID-19 infections originated. Organic sales for the company jumped 10% in its fabric and home care operations but slipped in grooming, the company reported.

However, its management reaffirmed its core EPS growth would range between 8% and 11% for the full fiscal year. Management’s guidance also indicated its full fiscal year organic sales would rise 4-5%.

Walmart Picked as One of 5 Dividend-Paying Consumer Staples Stocks to Buy

Walmart Inc. (NYSE:WMT), of Bentonville, Arkansas, has increased its annual cash dividend every year since first declared a $0.05 per share payout in March 1974. Walmart, a giant retailer of groceries and household products, seized an opportunity amid the COVID-19 crisis to announce on April 30 that is it expanding its new Express Delivery service. Consumers can request delivery of items from its stores in less than two hours.

Walmart accelerated the development of the service in the wake of the coronavirus pandemic, offering Express Delivery as a pilot project in 100 stores since mid-April. The service will expand to nearly 1,000 stores in early May and will be available in nearly 2,000 total stores in the coming weeks. Express Delivery lets customers order from more than 160,000 items, including food and general merchandise.

“We know our customers’ lives have changed during this pandemic, and so has the way they shop,” said Janey Whiteside, Walmart’s chief customer officer. “We also know when we come out of this, customers will be busier than ever, and sometimes that will call for needing supplies in a hurry. COVID-19 has prompted us to launch Express Delivery even faster.”

Paul Dykewicz met with Jim Woods to discuss the latest investment opportunities near and far before COVID-19 social distancing measures took hold worldwide.

Walmart operates roughly 11,500 stores under 56 names in 27 countries, along with ecommerce websites. Its fiscal year 2020 revenue of $524 billion shows its retail presence is immense. The company also employs more than 2.2 million associates worldwide and has been adjusting its workplace practices in recent weeks to reduce the risk of COVID-19 infection for its employees and customers.

Chart courtesy of www.StockCharts.com

The five dividend-paying consumer staples stocks to buy now offer a chance for investors to gain exposure to companies that have shown they are able to withstand the current crisis and remain profitable. Investors seeking dividend payouts and share price appreciation have a handful of viable investment choices among this group from which to choose to navigate uncertain times.

Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street JournalInvestor’s Business DailyUSA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is the editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. Endorsements for the book come from Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Dick Vitale and others. Follow Paul on Twitter @PaulDykewicz.

 

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