Dividend-Paying Food Stocks to Purchase Despite COVID-19 Dilemma
By: Paul Dykewicz,
Dividend-paying food stocks to purchase despite the COVID-19 dilemma include well-known companies whose products remain in demand during destabilizing times.
The food stocks to buy amid the COVID-19 crisis have shown sustained demand during a time of job losses and economic weakness. Investors eyeing places to invest their money should be comforted by the resilience of these stocks and the added appeal of their dividend payments.
COVID-19 job cuts in which 15% of adults reported they had been laid off or lost their positions due to the crisis have not prevented those who have the financial means from donating to help their neighbors in need. A Pew Research Center survey reported in September that one in four adults have had trouble paying their bills since the coronavirus outbreak began, a third have dipped into savings or retirement accounts to pay expenses and about one in six have borrowed money from friends or family or obtained sustenance from a food bank.
Many Young Adults, Lower Earners and Racial Minorities Seek Food During the COVID-19 Dilemma
Among people who became unemployed during the COVID-19 emergency, one-third indicated they returned to the job they had before the outbreak, 15% took a different position and half remain out of work, according to the Pew Research Survey. Those most prone to job separations during the crisis were young adults aged 18 to 29, lower-income individuals, those without a college degree and racial minorities.
To pay bills, one third of the respondents said they turned to savings or retirement accounts, 17% borrowed money from friends or family, 17% received help from a food bank or charitable organization, 15% turned to government assistance such as Supplemental Nutrition Assistance Program (SNAP) benefits and 15% received unemployment aid.
Some food banks and pantries began recently in response to the sudden need to help people in their communities, while existing charities scrambled to keep up with a surge in demand.
At the Shrine of St. Jude Catholic Church near my house in Rockville, Maryland, Fr. Paul Lee, the pastor, discovered some members of the church needed food assistance that others in the congregation had started to provide quietly.
Catholic Parish in Maryland Starts Food Pantry During COVID-19 Dilemma
Fr. Lee responded by launching and seeking donations for for the St. Stephen’s Food Pantry as a new parish social outreach program and quickly learned the need was far greater than otherwise might have been expected in a Maryland suburb of Washington, D.C. The number of families that received assistance started with 121 on May 9 and grew to 400 by August.
As the highly restrictive business closings in Montgomery County, Maryland, began to be eased by the local government, some people regained employment and the number of those seeking assistance fell to about 300 in October. The food pantry’s all-volunteer staff includes about 30 teenagers from the parish who serve every Saturday.
Shrine of St. Jude Catholic Church in Rockville, Maryland, started food pantry
“We distribute to the needy on Saturday mornings from 9:00 to 11:00 a.m.,” said Mike Goss, who serves as the volunteer director of the St. Stephen’s Food Pantry. “Each person receives a 12-pound bag of non-perishable items — soup, canned vegetables or fruit, peanut butter, tuna, pasta and sauce or rice and beans, cereal, two loaves of bread and a 15-pound box of produce.”
A total of 40 adults volunteer for food preparation on Friday nights and distribution on Saturday mornings, Goss said. The parish teenagers who volunteer on Saturdays help carry bags and boxes to people in their cars, he added.
Volunteers at Shrine of St. Jude Church in Maryland, serve people who need food.
Brand-Name Dividend-Paying Food Stocks to Purchase During the COVID-19 Dilemma
“What’s interesting is the way food banks fit into the way America feeds people now,” said Hilary Kramer, host of a national radio program, “Millionaire Maker,” and leader of the GameChangers and Value Authority advisory services. “While community donations and volunteering still play a vital role, much of the actual food now comes straight from the supermarket, which donates unsold merchandise that would otherwise go to waste.”
Cincinnati, Ohio-based Kroger Co. (NYSE:KR) alone has donated 1 billion meals in the last three years, Kramer said. That total is enough to feed nearly 1 million people in that time frame and is only about one-third of the food the company ultimately will discard, she added.
“That’s simply a matter of overhead in the supermarket business, so even a tax break is better than nothing,” Kramer said.
Kroger’s website features this statement, “When it comes to hunger and waste, zero is the only acceptable answer.”
Paul Dykewicz interviews money manager Hilary Kramer before COVID-19.
Kroger Is Among Dividend-Paying Food Stocks to Buy During COVID-19 Dilemma
“As winter approaches and restaurants give up on outdoor seating, we’re looking for more families to cook at home,” Kramer said. “That’s a boost for the grocery chains that can package food for smaller gatherings: smaller turkeys, pre-packed meals that can support higher retail margins… even a little pricing power can translate into a lot of profit when you’re looking at the entire American shopping cart.”
Kroger has been a “real star” this year and can keep making its shareholders happy, Kramer said. In second-quarter 2020, ended Aug. 15, Kroger’s net earnings reached $819 million, or $1.04 per share, soaring from $297 million, or $0.37 per share, during the same quarter of 2019. Kroger’s share price dipped 6.90% during the past three months but gained 12.83% so far in 2020 and 33.40% in the last 12 months.
Chart courtesy of www.stockcharts.com
Kroger offers a dividend yield of 2.23% and it trades a 12.21 price-to-earnings (P/E) ratio. Its stock also has fallen in price recently, so investors may want to consider buying shares in Kroger if the upcoming Nov. 3 presidential election produces a clear winner.
“Meanwhile, I’m watching COVID-19 relief efforts especially closely, Kramer said. “The real disaster in terms of food insecurity revolves around unemployment as benefits expire and no follow-up stimulus checks have materialized to help hungry people survive.”
If the government steps up to support the food banks, Kramer said she personally wants to see money go to the restaurant, office and school kitchen suppliers, which are really hurting right now: SYSCO Corp. (NYSE:SYY), US Foods Holding Corp. (NASDAQ:USFD) and Performance Food Group Co. (NASDAQ:PFGC).These companies know how to distribute millions of meals and have excess capacity now.
“It would be nice to see that expertise put to good use,” Kramer said.
McDonald’s Ranks Among Dividend-Paying Food Stocks to Purchase Amid COVID-19
Jim Woods, who heads the Successful Investing and Intelligence Report investment newsletters, as well as the Bullseye Stock Trader advisory service, has two food stocks that he recommends. Both stocks are current picks in the Income Multipliers portfolio in his Intelligence Report investment newsletter.
The reversal of fortune in markets from the September lows through the first couple of weeks of October lifted the Income Multipliers portfolio into positive territory for the year, Woods wrote to his subscribers.
“Major winners” in the Income Multipliers’ portfolio so far this year are fast-food restaurant McDonald’s (NYSE:MCD), soaring 17.08%, and retail behemoth Walmart (NYSE:WMT), zooming 22.47%. McDonald’s offers a dividend yield of 3.29% dividend yield, trades at a P/E ratio of 25.85 and incurred a decline in global sales of 23.9% during second-quarter 2020, ended June 30, compared to the same quarter a year ago.
The company’s comparable sales in third-quarter 2020, ended Sept. 30, rose 4.6% in the United States, compared to Q3 of 2019. However, its international sales in third-quarter 2020 slid 4.4% versus the same quarter a year ago.
Chart courtesy of www.stockcharts.com
Walmart Recognized Among Dividend-Paying Food Stocks to Purchase During COVID-19
Walmart’s dividend yield is 1.54% and its P/E ratio is 25.58. The company reported second quarter fiscal year total revenue of $137.7 billion, up $7.4 billion, or 5.6%, compared to the same quarter a year ago.
It operates 11,500 stores worldwide spread across 27 countries and e-commerce sites. The company also is growing its online sales and recently announced plans to invest in the TikTok video-sharing application. Walmart’s stock price has risen 7.64% during the past three months, 18.12% so far this year and 20.16% for the past year.
Chart courtesy of www.stockcharts.com
Paul Dykewicz meets with dividend-stock guru Jim Woods before the COVID-19 crisis.
Coca-Cola Chosen as One of the Dividend-Paying Food Stocks to Purchase During COVID-19
Mark Skousen, PhD, editor of the Forecasts & Strategies investment newsletter, and head of the Home Run Trader, TNT Trader, Five Star Trader and Fast Money Alert advisory services, features Coca-Cola (NYSE:KO) among his five favorite undervalued, dividend-paying recommendations.
Coca-Cola offers a 3.29% dividend yield and trades at a P/E ratio of 25.85. The company is “turning around” under the leadership of CEO James Quincey, Skousen opined. Coke has largely sold off its company-owned bottling operations to franchisees, resulting in a capital-light business model with strong free-cash-flow generation. Its stock price gained 2.60% during the past three months, but fell 10.95% since the start of the year and 8.71% in the past year.
Chart courtesy of www.stockcharts.com
In addition, Coca-Cola announced plans to retire its “Tab” brand, along with a number of others. The consolidation of brands will allow Coca-Cola to focus on those that have the highest potential to boost its financial performance, company officials said.
The pandemic and its restrictions have hurt the company, which typically produces about half of its sales from restaurants, cafeterias, stadiums and other places and events outside the home that have endured curtailed operations during the COVID-19 crisis. However, Coke is poised to benefit from the end of the pandemic, given long-term positive trends in the beverage industry and its position as an industry leader.
Mark Skousen, PhD, a descendent of Benjamin Franklin, meets with Paul Dykewicz.
Catholic Charities in Arlington, Virginia, Requests ‘Immediate’ Food Donations
The strong demand for food was shown when a public request for “immediate” food donations recently came from Catholic Charities of the Diocese of Arlington’s St. Lucy Food Project, a food assistance program in the Virginia suburbs of Washington, D.C. Despite “tremendous support” from the community and parishes, food donations have dropped 45% while the ongoing need for food assistance remains at high levels since the onset of the coronavirus pandemic.
The St. Lucy Food Project provides food through three Catholic Charities pantries — Loaves and Fishes in Front Royal, Christ House in Alexandria and the Leesburg Regional Office in Leesburg — as well as 57 parish, interfaith, community and government pantries within the diocese’s 21 counties and seven cities.
“The number of families we are seeing who need food assistance increased rapidly during the pandemic, and we have not seen the need subside,” said Art Bennett, president and CEO, Catholic Charities of the Diocese of Arlington. “The economic toll the pandemic continues to take on our communities is significant. We thank those who have given so generously over the last seven months, and now we urge anyone able to donate food, or funds to purchase food, to do so in an effort to meet this pressing need.”
Food needs include non-perishables such as canned fruits and vegetables, boxed or bagged cereal, rice and pasta, pasta sauce, cooking oil, bread, non-refrigerated juice, peanut butter, and canned chicken and fish/tuna. Donations are accepted online.
Food Pantry Faces Soaring Demand During the COVID-19
Since March, the St. Lucy Food Project has distributed 935,464 pounds of food to more than 14,500 people through the 60 food pantries throughout the Diocese of Arlington. Catholic Charities has partnered with 47 parishes in the Diocese to host No Contact Friday Food Drop Offs or parish food drives during weekend Masses.
“The reality we are facing is that our warehouse is nearly empty,” said Vincent Cannava, program director of the St. Lucy Food Project. “Food is going out as fast as it is coming in.”
With the need for food not expected to decrease anytime soon, Cannava urged everyone who is able to help to do so. Demand for food assistance shows no signs of slowing, he added.
The worsening COVID-19 pandemic not only caused President Trump to become infected and led to his hospitalization Friday, Oct. 2, until Monday, Oct. 5, but has forced job cuts that spiked demand from the needy for food. COVID-19 has caused 9,029,959 cases and 229,511 deaths in the United States, along with 45,439,737 cases and 1,186,425 deaths worldwide, as of Oct. 30, according to Johns Hopkins University. America has faced the most cases and deaths of any country thus far.
The dividend-paying food stocks to purchase during the COVID-19 dilemma include two grocery retailers, an iconic beverage maker and a fast-food chain known for its value menu. For dividend investors seeking to profit from the unmet demand for food in the midst of the pandemic, these four stocks may be worthy of purhase as part of a diversified portolio.
Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is 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. The book is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others.