Dividends Value » HNZ

Building Yield: 15 Consumer Goods Dividend Stocks *

D4L — Wed, 02 Feb 2011 07:30:08 +0000

Over the next several weeks I plan to look at different sectors that have traditionally been very friendly to dividend investors. Each of these sectors have attributes that make the companies in them potentially desirable to long-term buy-and-hold dividend growth investors. Understanding these attributes will hopefully help us to select the very best companies for our income portfolios. First up the Consumer Goods Sector…

Consumer Goods Attributes

Demand for household and personal care products is generally stable and not affected by changes in the economy or other factors. There are certain things people will continue to purchase no matter how bad the economy gets. If you lose your job, you probably won’t stop bathing, washing your clothes, brushing your teeth or stop buying toilet paper. Given the relatively low price of most consumer goods, consumers often prefer to pay a few pennies more for a name brand that they are confident with.

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 2.25% and have raised their dividends for at least 5 years (all but one are in excess of 10 years).

McCormick & Company (MKC) | Yield: 2.3% | Growth: 8.3% | Years: 24
McCormick & Company Inc. manufactures, markets and distributes flavor products and other specialty food products to the entire food industry.

J.M. Smucker Company (SJM) | Yield: 2.6% | Growth: 7.6% | Years: 12
J.M. Smucker Co.’s products include coffee, fruit spreads, peanut butter, shortening and oils, ice cream toppings, health and natural foods, and beverages. The Folgers coffee business was acquired in November 2008.

Colgate-Palmolive (CL) | Yield: 2.6% | Growth: 12.5% | Years: 47
Colgate-Palmolive Company (Colgate) is a major consumer products company that markets oral, personal and household care, and pet nutrition products in more than 200 countries and territories.

Weyco Group, Inc. (WEYS) | Yield: 2.7% | Growth: 15.0% | Years: 29
Weyco Group, Inc. distributes, wholesale & retail, men’s branded footwear in the U.S., Canada, Europe; offers casual footwear, dress shoes and accessories under Florsheim, other brands.

Coca-Cola Company (KO) | Yield: 2.8% | Growth: 7.3% | Years: 48
The Coca-Cola Company is the world’s largest soft drink company, KO also has a sizable fruit juice business.

Bemis Company, Inc. (BMS) | Yield: 2.8% | Growth: 2.2% | Years: 27
Bemis Company Inc. is a leading maker of a broad range of flexible packaging and pressure-sensitive materials.

Pepsico, Inc. (PEP) | Yield: 2.9% | Growth: 6.5% | Years: 38
PepsiCo, Inc. is a major international producer of branded beverage and snack food products.

V.F. Corporation (VFC) | Yield: 3.0% | Growth: 2.1% | Years: 36
V.F. Corp is global apparel company, with leading shares in denim and daypacks. It is transforming itself into a designer and marketer of lifestyle apparel brands.

Procter & Gamble (PG) | Yield: 3.0% | Growth: 7.0% | Years: 54
The Procter & Gamble Company is a leading consumer products company markets household and personal care products in more than 180 countries.

Sonoco Products Co. (SON) | Yield: 3.1% | Growth: 1.9% | Years: 27
Sonoco Products Co. makes paper and plastic packaging products serving various industries and markets in more than 85 countries.

Avon Products, Inc. (AVP) | Yield: 3.1% | Growth: 4.8% | Years: 20
Avon Products Inc. is the world’s leading direct marketer of cosmetics, toiletries, fashion jewelry, and fragrances and has more than 5 million sales representatives worldwide.

The Clorox Company (CLX) | Yield: 3.4% | Growth: 9.3% | Years: 35
The Clorox Company is a diversified producer of household cleaning, grocery and specialty food products and is also a leading producer of natural personal care products.

H.J. Heinz Company (HNZ) | Yield: 3.8% | Growth: 1.9% | Years: 7
The H.J. Heinz Company produces a wide variety of food products worldwide, primarily condiments, convenience meals and snacks.

Kimberly-Clark Co. (KMB) | Yield: 4.1% | Growth: 6.7% | Years: 38
Kimberly Clark Corp. is a global consumer products company that produces tissue, personal care and health care. Its brands include Huggies, Pull-Ups, Kotex, Depend, Kleenex, Scott and Kimberly-Clark.

Leggett & Platt, Inc. (LEG) | Yield: 4.7% | Growth: 3.0% | Years: 38
Leggett & Platt Inc makes a broad line of bedding and furniture components and other home, office and commercial furnishings, as well as diversified products for non-furnishings markets.

Conclusion

The Consumer Goods is the third largest sector in my database of dividend stocks. Of the 198 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, including Warren Buffett’s Berkshire Hathaway (BRK.A) at 42%. Keep the soap and toilet paper coming!

Full Disclosure: Long CL, KO, PEP, PG, CLX, KMB, LEG. See a list of all my income holdings here.

(Photo Credit)

9 Stocks Not Missing Their Opportunity To Raise Dividends *

D4L — Fri, 28 May 2010 07:30:45 +0000

At some point in the future will we look back at our actions today and refer to them as our greatest missed opportunity? A successful dividend growth strategy takes time. Unfortunately, many income investors don’t have the luxury of time on their side and must focus on high-yield investments to meet current expenses. These high-yield investments are often accompanied by high-risk. For those with time, a solid long-term strategy focusing on quality stocks that grow their dividends will treat them well in their retirement years.

Below are several companies that did not miss missing this opportunity to raise their cash dividends:

Bunge Limited (BG) is an integrated global agribusiness and food company that has operations primarily in North and South America, and distribution capabilities worldwide. May 20th the company increased its quarterly dividend 9.5% to $0.23/share. The dividend is payable on September 2, 2010, to shareholders of record on August 19, 2010. The yield based on the new payout is 1.79%.

Knight Transportation (KNX) is a short- to medium-haul truckload carrier that transports general commodities and temperature-controlled loads. May 20th the company raises its quarterly dividend 20% to $0.06/share. The dividend is payable to shareholders of record on June 4, 2010 and is expected to be paid on June 25, 2010. The yield based on the new payout is 1.24%.

SEI Investments (SEIC) is a provider of investment processing, fund processing, and investment management business outsourcing solutions. May 25th the company increased its quarterly dividend 10% to $0.10/share. The dividend is payable on June 28 to shareholders of record on June 23. The ex-dividend date is June 21. SEIC is a Dividend Achiever and has raised its dividend for 18 consecutive years. The yield based on the new payout is 1.00%.

UnitedHealth Group (UNH) is a leading health care services company providing health benefit services to over 32 million individuals across the U.S. May 26th the company raised its quarterly dividend to $0.125/share. The dividend will be paid on June 21, 2010 to all shareholders of record of UnitedHealth Group common stock as of the close of business on June 7, 2010. The ex-dividend date is June 3, 2010. The yield based on the new payout is 1.74%.

Deere & Co. (DE) is the world’s biggest producer of farm equipment, and also is a large producer of construction machinery and lawn and garden equipment. May 26th the company increased its quarterly dividend 7% to $0.30/share. The dividend is payable August 2, 2010, to stockholders of record on June 30, 2010. The ex-dividend date is June 28, 2010. The yield based on the new payout is 2.14%.

McKesson Corp (MCK) provides pharmaceutical supply management and information technologies to a broad range of health care customers. May 26th the company increased its semi-annual dividend 50% to $0.18/share. The dividend is payable on July 1, 2010, to shareholders of record on June 10, 2010. The ex-dividend date is June 8, 2010. The yield based on the new payout is 1.04%.

H.J. Heinz (HNZ) produces a wide variety of food products worldwide, with a major presence in the U.S. in condiments, frozen potatoes, and convenience meals. May 27th the company raised their annualized common stock dividend in Fiscal 2011 by 12 cents, or 7.1%, to $1.80 from $1.68. The yield based on the new payout is 4.04%.

Cato (CATO) offers apparel and accessories, including sportswear, dresses, coats, shoes, lingerie, costume jewelry, and handbags for females in the southeastern U.S. May 27th the company increased its quarterly dividend by 12% to $0.185/share. The dividend is payable on June 28 to shareholders of record on June 14. The ex-dividend date is June 10. The yield based on the new payout is 3.06%.

Williams-Sonoma (WSM) sells high-quality products for the home via its retail stores and various direct-to-customer channels. May 27th the company raised its quarterly dividend 15% to $0.15/share. The dividend is payable on August 24, 2010 to shareholders of record as of the close of business on July 27, 2010. The ex-dividend date is July 23, 2010. The yield based on the new payout is 2.00%.

Selecting stocks with increasing dividends is critical for an income growth strategy. The above list contains stocks that recently raised their dividends, it is not a list of recommend buys. As always, due diligence should be performed before buying or selling any stock. For a list of stocks with a long string of consecutive cash dividend increases, see this list.

Full Disclosure: No position in the aforementioned securities. See a list of all my income holdings here.

(Photo Credit)

Dividend Stocks Are ‘Slow Good’*

D4L — Fri, 29 May 2009 10:30:51 +0000

For years Heinz Ketchup ran commercials describing their product as ‘slow good’. It was an obvious inference to ‘so good’ and that it was worth waiting on. Investing in dividend stocks in very similar. You certainly won’t find sudden wealth on any given day, but over time those compounding dividends will handsomely reward you.

Speaking of the H. J. Heinz Company (HNZ) and dividends, yesterday the company reported results in-line with the analyst consensus estimate and raised its quarterly common stock dividend from $0.415 to $0.42. The current dividend yield based on the new rate is 4.63%.

Below are other companies being ‘slow good’ to their shareholders by increasing the cash dividends paid:

Unum Group (UNM) raised its quarterly dividend by 10% to $0.0825/share, yielding 1.96%
PPD, Inc. (PPDI) increased its quarterly dividend by 20% to $0.15/share, yielding 3.05%
Monro Muffler (MNRO) boosts its quarterly dividend by 16.7% to $0.07/share, yielding 1.08%
Fred’s (FRED) quarterly dividend soared by 50% to $0.03/share, yielding 0.90%
SUPERVALU (SVU) raised its quarterly dividend by 1.45% to $0.175/share, yielding 4.36% (Analysis)

Rising dividends are good, but to be great you have to do year after year. For companies with a long string of consecutive dividend increases, see this list.

Full Disclosure: No position in the aforementioned companies. See a list of all my income holdings here.

(Photo Credit)

The Few, The Proud, The Dividend Raisers! *

D4L — Fri, 13 Mar 2009 10:30:45 +0000

This last week was similar to each of the two prior weeks in that we saw another large bank slash its dividend by more than 80%. Last Friday, Wells Fargo & Company (WFC) cut its dividend by 85% to $0.05. The company said it would help them retain an additional $5 billion in common equity each year.

During the week several big name companies declared dividends, including:

Safeway (SWY) $0.0828/share – yield 1.87%
General Mills (GIS) $0.43/share – yield 3.46%
Microsoft (MSFT) $0.13/share – yield 3.43% – (Analysis)
Heinz (HNZ) $0.415/share – yield 5.40%
Target (TGT) $0.16/share – yielding 2.35% - (Analysis)
Kraft (KFT) $0.29/share – yield 5.25% - (Analysis)

It is great when companies, like those above, follow through and pay their regular dividends at the appointed time. But it is even more important for companies to follow through and raise their dividend at the appropriate time. Unfortunately, fewer companies are increasing their dividends. This week there were only two to note:

Piedmont Natural Gas Company Inc. (PNY) is an energy services company that distributes natural gas to 1,016,000 residential, commercial and industrial customers in portions of North Carolina, South Carolina and Tennessee. On March 6th, the company declared a 3.8% increase in its quarterly dividend of $0.27/share. The dividend is payable April 15, 2009, to shareholders of record at the close of business on March 25, 2009. The stock now yields 4.85%. This is the 31st consecutive year PNY has raised its dividend. The company is a dividend Achiever and a dividend Champion.

Warwick Valley Telephone Company (WWVY) provides telephone, Internet and video services to customers in the towns of Warwick, Goshen and Wallkill, New York and West Milford and Vernon townships, New Jersey. On March 10th, the company increased its quarterly cash dividend by 10% to $0.22/share up from $0.20/share. The dividend will be paid on March 31, 2009 to shareholders of record as of March 20, 2009. Wisner H. Buckbee, Chairman of the Board, said “This dividend increase demonstrates the Board’s confidence in the continued strong performance of WVT’s business, our cash generation capabilities, and our firm commitment to our shareholders.” The stock now yields 9.78%.

For more companies around the world with a long string of consecutive dividend increases, see Dividends Value’s Stock Ideas page.

Full Disclosure: No position in any of the aforementioned securities.

(Photo: Steve Woods)