There can be something said for simplicity. In these trying times, it’s important for dividend investors to seek out stocks that can win – no matter the economic picture. Often, the answer is found in basic needs and luxuries. And you can’t get more basic than a candy bar or pack of gum.
For our new Best Dividend Stocks List pick, this operating niche has made it a champion for decades. As one of the largest producers of chocolate, candy and chewing gum, our new pick operates in a very special niche. Its products are often considered low-cost “luxuries” that blend the line between discretionary and consumer staples. Demand continues to remain steady. However, our pick is now able to charge a bit more for its products than say a roll of toilet paper. This provides plenty of strong margins and better profits.
It also results in stronger dividends for its shareholders.
Our pick has paid dividends for decades, both since its founding and since 2005. It has also managed to increase its annual payout by more than 200%, including during the Great Recession, which underscores its defensive niche.
With COVID-19 now starting to heavily hit the economy, our pick’s focus on sweet treats and little luxuries is exactly the kind of conservative play income seekers need in the new environment. Margins, cash flows and dividends remain fat and secure.
To summarize, here are five reasons why you should own this stock:
1. One of the largest manufacturers of chocolate, candy and other treats, with several leading brands under its umbrella.
2. Huge moat and recession-resistant nature, with a focus on high-margined consumer-niche products.
3. Pulled in nearly $8 billion in sales last year.
4. Acquisitions and tangential products under top brands have continued to power its earnings over the years.
5. Healthy payout ratio of 50% and growing yield of 2.66%.
Removal of an Industrial Supplier
With COVID-19 hitting the economy, firms in the industrial sector have felt the most pain. This includes our parts’ supplier on our Best Dividend Stocks List. Despite its huge moat, long-term dividend prowess and other benefits, investors have sold the name in the current market decline, which has caused its Relative Strength score to suffer and push down its overall DARS score. As a result, we’ve been forced to remove it from our coveted list to make way for our new confectionary selection.
Our Best Dividend Stocks List has 20 of the highest-rated stocks by our proprietary rating system. Go Premium to find out the entire list.
