Consumer products firms are often seen as calm ports during market storms. After all, no matter what goes on with the economy, people still need to brush their teeth and wash their clothes. This has helped the sector realize steady cash flows and revenues throughout history. And it’s also produced plenty of dividends. But as we’ve seen with the latest severe economic downturn, not all consumer products firms are alike.
This is all great news for our latest Best Dividend Stocks List pick in the sector.
Our pick is one of the largest producers of laundry soap, toothpaste, deodorant and other personal care products. The kicker is that our firm generally produces more value-oriented brands. During the last recession, many consumers traded down from premium brands in order to save money. The best part is that a large swath of these consumers stayed after their financial picture improved. This has allowed our pick to become a profit machine and increase its dividend steadily over the last decade.
With the market crashing and recession perhaps already upon us, our pick should benefit again from another round of consumers trading down.
But our pick isn’t just about value; it has some growth behind it as well. Thanks to smart M&A moves, our pick has expanded into the growing pet-care segment. Featuring higher margins than toothpaste and vitamins, this business has provided a big boost in recent years.
All in all, our new pick has just what it takes to get through the current economic environment, thrive and, ultimately, reward investors.
To summarize, here are five reasons why you should own this stock:
1. Leading consumer products company specializing in recession-resilient, value-for-money brands.
2. Pulled in nearly $4.4 billion in sales in 2019 – a year-over-year increase of 5.1%.
3. Increased its dividend for nearly 15 years straight, including a more than 5% increase at the start of the year.
4. Moved into the faster-growing pet-care segment via tangential brand growth and M&A.
5. Healthy payout ratio of 36% and growing yield of 1.55%.
Removal of an Asset Manager
Despite great long-term returns and its dominance in retirement plans, our asset manager pick has been hit hard. With investors continuing to sell stocks, mutual funds and other investments, total AUM has started to fall for our pick. Meanwhile, the shift to indexing has also hurt its actively managed funds. As a result, investors have sold the stock hard – and that’s caused its overall DARS score to plunge. We’ve now been forced to remove the stock from our coveted list.
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.
