The world is a scary place right now. The novel coronavirus pandemic hasn’t really abated, economic activity has decreased, and now racial tensions are dotting the United States. It’s not an easy time to be an investor, especially one looking to live off their dividends. Volatility continues to be the new normal. In these types of tiring times, simplicity could be the answer.
And you can’t get simpler than a chocolate bar.
Thanks to the consistency of snacking, foods like cookies, candy, and gum have long been recession and volatility proof. For our best Dividend Stock List Pick in the sector, this has meant a steady diet of profits. It has also meant plenty of dividends for shareholders. The simplicity and overall low cost of these ‘consumer discretionary’ products make for plenty of payout power during downturns.
Check out our original pick here.
Those dividends should continue through the current crisis and even if it escalates.
Due to the coronavirus, many of the raw ingredients needed to produce its snacks have dipped in price in recent quarters. That’s helping boost its margins further. Add in the fact that work from home and stay in place orders have boosted overall snack food sales, and you can see why our pick managed to see nearly 11% earnings growth during its latest reported quarter.
For investors, now is not the time to be a hero and take on plenty of risk. With our pick in the packaged food sector, they get plenty of growth potential and stability.
To summarize, here are five reasons why you should own this stock:
1. It has a large international portfolio of brands with sales hitting well over $25 billion for full-year 2019.
2. The coronavirus has reduced commodity costs for the firm and boosted overall margins.
3. It has gained significant market share – as high as 90% – in some of its operating categories during the crisis.
4. Since its spin-off, our pick has managed to steadily reward shareholders, paying out more than $3 billion in dividends and buybacks last year.
5. It has a healthy payout ratio of 44% and growing yield of 2.22%.
Our Best Dividend Stocks List has 20 of the highest-rated stocks by our proprietary Dividend.com Rating system. Go Premium to find out the entire list.
