| Dividend Yield | Payout Ratio | |
|---|---|---|
| Procter & Gamble | 3.1% | 50% |
| Kellogg | 2.7% | 69% |
| Philip Morris | 3.7% | 64% |
Source: Yahoo finance
| 2010 | 2011 | 2012 | |
|---|---|---|---|
| Procter & Gamble | 2.30x | 1.85x | 1.80x |
| Kellogg | – | 1.60x | 2.70x |
| Philip Morris | 2.00x | 2.00x | 1.60x |
Catalysts
The Procter & Gamble Company (NYSE:PG) has been working on improving its costs structure. These cost-curtailing and operational efficiency-improving efforts are likely to translate into savings of $10 billion by the end of the 2016 fiscal year. The company’s significant emerging market exposure will fuel growth and is another important stock price catalyst.
Kellogg Company (NYSE:K)’s ongoing efforts to improve productivity, as well the realization of expected synergies from the acquisition of Pringles and the cost of inputs (raw materials), will be important stock price drivers in the near future.
I believe the most central performance driver for Philip Morris International Inc. (NYSE:PM) is how tactfully the company works towards alternate tobacco categories. As the tobacco industry has been suffering from declining volume, alternate tobacco categories holds a critical importance for the tobacco industry and Philip Morris International Inc. (NYSE:PM).
Risks
The three companies mentioned above have significant international market exposure, adding to the foreign currency risk in their portfolios. The strengthening of the dollar against other world currencies can negatively impact the revenues and eventual earnings of the companies as a result.
Foolish bottom line
All three companies have delivered strong financial performances in the past and have robust growth projections. Furthermore, these companies offer decent and safe dividend yields which are backed by their strong cash flows. Healthy growth projections for the companies will result in dividend growth in future as well. In the ongoing low-yield environment, these The Procter & Gamble Company (NYSE:PG), Philip Morris International Inc. (NYSE:PM) and Kellogg Company (NYSE:K) all remain attractive investment options for income-seeking investors. Therefore I remain bullish on these stocks.
Faizan Chudhry has no position in any stocks mentioned. The Motley Fool recommends Procter & Gamble. The Motley Fool owns shares of Philip Morris International. Faizan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article 3 Consumer Stocks with Robust Growth and Solid Dividends originally appeared on Fool.com is written by Faizan Chudhry.
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