In this article, we discuss the 10 consumer stocks that pay dividends.
2022 is certainly proving to be an uncertain time-period for investors, just like 2021, which was just like 2020. Amidst such economic instability, consumer stocks offer a defensive hedge against market volatility. These are companies offer staple products – every day items that you don’t ever debate buying, such as cleaning products, cosmetics, grocery and personal care items. Furthermore, these stocks also provide a hedge against inflation, since these companies can pass on the rise in prices to their customers without significantly affecting sales.
Inflation has market-watchers worried, and rightly so. The consumer price index, a benchmark for inflation rates, gained 7% in 2021, which is the biggest jump in a year since 1982. Supply chain issues and labor shortages have also persisted since the first Covid lockdown in 2020. For investors to diligently navigate their way through these choppy waters, adding a solid dividend-paying consumer stock could bring much-needed stability to their portfolios. Some of the top consumer stocks to buy include Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG) and Walmart Inc. (NYSE:WMT), along with others mentioned below.
Photo by Artem Beliaikin on Unsplash
Our Methodology
For the following list, we picked consumer stocks that are paying dividend yields. We made sure these were dominant companies enjoying large market shares. Hedge fund sentiment around each stock was derived from Insider Monkey’s database of 924 elite hedge funds, and has been provided to give our readers additional context for their investment choices.
10 Consumer Stocks that Pay Dividends
10. Church & Dwight Co., Inc. (NYSE:CHD)
Number of Hedge Fund Holders: 27
Dividend Yield (as of March 8): 1.10%
Church & Dwight Co., Inc. (NYSE:CHD) is first up on our list of consumer stocks that pay dividends. Based in New Jersey, the firm offers household, personal care, and specialty products around the world through various brand names.
On January 28, Church & Dwight Co., Inc. (NYSE:CHD) declared a $0.2625 per share quarterly dividend, which was an increase of 4% from its prior dividend of $0.2525. As of March 8, the company pays out a dividend of 1.10%, and has grown its dividend payout for a period of 22 consecutive years. On February 3, the S&P 500 Dividend Aristocrats Index (SPDAUDN) added Church & Dwight Co., Inc. (NYSE:CHD) to the list of dividend aristocrats within the index.
Hedge fund sentiment was positive on Church & Dwight Co., Inc. (NYSE:CHD) in the fourth quarter of 2021, where 27 hedge funds held positions worth $1.73 billion in the firm. In contrast, 20 hedge funds reported bullish bets on the company in Q3 2021, with aggregate stakes worth $1.36 billion. Fundsmith LLP was the top shareholder in Church & Dwight Co., Inc. (NYSE:CHD) by the close of the fourth quarter, with a $1.19 billion stake consisting of 11.65 million shares. This showed a 6% increase in holding over the previous quarter, and represents 2.91% of the fund’s total portfolio.
Reporting its Q4 earnings on January 28, Church & Dwight Co., Inc. (NYSE:CHD) declared an EPS of $0.64, which came in above estimates by $0.04. The firm raked in $1.37 billion in revenue for the fourth quarter, beating analysts’ forecasts by $23.59 million, and showing an increase of 5.67% from the year-ago quarter.
LRT Capital Management talked about Church & Dwight Co., Inc. (NYSE:CHD) in its Q1 2021 letter, starting off their analysis with a bit of humor. The fund said:
“Church & Dwight is another classic “defensive” company – it sells cleaning products (Arm & Hammer, OxiClean), toothache medication (Orajel), and condoms (Trojans). For those that fail to purchase Trojans, the company also offers pregnancy test kits (First Response). Joking aside, the company’s revenue has historically grown by GDP+ rates organically. Combined with thoughtful acquisitions, 10-year revenue growth has averaged +6.6%, which has translated to EPS growth of over +11% per year. The company has accomplished all this with ½ of the overall volatility of the stock market. The company reported Q4 2020 earnings on January 29th, beating both top (revenue +14% YoY) and bottom line measures (EPS $0.59 vs $0.51 expected). We view the shares as reasonably valued at 26x forward earnings given the high level of predictability of the company’s earnings and low financial leverage. Shares are down 0.5% year-to-date.”
In addition to Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG) and Walmart Inc. (NYSE:WMT), Church & Dwight Co., Inc. (NYSE:CHD) is a top consumer stock that pays dividends.
9. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 63
Dividend Yield (as of March 8): 1.61%
Next up is retail giant Walmart Inc. (NYSE:WMT), which posted a $0.56 per share quarterly dividend on February 17, signaling a 1.8% increase from its prior dividend of $0.55. This brings the firm’s dividend yield to 1.61% as of March 8.
On February 18, Jefferies analyst Stephanie Wissink maintained a ‘Buy’ rating on Walmart Inc. (NYSE:WMT) and reduced the price target to $175 from $184, stating that the firm is well-positioned to gain further market share in the current inflationary macro environment.
For the fourth quarter, Walmart Inc. (NYSE:WMT) posted an EPS of $1.53, which beat analysts’ expectations by $0.03. Revenue of $151.53 billion for the quarter was above consensus estimates by $1.49 billion.
63 hedge funds were bullish on Walmart Inc. (NYSE:WMT) at the close of the fourth quarter, with combined stakes worth $7.13 billion. This is down from 71 hedge funds in the preceding quarter. GQG Partners held 10.42 million shares worth $1.5 billion in Walmart Inc. (NYSE:WMT) by the end of December, making it the largest shareholder of the firm.
8. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 67
Dividend Yield (as of March 8): 2.37%
The Procter & Gamble Company (NYSE:PG) is a multinational producer of branded consumer products, including beauty, grooming, health care, baby care and feminine products. It posted an EPS of $1.66 for the fourth quarter, beating estimates by $0.01. Quarterly revenue was up 6.12% year-over-year, coming in at $20.95 billion and outperforming estimates by $617.36 million.
The Procter & Gamble Company (NYSE:PG) has grown its dividend payout for 65 consecutive years. In January, it declared $0.8698 per share quarterly dividend, which fell in-line with previous. The dividend yield comes in at 2.37% as of March 8.
Morgan Stanley analyst Dara Mohsenian maintained an ‘Overweight’ rating on The Procter & Gamble Company (NYSE:PG) stock on January 20, and revised the price target to $177 from $161. The analyst sees the firm as his favorite name in the Household Products segment, and sees sustained revenue growth after its recent reinvestment and strategy changes over the last few years.
On March 8, The Procter & Gamble Company (NYSE:PG) announced that it was suspending all new capital investments in Russia after its invasion of Ukraine, and whilst also reducing its portfolio to focus just on basic hygiene, health and personal products.
Out of all the hedge funds tracked by Insider Monkey, 67 were recorded holding positions in The Procter & Gamble Company (NYSE:PG) at the close of the fourth quarter, with a combined value of $6.61 billion. This is down from 69 hedge funds with combined holdings worth $6.41 billion in the firm a quarter ago.
7. Colgate-Palmolive Company (NYSE:CL)
Number of Hedge Fund Holders: 48
Dividend Yield (as of March 8): 2.40%
Colgate-Palmolive Company (NYSE:CL) manufactures and sells consumer goods such as personal care, hygiene, home care and pet care products around the globe. In the fourth quarter, 48 hedge funds held stakes in the firm with combined holdings of $2.06 billion. In comparison, 54 hedge funds held $2.57 billion worth of positions in Colgate-Palmolive Company (NYSE:CL) in the previous quarter. The top shareholder in the firm was First Eagle Investment Management, with 11.58 million shares valued at $988.4 million.
In January, Credit Suisse analyst Kaumil Gajrawala kept an ‘Outperform’ rating on Colgate-Palmolive Company (NYSE:CL) shares, and lowered the price target to $90 from $95. The firm recently announced its 2022 Global Productivity Initiative, under which he company will reallocate resources to strategize and boost growth, and streamline the company’s supply chain to reduce structural costs. This program will cost Colgate-Palmolive Company (NYSE:CL) around $200-240 million, and is expected to be mostly completed in 2022.
The firm declared a quarterly dividend of $0.45 per share on January 20, which was in-line with previous. Colgate-Palmolive Company (NYSE:CL) has paid dividends to its shareholders for the last 50 years, and grown its yield for 17 consecutive years.
First Eagle Investment Management talked about Colgate-Palmolive Company (NYSE:CL) in its Q1 2021 investor letter. Here’s what the fund said:
“The leading detractors in the quarter (included) Colgate-Palmolive Company. After a strong 2020 fueled in part by lockdown-driven demand, consumer staples stocks generally cooled during the first quarter as investors shifted attention to the more economically sensitive areas of the market likely to benefit from re-openings and improved discretionary spending. The effects of this rotation could be seen in the share price underperformance of names like Colgate-Palmolive.”
6. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 83
Dividend Yield (as of March 8): 2.51%
Johnson & Johnson (NYSE:JNJ) is a dividend king stock, having increased its payout for the last 59 years. As of March 8, it offers a dividend yield of 2.51% to shareholders. The firm offers consumer products in the healthcare and pharmaceutical segments, along with medical devices and skincare products. On January 4, Johnson & Johnson (NYSE:JNJ) declared a $1.06 per share quarterly dividend, in-line with previous.
Out of all the hedge funds tracked by Insider Monkey, 83 were long Johnson & Johnson (NYSE:JNJ) at the end of Q4 2021. The combined value of these holdings stood at $7.38 billion. In comparison, 88 hedge funds held stakes in the firm a quarter ago, with aggregate positions worth $6.87 billion. Terry Smith’s Fundsmith LLP was the top shareholder in Johnson & Johnson (NYSE:JNJ) in the fourth quarter, with a stake comprising of 7.21 million shares worth $1.23 billion.
On March 2, BofA analyst Geoff Meacham reinstated coverage of Johnson & Johnson (NYSE:JNJ) with a ‘Neutral’ rating and price target of $185, noting that he is positive on the firm’s near-term growth prospects along with its ‘safe haven’ status within the current macro and geopolitical environment.
Johnson & Johnson (NYSE:JNJ) posted earnings per share of $2.13 in the fourth quarter, beating estimates by $0.01. Quarterly revenue of $24.80 billion was up 10.36% as compared to the year-ago period, but missed consensus estimates by $485.39 million.
Distillate Capital, an investment firm, mentioned many stocks in its Q2 2021 investor letter, and Johnson & Johnson (NYSE:JNJ) was one of them. The fund said:
“The largest additions in the rebalance, Johnson & Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”
Just like The Procter & Gamble Company (NYSE:PG) and Walmart Inc. (NYSE:WMT), Johnson & Johnson (NYSE:JNJ) is a dividend-paying consumer stock on the radar of investors.
5. PepsiCo, Inc. (NYSE:PEP)
Number of Hedge Fund Holders: 60
Dividend Yield (as of March 8): 2.72%
PepsiCo, Inc. (NYSE:PEP) is a consumer staple company that sells beverages and convenience foods around the world, and is known as a dividend king, having grown its payout to shareholders for 49 consecutive years. As of March 8, PepsiCo, Inc. (NYSE:PEP) offers a dividend yield of 2.72%, and has seen its share price gain 19.61% in the last 12 months, and 1.75% in the last 6 months.
On February 14, Barclays analyst Lauren Lieberman lowered the firm’s price target on PepsiCo, Inc. (NYSE:PEP) to $180 from $186 and kept an ‘Overweight’ rating on the company shares. The analyst noted that the firm is guiding estimates towards the higher end of its long-term sales growth algorithm for 2022.
As of Q4 2021, 60 out of the 924 elite hedge funds tracked by Insider Monkey were long PepsiCo, Inc. (NYSE:PEP), with combined holdings worth $4.64 billion. This is down from 61 hedge funds in the previous quarter with combined positions worth $4.43 billion. Fundsmith LLP was the largest shareholder in PepsiCo, Inc. (NYSE:PEP) at the close of the fourth quarter, with 10.41 million shares valued at $1.80 billion, signaling a 4% increase in holding from the preceding quarter.
On March 7, PepsiCo, Inc. (NYSE:PEP) announced that it was suspending sales of its Pepsi-Cola, Miranda, 7Up and other beverages in Russia, after facing increasing international pressure to do so. The firm generated more than 2% of its total revenue from the Russian market, but now will only continue to supply essential products such as milk, dairy products, baby food and baby formula. It will also cease all capital investments and promotional activities in the country.
4. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 70
Dividend Yield (as of March 8): 3.00%
The Coca-Cola Company (NYSE:KO) ranks next on our list of consumer stocks that pay dividends. On February 17, the firm raised its quarterly dividend by 5% from $0.42 to $0.44 per share, marking a 60th consecutive annual dividend increase for the Atlanta-based firm.
Evercore ISI analyst Robert Ottenstein on February 15 raised the price target on The Coca-Cola Company (NYSE:KO) to $70 from $63 and maintained an ‘Outperform’ rating on the firm’s shares. The analyst sees potential for continued sales growth of around 5-6%, steady dividend increases and share buybacks giving impressive returns to shareholders of The Coca-Cola Company (NYSE:KO). According to the analyst, the firm continues to improve its long-term outlook and business model.
The Coca-Cola Company (NYSE:KO) posted earnings per share of $0.45 for the fourth quarter, exceeding estimates by $0.04. Quarterly revenue stood at $9.47 billion, beating analysts’ forecasts by $579.32 million and recording a 10.08% increase from the year-ago period.
70 hedge funds were long The Coca-Cola Company (NYSE:KO) in Q4 2021, as compared to 61 in the preceding quarter, showing growing investor confidence in the company. Warren Buffett’s Berkshire Hathaway held 400 million shares of The Coca-Cola Company (NYSE:KO) in the fourth quarter, valued at $23.68 billion making it the top shareholder of the firm.
3. The Clorox Company (NYSE:CLX)
Number of Hedge Fund Holders: 39
Dividend Yield (as of March 8): 3.35%
The Clorox Company (NYSE:CLX) deals in the manufacture and sale of cleaning products around the globe. It also provides food products through its Hidden Valley brand name. 39 hedge funds held stakes in the firm as of the fourth quarter, with aggregate holdings worth $1.16 billion. This shows a positive trend from Q3 2021, where 34 hedge funds reported owning positions in The Clorox Company (NYSE:CLX). In the fourth quarter, Cedar Rock Capital held 1.36 million shares of Clorox valued at roughly $238 million, making it the top shareholder of the firm.
On February 16, The Clorox Company (NYSE:CLX) declared a quarterly dividend of $1.16 per share, which was in-line with previous. As of March 8, the dividend yield stands at 3.35%. The Clorox Company (NYSE:CLX) has increased its dividend payments for the last 44 years in a row.
Citi analyst Wendy Nicholson gave The Clorox Company (NYSE:CLX) a ‘Buy’ rating in February, and lowered the price target to $160 from $194, noting that the stock was at an attractive valuation for buyers.
2. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Number of Hedge Fund Holders: 42
Dividend Yield (as of March 8): 4.02%
Then there’s Walgreens Boots Alliance, Inc. (NASDAQ:WBA), a drug retail company which operates a large network of pharmacies in the United States under the Walgreens and Duane Reade brands. It posted a quarterly dividend of $0.4775 per share on January 27, which was in-line with previous. As of March 8, Walgreens Boots Alliance, Inc. (NASDAQ:WBA) provides a 4.02% yield to its shareholders, and has paid dividends for over 30 years.
In January, Mizuho analyst Ann Hynes raised the price target on Walgreens Boots Alliance, Inc. (NASDAQ:WBA) to $56 from $51 and reiterated a ‘Neutral’ rating on the shares, citing an increased outlook of COVID testing and vaccine benefits for the increase in target price. In March the company announced that it had partnered with Labcorp (NYSE:LH) and U.S. Department of Health and Human Services to provide free Covid testing kits at home to deserving individuals throughout the United States.
Walgreens Boots Alliance, Inc.’s (NASDAQ:WBA) Q4 earnings per share came in at $1.68, above analysts’ estimates by $0.34. The company’s revenue for the fourth quarter stood at $33.90 billion, outperforming analysts’ forecasts by $946.75 million.
Hedge fund sentiment was up on Walgreens Boots Alliance, Inc. (NASDAQ:WBA) in the fourth quarter, where 42 hedge funds recorded bullish bets on the company shares, as compared to 37 in the quarter before. Camber Capital Management held the biggest stake in Walgreens Boots Alliance, Inc. (NASDAQ:WBA) in Q4 2021, consisting of 3.5 million shares valued at $182.56 million.
Here is what Miller Howard Investments had to say about Walgreens Boots Alliance, Inc. (NASDAQ:WBA) in its Q3 2021 investor letter:
“While optimistic about a recovery, we continue to balance our cyclical holdings with dividend-payers in stable, less economically-sensitive industries. We took a position in Walgreens (WBA) based on its low valuation, high dividend yield, and stable business model.”
1. Unilever PLC (NYSE:UL)
Number of Hedge Fund Holders: 23
Dividend Yield (as of March 8): 4.58%
Unilever PLC (NYSE:UL) tops our list of consumer stocks that pay dividends, with a 4.58% yield as of March 8. The firm makes and sells a wide variety of consumer products around the world, and is based in London, UK.
As of the fourth quarter, 23 hedge funds held positions in Unilever PLC (NYSE:UL), with a combined value of $1.78 billion. This shows increasing investor confidence from last quarter, where 17 hedge funds were bullish on the company shares. Gardner Russo & Gardner held a $457.28 million stake in Unilever PLC (NYSE:UL) at the end of Q4 2021, consisting of 8.5 million shares which made it the largest shareholder of the firm.
In late February, Goldman Sachs analyst John Ennis reinstated coverage of Unilever PLC (NYSE:UL) with a ‘Neutral’ rating and price target of 4,200 GBp price target, which represented an upside of 8%. Analyst James Edwardes Jones of RBC Capital had a ‘Sector Perform’ rating on Unilever shares with a price target of 3,600 GBp, noting that he foresees lower capital expenditure and improved business performances for the firm heading forward.
On March 8, Unilever PLC (NYSE:UL) announced that it had suspended all imports and exports of products to and from Russia, whilst also ceasing all advertising expenditures in the country.
Fundsmith LLP, an investment firm, talked about Unilever PLC (NYSE:UL) in its Q4 2021 investor letter. Here’s what the fund said:
“Unilever seems to be labouring under the weight of a management which is obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business. The most obvious manifestation of this is the public spat it has become embroiled in over the refusal to supply Ben & Jerry’s ice cream in the West Bank. However, we think there are far more ludicrous examples which illustrate the problem. A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot. The Hellmann’s brand has existed since 1913 so we would guess that by now consumers have figured out its purpose (spoiler alert — salads and sandwiches). Although Unilever had by far the worst performance of our consumer staples stocks during the pandemic we continue to hold the shares because we think that its strong brands and distribution will triumph in the end.”
You can also take a look at 10 Best Dividend Stocks for Passive Income and 10 Best Gold Stocks To Buy Now.
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Disclosure. None. 10 Consumer Stocks that Pay Dividends is originally published on Insider Monkey.
