Campbell Soup Company (CPB), PepsiCo, Inc. (PEP), The Coca-Cola Company (KO): Pick the Right Dividend Stocks With These 3 Winners

Think about it. Consumers are becoming more health conscious about soda. New studies, regarding the potential adverse effects of artificial sweeteners, may turn people away from diet soda even faster. Yet the consumer has to drink something

The Coca-Cola Company (NYSE:KO) has been preparing for a more health-conscious consumer for years. People may stop drinking Coke, but they won’t stop buying drinks altogether.

Every dollar that Vitamin Water steals away from Diet Coke is still a dollar that The Coca-Cola Company (NYSE:KO) earns. They own a brand in every single beverage line at this point, from fruit juice, to cola, to water. That’s a powerful moat, one that I like to call “the illusion of choice.” Consumers feel like they’re making better choices, Coca-Cola still gets paid, and everyone wins.

Likewise, PepsiCo, Inc. (NYSE:PEP)’s CEO, Indra Nooyi, has been ahead of this curve for years. Ever since she’s taken the helm at Pepsi she’s made healthy eating, sustainability, and social consciousness a priority. At times she’s been criticized for ignoring short-term profits, and focusing instead on long-term sustainability. Long-term Investors in PepsiCo, Inc. (NYSE:PEP) should consider themselves lucky, that she’s had the guts to do so!

These cola giants have their work cut out for them. Slower growth, combined with some rough PR over nutrition, may provide some decent buying opportunities going forward. I like Campbell’s today, and the cola makers on some pullbacks, for a similar investment thesis.

Growth and safety are a dividend investors best friend, andin my opinion, they all have it.

Dividend investing: Payout and growth are key

You can find high dividends everywhere, but they’re not all created equal. Dividend paying stocks with low payout ratios, and growth catalysts, are more likely to increase their dividend payment going forward.

If interest rates do continue to rise, and bond values decrease, the dividend payers that meet these criteria will offer the best income alternative. They should see increased dividend payments and stable, if not spectacular, stock appreciation.

The article Pick the Right Dividend Stocks With These 3 Winners originally appeared on Fool.com and is written by Adem Tahiri.

Adem Tahiri has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola and PepsiCo. The Motley Fool owns shares of PepsiCo.

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