How to Build a Solid Foundation of Dividend Stocks

Some of the most well known blue chip dividend stocks are found in the Consumer Staples sector. Companies from this sector produce goods that are considered essential to people. Food, beverages, and household items are products from this sector that people are unwilling to cut out of their budget – despite how the economy is performing.

Consumer Staples stocks are generally considered to be safe investments that offer slow and steady growth and are non-cyclical. Since the products sold by these companies are always in demand, these stocks are not as impacted by the economy compared to others. This is one of the reasons why so many companies from this sector have such a strong dividend history.

Here are five Consumer Staple stocks that I currently own in the Money Sprout Index, which all have a solid dividend history.

The Clorox Company – CLX

The Clorox Company manufactures and markets products worldwide for both consumer and professional customers. This Dividend Aristocrat has consistently raised dividends for the past 36+ years and trades under the ticker symbol CLX. Some of the company’s most well known products include household names like Formula 409, the Clorox brand, and Liquid-Plumr to name a few.

CLX – Dividend Statistics

  • Consecutive Years of Dividend Increases – 36
  • Dividend Yield – 3.25%
  • Payout Ratio – 66.20%
  • Price to Earnings (TTM) – 20.34
  • 5 Year Dividend Growth Rate – 9.4%
  • 10 Year Dividend Growth Rate – 10.7%

Disclosure – I am actively investing in shares of CLX each month through they company’s direct stock purchase plan.

Coca-Cola Company – KO

The Coca-Cola Company manufactures, markets, and sells nonalcoholic beverages worldwide. The company is a member of the Dividend Aristocrat index and has consistently raised dividends for the past 52+ years. Coca-Cola Company trades under the ticker symbol KO.

KO – Dividend Statistics

  • Consecutive Years of Dividend Increases – 52
  • Dividend Yield – 3.19%
  • Payout Ratio – 64.21%
  • Price to Earnings (TTM) – 20.13
  • 5 Year Dividend Growth Rate – 8.1%
  • 10 Year Dividend Growth Rate – 9.8%

Disclosure – I am actively investing in shares of KO each month through an automated monthly investment plan through LOYAL3.

Procter & Gamble – PG

The Procter & Gamble Company manufactures and sells branded consumer packaged goods. As a member of the Dividend Aristocrat Index, the company has consistently raised dividends for the past 57+ years. The company trades under the ticker symbol PG.

PG – Dividend Statistics

  • Consecutive Years of Dividend Increases – 57
  • Dividend Yield – 3.06%
  • Payout Ratio – 65.03%
  • Price to Earnings (TTM) – 21.26
  • 5 Year Dividend Growth Rate – 8.8%
  • 10 Year Dividend Growth Rate – 10.6%

Disclosure – I am NOT actively buying shares of PG at this time but continue to hold existing shares in my portfolio.

Sysco Corp – SYY

Sysco Corporation markets and distributes a wide range of food and related products to the food service industry. The company has consistently raised dividends for the past 44+ years and is a member of the Dividend Aristocrat Index. Sysco Corporation trades under the SYY ticker symbol.

SYY – Dividend Statistics

  • Consecutive Years of Dividend Increases – 44
  • Dividend Yield – 3.22%
  • Payout Ratio – 70.30%
  • Price to Earnings (TTM) – 21.84
  • 5 Year Dividend Growth Rate – 4.9%
  • 10 Year Dividend Growth Rate – 9.8%

Disclosure – I am NOT actively buying shares of SYY at this time but continue to hold existing shares in my portfolio.

Wal-Mart Stores – WMT

Wal-Mart Stores operates retail stores worldwide, which include super centers and warehouse clubs. The company has consistently raised dividends for the past 41+ years and can be found on the Dividend Aristocrat Index. Wal-Mart trades under the WMT ticker symbol.

WMT – Dividend Statistics

  • Consecutive Years of Dividend Increases – 41
  • Dividend Yield – 2.57%
  • Payout Ratio – 39.59%
  • Price to Earnings (TTM) – 15.40
  • 5 Year Dividend Growth Rate – 14.2%
  • 10 Year Dividend Growth Rate – 18.0%

Disclosure – I am actively investing in shares of WMT each month through an automated monthly investment plan through LOYAL3.

Final Thoughts

For dividend investors who are just starting to build their portfolio, the Consumer Staples sector is a great place to look for well managed companies. Of the 106 companies listed on the Dividend Champions list, 17 of them are from this sector.

Investing in Consumer Staples stocks has helped me build a solid foundation for my dividend portfolio. As I branch out into other sectors, my Consumer Staples stocks will continue to provide stability in my portfolio.

Note – Dividend Champions are stocks traded in the U.S. and have consistently raised dividends for 25+ years.

For a complete list of the stocks listed above and more, check out the Dividend Champions list – The DRiP investing Resource Center.

Do you own stocks in the Consumer Staples sector? Which ones are you buying, holding, or selling?

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