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Consumer staples makers sell products that are bought regularly in both good times and bad.
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Dividend Kings have a proven track record of increasing their dividends annually.
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There’s an elite group of stocks that are both consumer staples makers and Dividend Kings.
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10 stocks we like better than Coca-Cola ›
Most retired dividend investors want to find reliable dividend stocks. That’s actually not as hard as it sounds, though you may have to give up a little yield to get the best of the best into your portfolio.
What are the best of the best?
Coca-Cola (NYSE: KO) and Walmart (NYSE: WMT) fit the bill. Here’s how you know which ones to buy and when.
The list of Dividend Kings is a favorite among dividend investors because each of the companies on the list has increased its dividend annually for at least five decades. It requires a strong business model that gets executed well in both good times and bad to achieve a record like that. And the record is clear proof that a company places a high importance on returning value to investors via a progressive dividend payment.
But there are a lot of different Dividend Kings. You can focus even more on reliable dividend stocks if you stick to companies that operate reliable businesses. One of the most reliable sectors out there is the consumer staples sector. These companies sell modestly priced items that are bought in both good economic times and bad ones. They are often selling necessities, like food and toiletries.
It shouldn’t be surprising that there are a bunch of consumer staples stocks that are also Dividend Kings. But you don’t want to buy willy nilly, you’ll want to ensure you are getting a good price.
Coca-Cola is a reliable dividend stock that appears desirable today. It is one of the largest consumer staples companies on the planet, has an industry-leading position in beverages, and looks reasonably priced right now.
The value side of the equation is highlighted by Coca-Cola’s price-to-sales and price-to-earnings ratios being near or slightly below their five-year averages. To be fair, the stock isn’t a deep value play, but a fair price for a great company is still quite attractive.
Oh, and the dividend yield is 2.9%, which is more than double the market’s 1.2% yield.
Walmart is another giant consumer staples company, with the giant retailer selling all of the basic necessities of life. It works with companies like Coca-Cola, helping get consumer staples products to the consumers that use them.