In this article, we discuss the 5 consumer stocks that pay dividends. In order to read our detailed analysis of these dividend stocks, go directly to 10 Consumer Stocks that Pay Dividends.
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.
