Early Retirement Portfolio: 10 Stocks to Live Off Dividends

4. The J. M. Smucker Company (NYSE:SJM)

Dividend Yield as of January 6: 3.90%

The J. M. Smucker Company (NYSE:SJM) ranks fourth on our list of the best dividend stocks for an early retirement portfolio. The American food company manufactures a wide range of food and beverage products. In fiscal Q2 2025, the company posted revenue of $2.27 billion, reflecting a 17% increase compared to the same period last year. The revenue surpassed analysts’ expectations by more than $6.2 million. The company’s gross profit reached over $886 million, marking a 22% year-over-year growth.

Middle Coast Investing highlighted strengths in the company’s business in its Q2 2024 investor letter. Here is what the firm said:

“The J. M. Smucker Company (NYSE:SJM), like Lululemon, is an S&P 500 component and one of the worst 70 or so stocks in the S&P 500 this year. The maker of Jif, Smuckers jams, Uncrustables, Folgers Coffee, and Dunkin Coffee pods has had a bad 10 months since announcing its purchase of Hostess Brands (Twinkies, Hostess Cupcakes, etc.). Hostess was expensive and exposes J.M. Smucker to the risk that the new weight-loss drugs suppress diehard consumers’ appetite for sweets.

I think J.M. Smucker shares have suffered enough, and are at a point where a buy should work. The company is producing ample free cash flow to cover its likely to grow ~4% dividend while also paying down debt, which will improve both its profitability and its stock value. J.M. Smucker’s products and brands are leaders, including Hostess. I don’t think this will be a huge winner, but I do think there’s relatively safe upside here. I should note that another of my idea sources, Thomas Lott, mentioned SJM on Cash Flow Compounders; I had already been looking at the company for a while, but it’s always good to see a smart investor following it.”

The J. M. Smucker Company (NYSE:SJM) has demonstrated strong cash flow generation, enabling it to consistently pay dividends to shareholders. In the latest quarter, its operating cash flow reached $404.2 million, up from $177 million in the same period last year. The company’s free cash flow also grew significantly to $317.2 million, compared to $28.2 million in the prior year.

Currently, The J. M. Smucker Company (NYSE:SJM) pays a quarterly dividend of $1.08 per share, which was increased by 2% in July of this year. With 23 consecutive years of dividend growth, SJM is a reliable option for retirees. The stock’s dividend yield on January 6 came in at 3.90%.

According to Insider Monkey’s database of Q3 2024, 30 hedge funds held stakes in The J. M. Smucker Company (NYSE:SJM), compared with 34 in the previous quarter. The consolidated value of these stakes is more than $834.5 million. With over 1.6 million shares, Ariel Investments was the company’s largest stakeholder in Q3.