PepsiCo, Inc. (NYSE:PEP)
PepsiCo is the world leader in salty snacks and a strong number two in soda. With a recent yield around 3%, it should interest investors seeking a safe haven. Coca-Cola (K) would be a viable alternative, but it doesn’t have the same diversification as it only sells drinks. PepsiCo is a solid company with an impressive history of annual dividend increases. However, the nice thing about the company’s products, both snacks and drinks, is that people view them as acceptable indulgences. Sales will go down if there is an economic slowdown, but the company is in no danger of going out of business. Moreover, like McDonald’s, PepsiCo is expanding overseas, providing an additional level of diversification to its business.
The Procter & Gamble Company (NYSE:PG)
Procter & Gamble is a brand powerhouse, selling everything from batteries to laundry detergent, and a whole lot in-between. Its brands tend to be higher end, which exposes it more than some of its competitors to economic weakness. That’s a negative, but the company’s financial strength and massive size give it a lot of wiggle room to switch things up. It is also one of the most research driven consumer product companies around, creating not only new products but also entirely new categories of products. A recent yield over 3% makes this perennial dividend increaser well worth your consideration. And, it is moving into foreign markets where it sees the potential for increasing demand. Some missteps in this effort have taken a toll on performance lately, but when you are as large as P&G, you can afford to make a few mistakes and keep going.
Wal-Mart Stores, Inc. (NYSE:WMT)
Wal-Mart is the king of cheap. While it gets low marks for store its experience and frequently gets accused of treating its employees poorly, its low prices keep people coming in the doors. Of course low prices alone aren’t enough, which is where Wal-Mart really shines. It is so large that it can, and often does, get major pricing concessions from its suppliers. This allows the store to sell good quality products at some of the lowest prices around. If there’s any kind of economic problem, people still need to buy the things they need. Doing so at the cheapest prices possible should be a boon to Wal-Mart’s already strong sales profile. Like the others on the list, the company is expanding abroad. So, with a recent yield of around 2.3% it isn’t the most enticing on the dividend front, despite a long history of dividend increases. However, it is one of the best run retailers and it will likely benefit from financial weakness, making it worth the price of admission.
Safety First
You can’t sit on the sidelines in the investing world, particularly if you are trying to live off of your dividends. So there are risks that have to be taken. Still, the United States has a number of really big problems. Putting at least a portion of your portfolio into “safety first” names can help you sleep better at night while you watch our can kicking politicians avoid doing the heavy lifting they should be doing. The above names are all great options.
Yours,
The article Politicians Kick The Can, Investors Should Focus On Safety originally appeared on Fool.com and is written by Reuben Gregg Brewer.
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