Kimberly Clark Corp (NYSE:KMB)
Kimberly Clark Corp (NYSE:KMB) manufactures basic consumer products like diapers, tissues, feminine-care products and toilet paper among others. The company claims that nearly a quarter of the world’s population in more than 175 countries uses its products on a daily basis. With brands such as Kleenex, Scott, Huggies, Pull-Ups, Kotex and Depend, Kimberly Clark Corp (NYSE:KMB) holding No. 1 or No. 2 share positions in more than 80 countries.
The company is moving away from its less profitable business lines; management has decided to exit the bulk of its Western and Central European diaper business as well as some of its lower-margin consumer tissue operations. In terms of growth opportunities, Kimberly Clark Corp (NYSE:KMB) is betting on Latin America where rising income levels bode well for the company.
Kimberly Clark Corp (NYSE:KMB) has raised its dividend payments in each of the last 41 years, and the stock is currently paying a 3.4% dividend yield.The dividend payout ratio is in the area of 65%, not excessive but not leaving a lot much upside either. Kimberly Clark Corp (NYSE:KMB) increased its dividends by an impressive 9.5% in 2013, but investors should probably expect more moderate increases in the future as dividend growth converges toward a slower growth rate in earnings and cash flows.
Johnson & Johnson (NYSE:JNJ)
Johnson & Johnson (NYSE:JNJ) is a global giant benefiting from its leadership position in multiple areas and wide diversification across different business segments. The medical devices and diagnostics, pharmaceuticals and consumer products segments represent 41%, 38% and 21% of total revenues, respectively. Johnson & Johnson (NYSE:JNJ) makes approximately 70% of its revenues from No. 1 or No. 2 global leadership positions in its respective markets.
Like every company in the health care business, Johnson & Johnson (NYSE:JNJ) faces risks coming from regulatory factors and patent expirations. Furthermore, product recalls have been a problem for the company lately. On the other hand, an aging baby boomer generation is providing strong secular tailwinds for Johnson & Johnson (NYSE:JNJ), and the company has the fundamental strength to capitalize the opportunities that will emerge in the long term.
Johnson & Johnson (NYSE:JNJ) yields 3% in dividends, and the company has increased its payments over the last 51 consecutive years. The payout ratio is quite comfortable at less than 55% and Johnson & Johnson increased its dividends by a sustainable 8.2% in 2013.
The Coca-Cola Company (NYSE:KO)
The Coca-Cola Company (NYSE:KO) won the cola wars against PepsiCo, Inc. (NYSE:PEP) back in 2010 when Diet Coke took over the second position from Pepsi, giving The Coca-Cola Company (NYSE:KO) both the first and second place in the U.S. market with regular Coke and Diet Coke respectively. The company owns the most valuable brand in the world according to Interbrand, and its gigantic global distribution network provides a formidable competitive advantage versus smaller players in the industry.
Coke has been facing stagnant volume growth due to healthier consumer habits, especially in developed markets. But the company is expanding into healthier choices with products like Dasani water, Minute Maid juices and Powerade sports drinks in order to adapt to the new trend, and emerging markets still offer room for volume expansion due to rising income levels.
PepsiCo, Inc. (NYSE:PEP), which still owns an undisputed leadership position in the global snacks market through its Frito-Lay division, is following a similar strategy by promoting its Good-For-You portfolio consisting of a combination of tasty and nutritious products like its Tropicana, Quaker and Gatorade brands.
The Coca-Cola Company (NYSE:KO) and PepsiCo are among the most popular choices in the dividend investing community, and for solid reasons. While Pepsi has raised dividends in the last 41 consecutive years, Coke has an even longer track record of 51 consecutive years. Both companies pay similar yields in the area of 2.8% for Pepsi and 2.9% for Coke, but Pepsi has a lower payout ratio around 50% versus 55% for Coke. When it comes to dividend growth, Coke is ahead of Pepsi, though, in 2013 the company increased its dividend by 10% in 2013 versus a 6% increase for PepsiCo.
Both companies deserve their place among the most respected dividend names, but I would choose Coke over Pepsi due to its unquestionable leadership in drinks and remarkable competitive strengths.
Bottom line
The future is plagued with uncertainty; it always has been and always will be. But that doesn´t mean investors should try to avoid volatility by jumping in and out of the market based on their emotions. In case you are feeling concerned about what the future holds, or if you simply believe in buying companies with rock-solid competitive positions and an immaculate track record of dividend increases, these three indestructible stocks may be attractive alternatives for your portfolio.
The article 4 Rock Solid Dividend Stocks for Uncertain Times originally appeared on Fool.com and is written by Andrés Cardenal.
Andrés Cardenal has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola, Johnson & Johnson, Kimberly-Clark, PepsiCo, and Procter & Gamble. The Motley Fool owns shares of Johnson & Johnson and PepsiCo.
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