Hi, I'm Jimmy in this video, I'm going to walk through my top six dividend stocks from
the consumer staples sector.
This video is part of our passive income dividend series where our goal is to identify dividend
stocks from each sector that can help give us the passive income that could get us to
our goal of financial independence.
Okay.
So within the consumer staples sector, we're going to go through our top three dividend
stocks from the United States and our top three dividend stocks from Europe.
Now, stick around to the end of this video because at the end I got a handful of other
dividend stocks that almost made this list.
OK, so to make this list, we're looking for dividend stocks that have a minimum dividend
yield of at least 2 percent.
And ideally, we want those dividends to be in a position to grow in the coming years.
Then we're looking for companies that can afford to grow their dividend to identify
whether or not they can afford to pay their current dividend and ideally grow them.
We're looking for companies that have a higher dividend coverage ratio.
And just so we're all on the same page.
Dividend coverage ratio can be calculated by taking the earnings per share and dividing
that by the dividends per share.
The higher the dividend coverage ratio, the better it is for that company.
Okay, let's jump into our first U.S. dividend stock.
Our first company is PepsiCo, ticker symbol PEP Pepsi is a global food and beverage company.
They own brands like Cheetos, Doritos, Quaker Foods, Pepsi, Aquafina, Gatorade, and the
list goes on and on.
Pepsi has a current dividend yield of about 4 percent.
And we could see with their dividend history that they've done a fairly good job of growing
their dividend over the past few years.
When we had earnings per share to this chart, but we could see that earnings are growing
nicely.
And for now, it seems that Pepsi's dividend is well covered by their profits.
Okay.
Now let's jump across the pond over a Unilever ticker symbol UNA in Amsterdam.
ULV are in London.
And we can even pick it up in the US under ticker symbol UN.
Now Unilever manufactures consumer goods like detergents, personal care products.
They even have some foods.
They have a dividend yield of about 3 percent.
And as we could see with their dividend history, well, they've grown their dividend at a decent
pace over the past few years.
And it seems that analysts are expecting for those dividends to continue to grow.
By the way, the green bars, our analyst estimates when we add earnings per share to this chart,
while here we can see that profits are consistently covering the dividends that they pay.
So it seems that this is a fairly stable dividend.
Okay.
Now let's head back to the US for another defensive dividend stock in Colgate-Palmolive.
Ticker symbol CL.
Colgate-Palmolive sells products like toothbrushes, mouthwash, hand soap, dishwasher, soap, deodorants,
pet food.
And once again, the list goes on and on.
So they sell a lot of very traditional consumer staple products.
They have a dividend.
Give them back two and a half percent.
And as we could see with their dividend history, well, after they dropped their dividend after
the 2012 year, well, they've done a decent job of growing their dividend ever since then
when we had earnings per share to this chart where we can see why they dropped their dividend
back in 2013.
Since in 2012, earnings per share were a bit low relative to the amount of dividend they
paid.
Now they did cover their dividend 2012, but it did probably make sense for them to drop
that dividend amount to a much more manageable level.
And based on the gap that they currently are showing between earnings and dividends.
Well, I would expect that their dividend is fairly safe over the next couple of years.
And I don't think that we have to worry, at least not right now, about a potential dividend
drop.
Okay.
Now we head back to the London Exchange where we have alcohol producer Diageo ticker symbol
DGE diageo has a dividend yield of about two point two percent.
And as we could see with the dividend history, well, they've been fairly consistent over
the past few years, despite the fact that profits have not been quite as steady, although
they have consistently covered their dividends, which I think is a good thing overall for
the sustainability of their dividend.
Now, this is another one of those traditional consumer staple companies that I think are
likely to do well despite what the economy may do.
Okay.
Now we go back to the US where we have the pharmacy and retail operator, the Walgreens
Boots Alliance, ticker symbol WBA.
Walgreens has a dividend yield of a bit over 3 percent.
And when we look at their dividend history, what we can see, it's been quite consistent.
And what's interesting about them is that when we add earnings per share to this mix,
well, it seems that Walgreens dividend has a ton of room to work with, which could eventually
lead to an increase in their dividend, maybe a special dividend, or perhaps they increase
their dividend at a faster pace.
Or maybe the company just keeps the cash and maybe they use that to fuel their growth or
perhaps strengthen their balance sheet.
Any one of those scenarios could be a good thing for dividend investors who buy the shares
of a defensive company like this as a holding.
Eventually, they could get some capital gains while getting their dividend.
Okay, now we head back to the London Exchange for the British American Tobacco Company Ticker
symbol BATS.
Now BATS has a dividend of almost 7 percent.
This is another one of those traditional consumer staple companies.
And as we can see with their dividend history, well, their dividend history has been quite
consistent.
When we add earnings per share to this, well, it looks like earnings per share is doing
enough to maintain their almost 7 percent dividend yield.
So this is likely a good thing for this company.
Okay.
Now for some other dividend stocks from the consumer staples sector for us to consider.
Now, this sector is actually loaded with good dividend payers, companies like Kimberly-Clark
or Coca-Cola.
Both have a dividend yield of about 3 percent.
Then companies like all is up at 7 percent.
Procter and Gamble has about a two and a half percent dividend yield.
These are all solid, reliable dividend payers.
And frankly, these are left off this list only because there were so many to choose
from.
I could have easily made this a top 10 dividend stock list.
So if you know any other good ones that belong in this list, please put them in the comments
below.
And the thing I like about this industry is that this is a good place to hide if we're
afraid of a stock market pullback.
And given where the stock market currently is, how long it's been on a bull run.
Well, some of us may be looking for a good place to hide.
Now, if you're curious about the likelihood of a stock market pullback, I actually do
a monthly series where we look at different economic indicators to try to gage the overall
likelihood of a stock market crash.
I've got a link right here to the playlist.
I've also got a link to the playlist in the description below.
So if you're interested in looking at some macroeconomic factors that help drive the
economy, that could be a good next video to watch.
Besides that.
Thank you so much for stick with me all the way into the video.
I really appreciate it.
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Thank you.
And I look forward to seeing the next video.