Best Dividend Stocks: Consumer Goods Market

Investopedia defines consumer goods sector as companies that are engaged in the business of items purchased directly by individuals rather than by manufacturers and industries. The sector includes food production companies, clothing chains, beverages, automobiles, fashion, and electronics. Broadly speaking, these industries are directly related to the spending power of end consumer and the growth in this market segment is highly correlated with the GDP growth and Purchasing Power growth of consumers. While industries like food production, clothing, beverages are tied to “essential” goods; automobiles, fashion are tied to “luxurious” goods. Electronics can be places somewhere in the middle of the two categories as high-end electronics (such as 700$ price tag Apple iPhone) is more of a luxury item, while a 250$ Asus Zenfone-2 is a phone which has similar features as that of iphone but possibly at reduced performance and brand name.

The industry tied to “essential goods” is generally stable over long term and show substantial growth as well. This industry is also most immune to economic recessions as people won’t simply stop eating basic food or wearing basic clothes in a down economy. Moreover, there are behemoth sized retail chains in these sectors, which provide consistent cash flow needed for future growth. As such, it became a good idea to invest in this industry if the stock has good dividend payout and stock prices are at low of the seasonal cycles. Based on these factors, my research indicate the following stocks to be a winner for stocks with good dividend payout in “essential consumer goods” category

Company name	Stock Ticker	Dividend over last 12 months*	Average annualized dividend over last 5 years*	Stock price range* (last 1 year)	Stock price range* (last 5 years)	Current stock price	Expected Payout ratio (based on recent prices)
McDonald Corporation	MCD	3.40	3.00	87.62-101.99	72-104	97.87	3.47%
Proctor & Gamble	PG	2.58	2.40	77.10-93.89	59.83-93.89	82.30	3.14%
Kellogg  Company	K	1.96	1.80	58.83-69.89	47.19-69.89	64.50	3.03%
The Coca Cola Company	KO	1.27	1.13	39.06-45	31.10-45	41.48	3.00%
Johnson & Johnson	JNJ	2.85	2.64	95.10-109.49	58.98-109.49	101.11	2.81%
Wal Mart	WMT	1.94	1.76	70.36-90.97	50.85-90.97	73.84	2.65%

*All amounts are in USD

While some stocks in the above list are not in the low of their 52 week cycle (e.g., MCD, JNJ), given their undisputed market dominance over the last few years makes them a good investment candidates for growth and dividends.

Disclosure: I don’t have any position in the above mentioned stocks, and don’t plan to initiate one in the next 72 hours.