Those who remember the market's behavior in the aftermath of the Great Recession will recall the tendency of investors to go "risk on" or "risk off" based largely on sentiment. It seems that volatile environment is returning to Wall Street. "Risk on" are typically fast-growing but less stable investments like those in the tech sector. They may deliver nice gains when things go well but can hurt badly when things go south. Meanwhile, "risk off" investments offer stability in any environment and will protect your nest egg. And there are perhaps no investments more stable than food-related stocks that pay a generous dividend. People buy groceries regardless of economic indicators, and that means profits to fund dividends. Here are nine to consider.
Archer Daniels Midland Co.
Though you may not think much of the ADM brand (ADM), perhaps only seeing it in passing on cookies or a loaf of bread at the grocery store, it is one of the largest agricultural players with a roughly $25 billion market cap built largely around storage, processing and sale of raw commodities such as corn and wheat. As a wholesaler of these key items, ADM is a vital part of the supply chain as it provides feed for cattle, sugar and corn syrup to confectioners and grain to bakers. Collectively, all these revenue streams add up to a whopping $66 billion or so in annual sales and power a reliable dividend for shareholders.
Current yield: 3.2%
Not familiar with Brazil-based beverage company Ambev (ABEV)? Well, you should be. This company is valued at more than $60 billion in market capitalization thanks to a wide-ranging operation across a host of products and a massive swath of Latin America. Its business includes licensing deals that allow it to sell big brands like Gatorade and Budweiser in addition to local products such as bottled water and juices. With a growing middle class across South America, tastes are changing and American brands have a lot of runway ahead. Rather than dilute your investment around the globe, ABEV stock is a great way to play this regional market more directly and get a decent dividend in the process.
Current yield: 3.2%
Flowers Foods (FLO) is a bakery that creates just about anything that comes out of an oven, including bread, tortillas and cakes. Its top brands include the iconic Wonder bread line as well as Tastykake snacks and Nature's Own whole grain products. Through 39 bakeries and a massive distribution network, FLO is a nationwide operation that places products at big and small stores alike as well as via food service clients. There's admittedly not huge growth ahead in the bread biz. But thanks to a loyal customer base and big reach, FLO stock is a relatively stable investment that offers dividends you can feast on for years to come.
Current yield: 3.4%
Another name that offers incredible reliability is grocery store mainstay General Mills (GIS). It may not be as dynamic as a technology stock, but you can bet that the Cheerios and Pillsbury brands will be around for years to come. That is precisely the kind of long-term stability that dividend investors should seek. GIS isn't asleep at the wheel, however. The company has looked beyond its legacy brands including expansion into healthier, organic foods in the last several years. A big part of that was the 2014 acquisition of Annie's, known for its bunny-branded mac and cheese. However, a continual flow of new products since then ensures General Mills won't fall behind even as consumer tastes change.
Current yield: 3.7%
J.M. Smucker Co.
Smucker (SJM) is best known for jams and jellies, but the parent company spans a host of other consumer products including Folgers coffee, Meow Mix cat food and Jif peanut butter. This diversification across business lines helps provide for consistent performance and support a steadily growing dividend. Just look at the numbers: SJM's dividend has soared from 35 cents a quarter at the end of 2010 to 88 cents presently – a massive increase of more than 150% in roughly a decade. That generous approach to dividends should make income investors very happy.
Current yield: 3.2%
Not to be overlooked is fellow grocery store giant Kellogg (K), which boasts brands including Cheez-It crackers, Rice Krispies cereal, Pop-Tarts pastries and Eggo waffles. The company is valued at more than $20 billion and has a worldwide reach that expands far beyond where you go shopping each week to fill your own cupboard. Dividend investors love deeply entrenched stocks like this. With operations in more than 180 countries and dozens of top brands, Kellogg isn't reliant on a single product or division. That diversification allows for consistent revenue and consistent payouts.
Current yield: 3.4%
Kraft Heinz Co.
The 2015 merger between Kraft and Heinz (KHC) created one of the largest food companies in the world. But as happens with so many big deals, the mashed-up company struggled to find its way in the immediate aftermath. Everything came to a head about a year ago when the company revealed a disappointing sales outlook for the foreseeable future and KHC shares crashed about 25% in a few trading days. But the dust has settled since then, and while this foods giant isn't quite as dominant as it once was, it remains stable with popular products including Kraft Mac and Cheese, Capri Sun beverages, Heinz ketchup and many others. Growth may be challenged, but the huge dividend is a nice hedge against future declines.
Current yield: 5.8% `
Molson Coors Brewing Co.
One of the largest beer brewers in the world, TAP (TAP) owns brands that include (obviously) Molson and Coors beverage lines as well as Miller, Milwaukee's Best, Blue Moon and Leinenkugel's. With global operations and a deep portfolio, it's safe to say that as long as people are drinking beer, this stock will be in favor. There is also a strong history of dividend growth at this stock. Payouts have roughly doubled in the last decade, but the current TAP dividend is only about two-thirds of total earnings per share. That means this beer brewer has the potential to raise its dividend even more in the years ahead.
Current yield: 4.1%
Unilever (UL) proves that global consumer brands don't have to originate in America in order to become dominant. While some products are admittedly more European in focus, items that include Breyer's ice cream, Hellmann's mayonnaise and Lipton teas hit very close to home. And like other international players on this list, Unilever is attractive precisely because of these wide-ranging operations. It's not easy to disrupt a company with a strong brand presence in one market, but the global footprint of UL makes it pretty unshakable. That adds up to reliable dividend payments to shareholders.
Current yield: 3%
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