Latest news with #DividendKings
Yahoo
a day ago
- Business
- Yahoo
The Smartest Growth Stock to Buy With $1,000 Right Now
Consumer staples makers have long been able to grow their businesses through good and bad economic times. Some of the best consumer staples stocks are Dividend Kings. One consumer staple Dividend King has a good yield and attractive valuation. 10 stocks we like better than Coca-Cola › Quick, think about soda companies. What brand comes to mind? Probably Coca-Cola (NYSE: KO). That makes sense, given that Coca-Cola is one of the largest and best-known consumer staples brands in the world. But is it the smartest growth stock to buy if you have $1,000 to invest right now? Don't hit the buy button until you read about this high-yield alternative. From a big-picture perspective, Coca-Cola makes food, even though its products get their own category with the consumer staples space. Beverages are still a life necessity, even if its eponymous product is more for pleasure than need. The company is an industry powerhouse. Not only is Coke one of the best known, and most beloved, beverage brands, but Coca-Cola happens to have a massive distribution network, impressive marketing skills, and powerful research and development chops. The company's scale, meanwhile, gives it the wherewithal to act as an industry consolidator, buying up smaller brands and beverage concepts to round out its product portfolio. That, in turn, helps to keep Coca-Cola's brands relevant with consumers. The company's business is so strong that it has been a longtime holding of Warren Buffett within Berkshire Hathaway's stock portfolio. If Buffett has put billions into Coca-Cola, why shouldn't you put in $1,000? There's one notable reason: Investors have fully priced Coca-Cola's shares. The stock's price-to-sales ratio and its price-to-earnings ratio are both above their five-year averages, and the dividend yield is near 10-year lows. The business is doing relatively well right now, but virtually everyone seems to know it. One of the other factors that sets Coca-Cola apart is its status as a Dividend King. But it isn't the only Dividend King beverage company. Direct competitor PepsiCo (NASDAQ: PEP) has increased its dividend annually for 53 years and counting. Meanwhile, PepsiCo's price-to-sales and price-to-earnings ratios are below their five-year averages, and its yield is toward the high end of its historical range. So, unlike Coca-Cola, PepsiCo looks cheap. PepsiCo stands out on the valuation front, but it also stands out on the diversification front. Like Coca-Cola, it has a globally diversified business. But PepsiCo operates in the salty snack and packaged foods spaces, too. That gives it more levers to pull to support long-term growth and more businesses to lean on when one of its divisions is facing difficulty. And make no mistake, every company, no matter how good, eventually faces hard times. The best companies, which include Dividend Kings, are the ones that successfully manage through the hard times. While Coca-Cola is performing quite well today, PepsiCo isn't. That's why its yield is a historically high 4.3% and its stock price has lost a third of its value since early 2023. But PepsiCo isn't giving up. In fact, it is leaning on its successful playbook and buying smaller brands (Siete and Poppi) that are more relevant with consumers right now. That should, in time, help PepsiCo to get back on the growth track. If you're looking at Coca-Cola today, you should probably give PepsiCo a closer look. But don't just think about how each business is performing this very second. Think about their valuations in relation to their performance and, just as important, what each company is doing to ensure they succeed. They both have solid businesses and are working on a bright future, but PepsiCo isn't getting any credit for it because it is facing some near-term headwinds. If you can think long term, putting $1,000 into PepsiCo today could end up being a huge win for your future wealth. Note that one of the keys to Buffett's investment approach is buying good companies when they look attractively priced. Between Coca-Cola and PepsiCo, it is PepsiCo that passes that simple screen. Before you buy stock in Coca-Cola, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Coca-Cola wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $660,341!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $874,192!* Now, it's worth noting Stock Advisor's total average return is 999% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Reuben Gregg Brewer has positions in PepsiCo. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy. The Smartest Growth Stock to Buy With $1,000 Right Now was originally published by The Motley Fool
Yahoo
04-06-2025
- Business
- Yahoo
1 Unstoppable Dividend Growth Stock That's Soaring Past the S&P 500
Coca-Cola stock has been outperforming the S&P 500 this year, by a wide margin. Not only is it a safe haven type of investment, but it also pays a great dividend. The company's elevated valuation, however, may be turning some investors off right now. 10 stocks we like better than Coca-Cola › After a tough start to 2025, the S&P 500 index has been rallying in recent weeks, and it is getting back to around all-time highs. Concerns around the economy, tariffs, and trade wars appear to be easing in the markets, as investors remain bullish on the outlook for the future. But despite this, the S&P's gains this year are still around zero. It hasn't been an awful performance, but it also hasn't been strong, either. One stock that has dwarfed the market is one that may surprise you. It is, after all, known for being more of a safe dividend growth stock to own rather than a high-powered investment with loads of upside. The stock I'm talking about is that of soft drink and beverage giant Coca-Cola (NYSE: KO). Its shares are up around 15% in 2025. Could even more gains be likely for the stock this year, and is this an investment you should consider adding to your portfolio today? A big reason investors flock to Coca-Cola's stock is for its ability to withstand adversity. As a global company, it has a vast distribution network and flexible operations, which can help it minimize the effects of tariffs and trade wars. The company, for example, is looking at using more plastic in its U.S. operations as a possible way to avoid tariffs on steel and aluminum imports. And while consumers may scale back on discretionary expenditures amid more challenging economic conditions, Coca-Cola's products are still relatively modestly priced compared to other food items. Demand doesn't appear to be falling significantly. In the company's most recent quarter, which ended March 28, Coca-Cola reported a 2% decline in sales, but its organic growth rate, which excludes the impact of foreign exchange, was strong, coming in at 6%. Coca-Cola's organic growth rate was positive across all of its segments during the quarter. That stability and consistency can make the beverage stock a popular buy for investors, especially at a time when finding safe investments may prove to be challenging. Another reason investors may be loading up on Coca-Cola's stock is for its dividend. It yields 2.8%, which is more than twice what the average S&P 500 stock pays (1.3%). That dividend income can provide some recurring cash flow and boost your overall returns from the stock. In the past five years, the stock has risen by 52%. But when you factor in its dividend, its total returns are far higher at close to 80%. Coca-Cola's dividend income is also likely to rise in the future. It belongs to an exclusive club, Dividend Kings, which have been raising their payouts for 50-plus years. In February, the company announced its most recent increase, which was 5.2%, and which extended its streak to 63 years. Over the past five years, the stock's dividend has risen by 24%. Coca-Cola can be a good dividend stock to own over the long haul. The business has solid fundamentals, and its iconic brand gives it a tremendous competitive advantage. The only thing I don't like about the stock right now is its valuation -- it trades at 29 times its trailing earnings. In the long run, you're still likely to generate a great return from the stock, especially when you factor in its dividend. But with an elevated valuation, its gains over the short term may be a bit light given how strong its performance has been out of the gate in 2025. If your priority is dividend income and you're planning to hold for years, then Coca-Cola can still be a solid investment. But you may want to temper your expectations, at least in the short term. Before you buy stock in Coca-Cola, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Coca-Cola wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $657,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $842,015!* Now, it's worth noting Stock Advisor's total average return is 987% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 David Jagielski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 1 Unstoppable Dividend Growth Stock That's Soaring Past the S&P 500 was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
25-05-2025
- Business
- Yahoo
Investing for Passive Income? Here's What History Says About the Stability of Dividend King Stocks.
Passive income limits your losses in tough market times and offers an extra boost in better market environments. Certain companies, Dividend Kings, have made a long-term commitment to rewarding shareholders. These 10 stocks could mint the next wave of millionaires › When we think of stock market investing, we often think of choosing stocks we hope will soar, and that's definitely a huge part of this exciting and generally rewarding activity. But it isn't the only way to win in the stock market. You may also significantly grow your wealth by collecting passive income. The great thing about this is that you can pocket these payments regardless of the overall market's performance -- or even the dividend-paying stock's performance. As you can imagine, holding dividend stocks during tough market times is particularly wise because it may significantly cushion your portfolio's performance. And during positive market environments, you'll be happy to collect this extra income. I think we all like automatic payments that require absolutely no effort. All this sounds great, but now you may wonder about the best way to capture this passive income. The key to that may be found in stocks known as Dividend Kings. In fact, history has something compelling to say about long-term investing in these players. Let's take a closer look. So, first, what are Dividend Kings? They're a group of stocks across industries that have raised their dividend payments for at least the past 50 consecutive years. Some of them have well surpassed that. For example, American States Water (NYSE: AWR) and Procter & Gamble (NYSE: PG) have lifted their payments for 70 years and 68 years, respectively. And you'll likely recognize many names in the Dividend Kings list, from healthcare giant Johnson & Johnson (NYSE: JNJ) to beverage powerhouse Coca-Cola (NYSE: KO). Investors often buy Dividend Kings because these companies have a long track record of not only paying dividends but also increasing them. This shows that rewarding shareholders is one of their priorities, so it would be surprising if they changed course and halted dividend increases or stopped paying dividends. Also, lifting a dividend for so many years is an achievement most of these companies highlight in their communications with investors, so they probably want to keep this accomplishment going. Importantly, companies that have been able to boost their dividends for so many years are in a financial situation to do so. This supports the idea of continued dividend growth and should offer us confidence about the company's general earnings strength and future prospects. All these points together add to the evidence that these companies will likely keep increasing their dividends and have what it takes to deliver earnings growth over the long run. But how does that equal investment returns? Let's look to history for examples of how this has turned out for long-term investors. We'll consider the four stocks I mentioned above and look at how much you would have today if you'd invested $10,000 in each 10 years ago. The following chart includes stock performance and dividends. And the next chart shows only stock performance, illustrating that even though you would have gained, you clearly gained even more thanks to the dividend payments. So, dividend payments can make a big difference in your winnings over time -- and in certain cases, these payments can even protect you from declines. For example, if you'd invested $10,000 in Target (NYSE: TGT) a decade ago and don't include dividends, today you would have a little more than $11,000, considering the stock's lackluster performance in recent years. But if you include this Dividend King's dividends, your investment would be worth $16,000. This shows us that Dividend Kings are worth owning and that even tough times, such as those experienced by Target in recent years, are often smoothed out for long-term investors thanks to these payments. Of course, you can also find fantastic dividend players beyond the Dividend Kings list. Many stocks have a shorter track record of payments but are on their way to becoming dividend stocks you can count on. So, it's worth considering some of them, too. For example, pharma giant Pfizer, with its 7.4% dividend yield -- far surpassing the 1.2% dividend yield of the S&P 500 -- has recently said that a key part of its strategy is growing its dividend. If you're looking for a very secure source of passive income, history offers us a compelling message: You'll want to be sure that your dividend stocks portfolio includes at least a couple of Dividend Kings. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $340,468!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $37,070!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $639,271!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of May 19, 2025 Adria Cimino has positions in Target. The Motley Fool has positions in and recommends Target. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy. Investing for Passive Income? Here's What History Says About the Stability of Dividend King Stocks. was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
23-05-2025
- Business
- Globe and Mail
Prediction: PepsiCo's Dividend Yield Just Peaked at 4.4% Because the Dividend King Stock Is Too Cheap to Ignore
It's been a rough go of it for PepsiCo (NASDAQ: PEP) investors lately. The stock is hovering around a five-year low and is down over 27% in the past year. Despite the downward pressure on the stock price, Pepsi has continued to raise its dividend like clockwork. Earlier this month, it boosted its quarterly payout to $1.4225 per share or $5.69 per year -- marking the company's 53rd consecutive annual dividend increase. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Pepsi stock now sports a forward yield of 4.4% -- the highest ever. Here's why I think its yield just peaked and why the dividend stock is a no-brainer buy now. Pepsi's dividend yield is on the rise Pepsi is part of an elite group known as Dividend Kings -- companies that have increased their payouts for at least 50 consecutive years. The yield will increase when a company's stock price grows more slowly than its dividend. Whereas if a stock price goes up faster than the dividend growth rate, the yield will go down. In this vein, dividend yield can be misleading. A company can have a steadily growing and dedicated dividend program, but a low yield because the stock price does well. For example, Microsoft has increased its dividend every year for 15 consecutive years, and most of its recent raises have been about 10% per year. But its yield has gone down over time because the stock price has increased by several fold. In contrast, Pepsi's dividend yield has gone up because the company continues to boost its payout and its stock price has gone down. It wasn't long ago that Pepsi sported a yield of around 2% to 3%. But over the last five years, Pepsi has increased its dividend by 39%, but the stock price is flat -- pushing the yield to where it is today at a record high. I could see Pepsi's yield peaking here for the simple reason that its stock price will grow faster than its dividend growth rate, which should be about 5% to 7% per year based on the size of Pepsi's recent increases. A slowdown in consumer spending has impacted Pepsi Pepsi stock has fallen deeper and deeper into the bargain bin mostly because of sluggish sales growth and limited pricing power. Pepsi has a massively diversified business spanning beverages like flagship Pepsi and other soda brands, juices, water, sports drinks, energy drinks, and more. It also owns one of the largest snack brands in the world -- Frito-Lay -- and package food giant Quaker Oats. The company was hit hard by inflation and supply chain costs. It has been promoting value-added products to boost volumes while limiting price increases. However, consumer spending is tight, so Pepsi is facing a Catch-22. It either has to cut prices to boost volume or keep prices higher and sell fewer products. Both outcomes lead to sluggish growth. In terms of pricing power, Pepsi has proved arguably less elite than peers like Coca-Cola. However, that discrepancy is already reflected in Pepsi's valuation. Pepsi's valuation is beyond cheap Coke has higher margins than Pepsi due to its bottling partner network and pure-play focus on beverages. By contrast, Pepsi controls more of its operations and is more diversified. But historically, both stocks have fetched similar valuations -- as evidenced by their nearly identical five-year median price-to-earnings (P/E) ratios. Coke's P/E is above its five-year median, whereas Pepsi's is far below. However, Coke's forward P/E is well below the median, so the stock is still a good value. It's just that Pepsi has become too cheap to ignore. PEP PE Ratio (5y Median) data by YCharts It would be one thing if Pepsi's dividend were out of control and its balance sheet were riddled with debt -- but that's hardly the case. Pepsi's payout ratio is 78% at present. It's not great, as 50% to 75% is typically considered healthy. But it's not bad considering Pepsi is still raking in the free cash flow. Pepsi has a debt-to-capital (D/C) ratio of 72.5% compared to Coke's 65.2%. The higher the D/C ratio, the more a company relies on debt to finance its operations. So Pepsi is more dependent on debt than Coke, but its leverage is manageable. Pepsi has been taking on debt for the right reasons. The company has made several savvy acquisitions, including Sabra and Obela snack and dip products, Mexican-American food brand Siete Foods, and prebiotic soda brand Poppi. These acquisitions help diversify its food and drink lineup and cater to mini-meal and health-conscious consumers. A passive income powerhouse to buy on sale Pepsi's declining stock price showcases investor frustration with the company's lack of growth. However, long-term investors who care more about where a stock will be years from now than where it is today can capitalize on Pepsi's out-of-favor status by buying the stock at its dirt-cheap valuation and getting a record dividend yield in the process. If Pepsi shows signs of margin expansion and success with recent acquisitions, it wouldn't be surprising for the stock price to begin outpacing the dividend growth rate -- leading to a lower yield. However, that doesn't mean investors will get less passive income from buying the stock now. For example, buying Pepsi at the current price of about $130 per share and a dividend per share of $5.69 presents a forward yield of 4.4%. If Pepsi were to go up to $150 per share, investors buying the stock for $150 would only get a yield of 3.8%. But the yield on cost for investors buying the stock now would still be 4.4%. Add it all up, and Pepsi is a phenomenal opportunity for value investors looking for a stable source of passive income. Should you invest $1,000 in PepsiCo right now? Before you buy stock in PepsiCo, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and PepsiCo wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $620,719!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,511!* Now, it's worth noting Stock Advisor 's total average return is962% — a market-crushing outperformance compared to170%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Globe and Mail
20-05-2025
- Business
- Globe and Mail
Up 97% in 2 years, Is Walmart a No-Brainer Dividend King Stock to Buy Now?
Walmart (NYSE: WMT) stock nearly doubled in the last two years while the S&P 500 (SNPINDEX: ^GSPC) gained 43.3%. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » In addition to the impressive gains in the share price, Walmart has been making some monster dividend raises. Its latest boost increased the dividend by 13% -- marking the 52nd consecutive year that Walmart has bumped its payout. That streak makes Walmart one of 55 companies that have raised their payouts for at least 50 consecutive years -- known as Dividend Kings. Let's dive into Walmart's latest earnings report and how management is positioning the company amid tariff tensions and pressures on consumer spending to see if the Dividend King is a no-brainer buy now. Tariffs are hitting Walmart's bottom line (and customers' wallets) Walmart has improved its supply chain, which will help it cushion the blow from tariffs. On its latest earnings call, Walmart said that over two-thirds of what it sells in the U.S. is made, assembled, or grown in the U.S. and that, because it moves a lot of products, it can adjust quantities over time to navigate tariffs instead of stocking up on inventories and hoping they sell. But even with these advantages, Walmart can't offset all of the added costs from tariffs. Walmart CEO Doug McMillon said the following on the latest earnings call: "We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren't able to absorb all the pressure given the reality of narrow retail margins." In other words, Walmart is saying that if tariffs keep up, it will raise prices. But it remains to be seen how already strained consumers will respond to price hikes. The cloudy outlook is already reflected in Walmart's guidance. Full-year fiscal 2026 sales in constant currency are only expected to increase 3% to 4% year over year, adjusted operating income is expected to grow by 3.5% to 5.5%, and adjusted earnings per share (EPS) is expected to be $2.50 to $2.60 compared to $2.51 in fiscal 2025. The glass-half-full outlook on Walmart is that the slowing growth is OK, given that Walmart is coming off a record year, and therefore, the comps are tough. There's also a fair argument that even a little bit of growth is impressive, given the operating environment. But investors care more about where a company is headed than where it is today. And there are signs that the rally in Walmart stock may be getting overextended. A high-flying Dividend King Walmart's business model has never been better thanks to investments in e-commerce, new store openings, existing store renovations, the build-out of services, and its growing advertising segment. However, given macro challenges, the company is likely going to have a harder time sustaining the growth rate investors have grown accustomed to in recent years. And the stock is far from cheap, with a forward price-to-earnings (P/E) ratio of 38.5 based on the midpoint of its fiscal 2026 adjusted EPS guidance. Because Walmart is such a better company today than in years past, it definitely deserves a higher-than-historical valuation. But Walmart's 10-year median P/E is 27.4. So investors aren't just paying a little more for the stock, they are paying a lot more. And that premium is hard to justify given the challenges Walmart is facing. Although Walmart's last two dividend raises have been sizable, it only yields 1% because of how strong its stock price has been performing. That's lower than the S&P 500 average of 1.3%. So while investors are getting the track record of Walmart's decades of dividend increases, they aren't getting nearly the yield that can be obtained from other Dividend Kings. For example, Procter & Gamble yields 2.6%, Coca-Cola yields 2.8%, and PepsiCo yields an all-time high 4.4%. And all of those Dividend Kings sport valuations far lower than Walmart's. In no-man's-land Investors may be willing to take a lower yield for Walmart if it were growing quickly or if the valuation were dirt cheap. But Walmart is priced to perfection, and its growth has stalled. Ultra-risk-averse investors who aren't focused on passive income may still want to buy or hold Walmart because it's a business that can be counted on no matter what the economy is doing. But most folks are better off scooping up shares in other Dividend Kings or pivoting to tariff-resistant growth stocks. For example, Microsoft has a less expensive valuation than Walmart, is still growing at a solid rate, is tariff-resistant, and has a 0.7% yield. Add it all up, and it makes little sense for investors to put their hard-earned savings in Walmart at this valuation, given the alternatives. Should you invest $1,000 in Walmart right now? Before you buy stock in Walmart, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Walmart wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $642,582!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,879!* Now, it's worth noting Stock Advisor 's total average return is975% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. *Stock Advisor returns as of May 19, 2025 Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft and Walmart. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
