Barron’s has identified five consumer staple companies that offer investors attractive valuations and yield plus downside protection. Altria Group (MO), Walgreens Boots Alliance (WBA), Kraft Heinz (KHC), Conagra Brands (CAG) and Molson Coors Beverage (TAP) all come out of the Barron’s screening favorably. These stocks’ price-earnings valuation is under 15 (based on this year’s profit estimates from FactSet ) and are offering a yield of at least 3%.
Altria Group is the stand-out option and offers investors a 8.4% yield, the highest among the stocks in the Barron’s screen. The company, known for producing Marlboro cigarettes, is striving to transition to smokeless products and CEO, Billy Gifford has identified maintaining the dividend as a top priority. The stock has seen a minor decrease of 0.7% this year including dividends.
Walgreens Boots Alliance comes in second with a dividend yield of 5.4% with a year to date return of -3%. The company reported a profit of $1.16 in their most recent quarter though lower than the $1.59 of the year prior it was inline with consensus estimates. The company of the dividend aristocrats has a record of consistent dividend payouts with 47 consecutive years of dividend increases.
Kraft Heinz is offering a 4.2% yield with a -4.2% return for the year. The company has reduced their dividend in 2019 but have stated in investor presentations their commitment to maintain the current dividend while investing in the future.
Conagra Brand has a dividend yield from 3.5% with a year to date return of -2%. The company has a history of increasing their dividend every July and in their latest year ended in May; the company paid out about 50% of its earnings for dividends.
Molson Coors Beverage is offering a 3.2% yield with a 1.6% return since the start of this year. The company has been increasing their dividend levels twice since the reinstatement in 2021 and in the most recent earnings call; the company was committed to increasing the dividend levels “sustainably.”
Person Mentioned in original article:
Billy Gifford is the CEO of Altria Group, maker of Marlboro cigarettes. He has stated that maintaining the dividend was extremely important and is a top priority for investors and for the Altria Group. Gifford joined Altria in 2004 and served as the Chief Financial Officer from 2005 to 2018. In 2018 he was named the company CEO and has over 25 years of experience in both the public and private sector.
Company mentioned in original article:
Altria Group is a global producer of food, beverage and tobacco products. In addition to producing Marlboro cigarettes, the company owns Juul and other companies known for producing e-cigarettes. The company also has various investments in other companies, including a large investment in the Canadian cannabis company, Cronos Group. Despite experiencing secular declines in cigarette volumes, the company is working to transition to smokeless products and is committed to maintaining their dividend to shareholders.
