3 Consumer Goods Dividend Stars

Recently, Morningstar released the top 10 dividend-yielding stocks from its ultimate stock pickers, featuring 10 businesses in stable industries that offer more certainty regarding their cash flow generating abilities. In the list of those 10 stocks, there are three giant consumer-goods players: Philip Morris International (NYSE: PM  ) , Unilever (NYSE: UN  ) and McDonald's (NYSE: MCD  ) .

Philip Morris' huge cash return to shareholders
Philip Morris has many characteristics that appeal to income investors. For instance, the company has achieved fantastic consumer loyalty with its Marlboro brand, which has a 28.8% market share of the overall international cigarette market. However, Philip Morris does not stop there. The company has reinforced its market-leading positions in many countries with a gain of 3.3 share points since 2008. Furthermore, it looks forward to growing organically through different business development activities, tapping into the $770 billion cigarette market. 

Investors might like the fact that Philip Morris returns cash to shareholders via both dividends and share repurchases. Since its spin-off from Altria, Philip Morris has bought back 539 million shares, accounting for 26% of its total shares outstanding at that time, and returned $32.4 billion to shareholders via share repurchases.  It expects to complete its current $18 billion repurchase program during 2015, which will give investors more than a 13% buyback yield. At the current price, Philip Morris investors can also get a juicy dividend yield of 4.10%.

Unilever's exposure to emerging markets
Unilever is considered one of the strongest consumer-defensive companies in the world. By investing in Unilever, we can indirectly benefit from the rapidly growing emerging markets. Although emerging market growth has slowed down somewhat, Unilever CEO Paul Polman commented that this was quite normal as any road to future development will have some bumps. However, Unilever has beaten its competitors in terms of growth. While Unilever's home and personal care segments enjoyed decent growth of 6%, competitors reported 1%-4% growth.

One of the most important emerging markets for Unilever is India. The company believes that if it can successfully tap into the rural Indian market, its volume could increase by six times. To fully capture that growth opportunity in India, Unilever has increased its stake in Hindustan Unilever to 67%. Currently, Unilever gives investors a sweet dividend yield of 3.40%.

McDonald's long-term dividend payment history
McDonald's is the largest quick-service restaurant in the world, serving more than 69 million customers in more than 100 countries at over 35,000 locations. However, many consumers have complained that McDonald's menu complexity has reduced its service speed and quality. The company recognizes that problem and it is ready to fix it. It has begun to focus on kitchen improvements to provide better service and customization for customers. For instance, McDonald's recently launched a new upscale "build-your-own burgers" concept. To improve kitchen efficiency, McDonald's targets having high-density prep tables at more than 14,000 U.S. locations by 2014. 

McDonald's has always been a consistent dividend-paying stock, and has paid uninterrupted and increasing dividends since 1976. At the current trading price of $95.90 per share, McDonald's offers investors a sweet dividend yield of 3.30%. Combined with its share-repurchase activities, McDonald's expects to return a total amount of $4.5-$5 billion to investors in 2013, giving investors a total yield of 4.7%-5.2%. 

My Foolish take
With their global-leading positions and nice dividend yields, these three consumer goods giants could be great stocks for income investors for the long run. Although these three stocks may experience temporary price contractions, I personally believe that they can ultimately deliver decent long-term results for investors. 

Want to learn about other solid dividend-paying companies
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