The best dividend stocks can put cash in your pocket quarter after quarter, year after year. This is true even in the current coronavirus-driven bear market. The key, however, is to be able to identify high-quality companies that are likely to see rising demand for their products both during the COVID-19 crisis and thereafter.
Here are two great businesses whose products are helping people safely get through the pandemic -- and whose stocks are likely to reward investors with reliable and bountiful dividends for many years to come.
1. The soup maker
Canned soup is perhaps the ultimate survival food during a pandemic. It's relatively healthy, easy to store, inexpensive, and delicious. In turn, people are wisely loading up on soup and other canned goods as they prepare to shelter in place due to the COVID-19 pandemic for weeks on end.
Campbell Soup Company (NYSE:CPB) is particularly well-positioned to benefit from this trend. "Campbell's" is the first brand many people think of when they think about canned soup. Campbell's soups also tend to be relatively less expensive than many of its competitors. Thus, the company is experiencing higher sales because of the coronavirus crisis, especially from cash-strapped consumers. Plus, many people will remain customers after the crisis subsides, particularly if more people choose to continue to eat at home rather than at restaurants.
In addition to booming soup sales, debt-reduction and cost-cutting efforts are also helping to drive Campbell's profits higher. The company recently divested several of its lower-performing businesses to better focus on its core North American soup, packaged meals, and snack operations. This allowed Campbell to pay off several billion dollars of debt and significantly reduce its cost structure. Together, these moves have placed Campbell Soup Company on a path to sustained earnings and dividend growth, and its shares currently yield a solid 2.8%.
2. The bleach behemoth
Bleach, hand sanitizers, disinfectant wipes, and other cleaning products are also in high demand during the coronavirus pandemic. Clorox (NYSE:CLX) produces many of these vital products that help to keep people safe from COVID-19 and other diseases. And buying its stock is another great way for you to add an element of reliable income to your investment portfolio amid the coronavirus-driven bear market.
More than a dozen Clorox products made the Environmental Protection Agency's list of disinfectant products that are effective against SARS-CoV-2, the coronavirus that causes COVID-19. Companies that make products that can help slow the spread of the disease are almost assured of seeing sharply higher sales in the coming months, and this will likely be true for Clorox. In fact, Clorox's cleaning products have tended to sell out quickly as soon as retailers and online stores have made them available in recent weeks.
With effective cleaning now potentially a matter of life and death, people are likely to spend more money on products that can help keep their families safe. And more money spent on cleaning supplies should mean more profits for Clorox. As such, the company's 2.4% dividend yield appears well secured, and investors can expect Clorox to extend its 42-year streak of annual payout increases well into the future.