Please ensure Javascript is enabled for purposes of website accessibility

2 Top Dividend Stocks to Buy in April

By Joe Tenebruso - Apr 8, 2020 at 9:45AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

These safe investments can help you generate reliable cash income in the stock market.

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.

A piece of paper with the word dividends written on it on top of nundred dollar bills.

These dividend stocks can provide you with a stream of cash during the coronavirus crisis. Image source: Getty Images.

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 (CPB -0.28%) 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 (CLX 0.21%) 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.

Joe Tenebruso 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Clorox Company Stock Quote
The Clorox Company
CLX
$144.92 (0.21%) $0.31
Campbell Soup Company Stock Quote
Campbell Soup Company
CPB
$49.95 (-0.28%) $0.14

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
389%
 
S&P 500 Returns
125%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.