Dividends are not only great tools to build wealth, but they can provide income while still helping your portfolio grow. Passive income from stocks means cash in your pocket without having to sell shares of the companies you invest in.
When searching for great dividend stocks, the consumer goods sector is a great hunting ground because consumer goods companies create products that people tend to buy regardless of how the economy is doing. That leads to steady profits for the companies and reliable dividends for shareholders.
Here are five blue-chip stocks with a consumer goods focus you might want to consider because they have what it takes to help take your wealth to new heights while letting you sleep well at night.
1. Walmart
As the largest retailer in the United States, everyone knows the Walmart (WMT 0.57%) brand, and most Americans live within a short drive of a store. Walmart has done a whopping $600 billion in sales over the past year, topping even Amazon. The company uses its huge revenue as leverage with suppliers to buy and sell products at lower prices than competitors. Consumers love low prices, even more so during tough times. You can see below that Walmart's revenue has grown virtually uninterrupted for decades.
WMT Dividend data by YCharts.
Walmart pays a reliable dividend, which management has increased every year for 49 years, and yields 1.5% at the current share price. The Dividend Aristocrat has a dividend payout ratio of 68% based on profits, so shareholders can expect future growth. Steady growth and dividend raises have made it a market-beater throughout its history. The company successfully integrated e-commerce into its business, which could help drive long-term growth.
2. Brown-Forman
Alcohol is one of humankind's oldest products and one that people still love today. Brown-Forman (BF.B -1.84%) is the company managing the Jack Daniel's brand, one of the world's most famous whiskeys. Though Brown-Forman makes other liquor brands, Jack Daniel's is the majority of the business. The company's been around for decades and recently crossed $4 billion in annual revenue.
BF.B Revenue (TTM) data by YCharts.
A good dividend payer must be profitable, but Brown-Forman takes it further. The company has not only paid and raised its dividend for 38 years, but it has paid special dividends on occasion, one-time payments that are often much larger than its regular dividend. Sure, investors only get a 1.1% yield today, but that's based on an annual dividend of $0.82 per share. Management has given $1.00 special dividends as recently as late 2021.
3. Altria Group
Tobacco giant Altria (MO 1.45%) gives investors a high-yield option for their money. The stock's dividend yields a whopping 8% at the current share price. Altria markets Marlboro, the leading cigarette brand in America. You can see below that revenue has remained pretty stable in recent years; its significant drop in 2008 was due to the company's split with sister company Philip Morris International.
MO Revenue (TTM) data by YCharts.
Tobacco companies ship fewer cigarettes yearly, but they've made up the difference by raising their products' prices. That playbook has worked for decades; Altria is a Dividend King with 52 consecutive years of dividend growth. Altria must eventually diversify its business away from cigarettes, but it's a reliable high-yield stock. The company's dividend payout ratio is 81%, and Altria's $12 billion stake in Anheuser-Busch InBev is a nice safety net.
4. PepsiCo
Beverage and snack company PepsiCo (PEP -0.41%) may play second fiddle to Coca-Cola in the beverage space, but it's a consumer staples beast in its own right. The company sells dozens of soda and other beverage brands, plus its food segment, including names like Lay's and Doritos. Cumulatively, PepsiCo does more than $83 billion in annual sales. There is a good chance you're putting money in PepsiCo's pockets every time you shop for groceries.
PEP Revenue (TTM) data by YCharts.
You've seen this movie before; reliable revenue and profits lead to dependable dividends. PepsiCo is no stranger to dividend growth; the company's payout has grown 50 years in a row, crowning the stock as a Dividend King. The yield is solid at 2.5%, making dividend reinvestment a reliable option for investors who want to buy shares, lock them away for many years, and let compounding do its job over time.
5. Hershey
Like many of the stocks above, Hershey (HSY -0.53%) sells a beloved product that's been around for many years and sells during up and down economies. Who doesn't like chocolate? More specifically, what American doesn't like Hershey's chocolate? The company's numerous brands, including Reese's, Twizzlers, KitKat, Heath, York, and others, has roughly half of the chocolate and candy product shelf space in grocery stores across the country. That equals $10 billion in annual revenue, and growing to that point has been a pretty smooth upward trajectory.
HSY Revenue (TTM) data by YCharts.
The dividend has followed sales, translating to 13 years of dividend growth. The dividend yield won't wow you at 1.8%, but the payout ratio is just 47%, giving management room to raise the dividend. The company's steadily expanded its business into salty snacks, which could give the company some additional long-term growth potential. Investors looking for a long-term stock with solid total return potential should have Hershey on their radar.
