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Investors love dividends, as they provide a passive income stream and help cushion the impact of drawdowns in other positions.
And when seeking income, many investors turn to the Dividend Aristocrats, a group of S&P 500 companies that have upped their dividend payouts for a minimum of 25 consecutive years.
However, a step above is the elite Dividend Kings group, companies that have increased their dividend payouts for a minimum of 50 consecutive years.
Three members of the club – Johnson & Johnson (JNJ - Free Report) , PepsiCo (PEP - Free Report) , and Sysco (SYY - Free Report) – all deserve consideration from those seeing reliable dividend payouts. Let’s take a closer look at each.
Johnson & Johnson
Headquartered in New Jersey, Johnson & Johnson is an American multinational corporation that develops medical devices, pharmaceuticals, and consumer packaged goods. Shares currently yield a solid 2.9% annually paired with a payout ratio sitting sustainably at 44% of earnings.
As we can see below, the company has shown a commitment to increasingly rewarding shareholders.
Image Source: Zacks Investment Research
In addition, shares could entice value-focused investors, with the current 15.2X forward earnings multiple sitting beneath the 16.8X five-year median and the Zacks Medical sector average.
Image Source: Zacks Investment Research
PepsiCo
PepsiCo is an American multinational beverage, food, and snack corporation headquartered in New York. Shares yield 2.7% annually, with the company’s payout growing by an impressive 5.5% over the last five years.
Image Source: Zacks Investment Research
PEP is a consistent earnings outperformer, exceeding earnings and revenue estimates in five consecutive quarters. Just in its latest release, the consumer staples titan delivered a 10% EPS beat and reported revenue 4% above expectations.
As we can see below, the company’s revenue growth is somewhat-seasonal but overall reflects stability.
Image Source: Zacks Investment Research
Sysco Corp.
Sysco markets and distributes a range of food and related products primarily to the food service or food-away-from-home industry. Shares currently yield 2.6% annually, with the payout growing by a solid 7.5% over the last five years.
Image Source: Zacks Investment Research
It’s hard to ignore the company’s growth profile, further reflected by its Style Score of “B” for Growth. Estimates suggest nearly 25% earnings growth in its current fiscal year (FY23) on 12% higher revenues. And in FY24, current projections call for an additional 12% earnings growth paired with a 4% sales climb.
Image Source: Zacks Investment Research
Bottom Line
Targeting dividend-paying stocks is an excellent strategy that investors can deploy.
Dividends soften the blow from drawdowns in other positions, provide more than one way to reap a return from an investment, and allow maximum returns through dividend reinvestment.
And all three stocks above – Johnson & Johnson (JNJ - Free Report) , PepsiCo (PEP - Free Report) , and Sysco (SYY - Free Report) – are Dividend Kings, upping their dividend payouts for a minimum of 50 consecutive years.
For those seeking a reliable income stream, all three deserve serious consideration.
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Passive Income: 3 Dividend Kings Worth a Look
Investors love dividends, as they provide a passive income stream and help cushion the impact of drawdowns in other positions.
And when seeking income, many investors turn to the Dividend Aristocrats, a group of S&P 500 companies that have upped their dividend payouts for a minimum of 25 consecutive years.
However, a step above is the elite Dividend Kings group, companies that have increased their dividend payouts for a minimum of 50 consecutive years.
Three members of the club – Johnson & Johnson (JNJ - Free Report) , PepsiCo (PEP - Free Report) , and Sysco (SYY - Free Report) – all deserve consideration from those seeing reliable dividend payouts. Let’s take a closer look at each.
Johnson & Johnson
Headquartered in New Jersey, Johnson & Johnson is an American multinational corporation that develops medical devices, pharmaceuticals, and consumer packaged goods. Shares currently yield a solid 2.9% annually paired with a payout ratio sitting sustainably at 44% of earnings.
As we can see below, the company has shown a commitment to increasingly rewarding shareholders.
Image Source: Zacks Investment Research
In addition, shares could entice value-focused investors, with the current 15.2X forward earnings multiple sitting beneath the 16.8X five-year median and the Zacks Medical sector average.
Image Source: Zacks Investment Research
PepsiCo
PepsiCo is an American multinational beverage, food, and snack corporation headquartered in New York. Shares yield 2.7% annually, with the company’s payout growing by an impressive 5.5% over the last five years.
Image Source: Zacks Investment Research
PEP is a consistent earnings outperformer, exceeding earnings and revenue estimates in five consecutive quarters. Just in its latest release, the consumer staples titan delivered a 10% EPS beat and reported revenue 4% above expectations.
As we can see below, the company’s revenue growth is somewhat-seasonal but overall reflects stability.
Image Source: Zacks Investment Research
Sysco Corp.
Sysco markets and distributes a range of food and related products primarily to the food service or food-away-from-home industry. Shares currently yield 2.6% annually, with the payout growing by a solid 7.5% over the last five years.
Image Source: Zacks Investment Research
It’s hard to ignore the company’s growth profile, further reflected by its Style Score of “B” for Growth. Estimates suggest nearly 25% earnings growth in its current fiscal year (FY23) on 12% higher revenues. And in FY24, current projections call for an additional 12% earnings growth paired with a 4% sales climb.
Image Source: Zacks Investment Research
Bottom Line
Targeting dividend-paying stocks is an excellent strategy that investors can deploy.
Dividends soften the blow from drawdowns in other positions, provide more than one way to reap a return from an investment, and allow maximum returns through dividend reinvestment.
And all three stocks above – Johnson & Johnson (JNJ - Free Report) , PepsiCo (PEP - Free Report) , and Sysco (SYY - Free Report) – are Dividend Kings, upping their dividend payouts for a minimum of 50 consecutive years.
For those seeking a reliable income stream, all three deserve serious consideration.