5 Consumer Staple Dividend Stocks To Enrich Your Portfolio

The novel coronavirus and the resultant social distancing have messed up the economy, thanks to travel restrictions, business shutdowns and major supply-chain bottlenecks. These hurdles weighed on corporate results of companies across several sectors in the recently-reported first-quarter earnings cycle. As the pandemic started hurting businesses around mid-March, the second quarter stands in an even worse position, with the results of many companies expected to be under pressure.

Although bans are being lifted and businesses are gradually reopening, the constant rise in the number of cases has set in fears of a second wave of the crisis. And with no vaccine discovered yet, there is a lot of uncertainty surrounding the duration and severity of the virus. With so many qualms plaguing investors’ minds, dividend-paying stocks seem like a tempting option at the moment.

Dividend Stocks From the Defensive Zone: A Win-Win Situation?

Although companies across many sectors suspended buyback activities and dividend payments to preserve financial flexibility amid the crisis, there are players in the Consumer Staples universe, which are continuing with dividend payment practices even amid such difficult times. This tells a lot about their sustainable business models, long track record of profitability, rising cash flows, solid liquidity and some value characteristics.

In fact, the defensive Consumer Staples sector has always been a go-to place for investors. At a juncture where most sectors are grappling with coronavirus-led disruptions, many companies from the consumer staples space are gaining from burgeoning demand for essential items amid the coronavirus-led stockpiling. That said, investing in consumer staple dividend stocks seems to be the right thing to do at present.

Here’s the Right Way to Pick Them

Targeting dividend stocks from the Consumer Staples sector and combining them with a Zacks Rank of less than or equal to #2 (Buy), along with VGM Scores of A or B, will likely ensure a steady stream of cash to your portfolio. Although these stocks do not necessarily have the highest yields, they have an impressive dividend payment track record. Based on the stocks’ prospects, their pay-outs appear affordable and safe.

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