3 Consumer Staples Stocks Paying Solid Dividends May Protect Your Portfolio During Downturn

Zinger Key Points
  • Kimberly-Clark, Nestle and Clorox are a great investment to diversify against volatility and an economic downturn.
  • Kimberly-Clark has an aristocratic track record of increasing its dividends for 50 consecutive years.

During times of recession or high inflation, people will still need to purchase everyday necessities such as food, cleaning supplies, and hygiene products.

That's why so-called consumer staples stocks tend to have steady and low growth and are less impacted by business cycles.

With many Wall Street analysts expecting a recession sometime in 2023, stocks in the consumer staples sector are a great way to hedge one's portfolio for an economic downturn. Read more about three dividend-paying consumer staples stocks to diversify your portfolio against the next downturn.

See Also: Jamie Dimon Says If There's A Mild Or Harsh Recession 'We're Going To Be Fine,' But Here's His Primary Concern

  • Kimberly-Clark Corporation KMB offers a forward dividend yield of 3.41% or $4.64 per share annually. It makes quarterly payments and has an aristocratic track record of increasing its dividends for 50 consecutive years. The tissue and hygiene product company manufactures Huggies, Pull-Ups, Kotex, Depend, Kleenex, and Cottonelle, among others — products sold in more than 175 countries. In 2021, Kimberly-Clark had net sales of $19.4 billion, and is expecting net sales increase by between 2% to 4% with organic sales growth of between 5% to 7% (no change), and adjusted earning per share of between $5.60 to $6.00, in 2022.
  • The Clorox Company CLX offers a forward dividend yield of 3.17% or $4.72 per share annually, using quarterly payments, with an excellent track record of increasing its dividends for 45 consecutive years. The household products company has at least 17 brands, including Liquid-Plumr, Pine-Sol, Glad, Hidden Valley, Brita, and Burt's Bees — all sold in more than 100 countries. Clorox had net sales of roughly $7.04 billion in 2022, and is projecting fiscal 2023 net sales to be down 4% to up 2% compared to the prior year, while the gross margin is expected to increase by about 200 basis points.
  • Nestle S.A. NSRGY offering a dividend yield of 2.55% or $2.97 per share through annual payments, with an inconsistent track record of increasing its dividends. Nestle, considered the largest food and beverage manufacturer in the world by sales, has more than 30 brands in its portfolio, including Haagen-Dazs, KitKat, Perrier and Gerber. They're sold in almost 190 countries. Nestle had net sales of nearly $93.2 billion in 2021, and updated its 2022 full year outlook to expect organic sales growth of 8%, and the operating profit margin is expected to be around 17%.

Consumer staples stocks a great investment to diversify against volatility and an economic downturn. For instance, from Dec. 31, 2019 to its peak in August 2020, Clorox soared over 68%, while most stocks were obliterated due to the pandemic.

Image: Pixabay

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