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Companies in the consumer goods sector provide the most fundamental and basic necessities to households. Fluctuations in economic conditions have minimal effect on the demand for their products. While the stock prices experience ups and downs, the demand for consumer necessities is inelastic, and expected to go up along with population increases.

Here is a list of 11 companies in this industry, paying substantial dividends, and priced with reasonable P/E ratios. All of the following companies offered a minimum 3% dividend yield, and have a minimum market capitalization of $10 billion. Data was obtained from finviz.

Avon Products, Inc. (NYSE:AVP): New York-based Avon has a history that dates back to 1886. Avon is the world’s leading direct marketer of cosmetics, and has more than 5 million sales representatives globally. AVP has a market capitalization of $12.61 billion and a P/E ratio of 21.24, while forward P/E ratio is 12.9. During the past five years Avon had average EPS growth of -5.48%, while expected EPS growth over the next five years is 12.58%. Net profit margin in 2010 was 5.48%, and the company offered a dividend yield of 3.18%. Recent dividend history is as follows:

15 Feb,2011

$0.23

12 Nov,2010

$0.23

13 Aug,2010

$0.22

18 May,2010

$0.22

Campbell Soup Company (NYSE:CPB): Campbell Soup Company is a manufacturer and marketer of convenience food products. It was founded in 1869, and is headquartered in Camden, New Jersey. The market cap of CPB is $10.53 billion and P/E ratio is 14.06, while forward P/E ratio is 13. The company had an average EPS growth of 9.19% over the last five years. With a net profit margin of 10.49%, Campbell Soup Company had a dividend yield of 3.53% last year. Recent dividend dates are as follows:

7 Apr,2011

$0.29

22 Dec,2010

$0.29

7 Oct,2010

$0.28

1 Jul,2010

$0.28

H.J. Heinz Company (NYSE:HNZ): The H.J. Heinz Company produces a wide variety of food products worldwide. The company operates in five segments: North American Consumer Products, Europe, Asia/Pacific, U.S. Food Service, and the rest of the world. The market capitalization of Heinz is $16.27 billion. Its P/E ratio is 17.03, while forward P/E is 15.19. The company had an EPS growth rate of 8.06% over the past five years. Heinz has a dividend yield of 3.56% and a net profit margin of 9.24%. Recent dividend history of Heinz per share is as follows:

22 Mar, 2011

$0.45

20 Dec, 2010

$0.45

20 Sep,2010

$0.45

22 Jun,2010

$0.45

International Paper Co. (NYSE:IP): Tennessee-based International Paper was founded in 1898. IP has a market capitalization of $13.13 billion and a P/E ratio of 20.27, while the forward P/E is 9.55. The company is expected to have EPS growth of 4.57% in the next five years. Net profit margin in 2010 was 2.39%, while the company offered a dividend yield of 3.50%. The following is the recent dividend history of International Paper:

11 Feb,2011

$0.188

12 Nov,2010

$0.125

12 Aug,2010

$0.125

13 May,2010

$0.125

Kraft Foods Inc. (KFT): Kraft sells its products to consumers in approximately 170 countries. The company has a market capitalization of $58.54 billion and a P/E ratio 23.51, while the forward P/E ratio is 13.35. During the past five years Kraft had an average EPS growth of -3.49%. However, it is estimated that EPS growth will be 8.75% over the next five years. Kraft Foods has a low P/B ratio of 1.63. Net profit margin in 2010 was 5.48%, while the company offered a dividend yield of 3.18%. Recent dividend history is as follows:

29 Mar, 2011

$0.29

29 Dec, 2010

$0.29

28 Sep, 2010

$0.29

28 Jun, 2010

$0.29

Kimberly-Clark Corporation (NYSE:KMB): Established in 1928, Kimberly-Clark Corporation is a global company focused on building its personal care, consumer tissue and other healthcare businesses. The market cap of KMB is $26.62 billion and the P/E ratio is 14.84, while the forward P/E ratio is 12.37. The company had an annualized EPS growth of 6.08% over the last five years. Expected EPS growth over next five years is 8.73%. KMB’s net profit margin is 8.92%, and dividend yield was 4.24%. Recent dividend dates for KMB are as follows:

2 Mar,2011

$0.70

8 Dec,2010

$0.66

8 Sep,2010

$0.66

2 Jun,2010

$0.66

Lorillard, Inc. (NYSE:LO): Lorillard, Inc., founded in 1760, is one of the oldest tobacco producers in the world. LO has a market capitalization of $14.26 billion and a P/E ratio of 14.63, while forward P/E ratio is 12.2. During the past five years Lorillard had average EPS growth of 10.80%, while expected EPS growth rate of next five years is 4.90%. Thanks to the recent court ruling in favor of Lorillard, year-to-date performance is 22.94%. Net profit margin in 2010 was 17.33% while the company offered a dividend yield of 5.24%. Note that sustainability of LO's dividends is questionable given the negative equity on the balance sheet. Recent dividend history is as follows:

25 Feb,2011

$1.30

29 Nov,2010

$1.13

30 Aug,2010

$1.13

27 May,2010

$1.00

Altria Group Inc. (NYSE:MO): Altria Group, Inc., is a holding company incorporated in the Commonwealth of Virginia. The market cap of MO is $54.55 billion, and the P/E ratio is 13.94 while the forward P/E ratio is 11.95. Altria is expected to have an annualized EPS growth of 6.1% over the next five years. Altria’s net profit margin was 16.04%, and last year’s dividend was 5.83%. It is a safe dividend stock with a low Beta of 0.45. Recent dividend history is as follows:

11 Mar,2011

$0.38

23 Dec,2010

$0.38

13 Sep,2010

$0.38

11 Jun,2010

$0.35

Procter & Gamble Co. (NYSE:PG): The Procter & Gamble Company is a leading consumer products company that has one of the largest and strongest portfolios of trusted brands. With a market cap of $177.21 billion, PG is the biggest company on the list. The P/E ratio is 17.24, while the forward P/E ratio is 14.58. The company had an EPS growth of 9.13% over the last five years. EPS growth for the next five years is 8.89%. PG’s net profit margin was 14.06%, and the dividend was 3.32%. Recent dividend history of PG is as follows:

19 Jan,2011

$0.48

20 Oct,2010

$0.48

21 Jul,2010

$0.48

28 Apr,2010

$0.48

Philip Morris International, Inc. (NYSE:PM): Philip Morris manufactures and sells cigarettes and other tobacco products. The market cap of PM is $121.05 billion and the P/E ratio is 17.25, while the forward P/E ratio is 13.71. The company had an EPS growth of 8.06% over the last five years. Annualized EPS growth for the next five years is 9.25%. Philip Morris' profit margin was 11.07%, and dividend was 3.79%. Recent dividend record dates are as follows:

22 Mar,2011

$0.64

21 Dec,2010

$0.64

22 Sep,2010

$0.64

22 Jun,2010

$0.58

Reynolds American Inc. (NYSE:RAI): Reynolds American is another manufacturer and seller of cigarettes and other tobacco products. The market cap of RAI is $21.15 billion and P/E ratio is 15.98, while the forward P/E ratio is 12.82. The company had EPS growth of 6.37% in the last five years. Expected EPS growth over next five years is 5.10%. Reynolds American’s profit margin was 15.54%, and dividend yield was 5.84%. Recent dividend history of RAI is as follows:

8 Mar,2011

$0.53

8 Dec,2010

$0.49

8 Sep,2010

$0.45

8 Jun,2010

$0.45

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 11 Consumer Companies Paying Substantial Dividends