10 High Dividend Stocks With Strong Growth

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 |  Includes: AVP, CLX, DBD, KHC, KMB, LEG, PBI, PG, RAI, VGR
by: Insider Monkey

In a previous article, we showed that many high dividend yielding utilities stocks achieved consistent dividend growth in the past 5 years. Since many defensive investors seek long records of dividend payments in high dividend yielding stocks, we believe the stocks that were able to increase dividends can be attractive to such conservative investors.

Like the utilities sector, the consumer goods sector contains high dividend yielding stocks that achieved consistency in dividend payments. We compiled a list of US consumer goods stocks with high dividend yields and consistent dividend growth. The market data are sourced from Fidelity. All companies in this list increased their dividend payments every year since 2005. These stocks have market capitalization above $1 billion and 12-month dividend yield of at least 3%.

Dividend Yield

5-Year Average Div. Growth

52-Week Return

Vector Group Ltd.

(NYSE:VGR)

8.56%

5.00%

24.85%

Pitney Bowes Inc.

(NYSE:PBI)

6.48%

2.95%

9.06%

Reynolds American Inc.

(NYSE:RAI)

5.61%

11.14%

55.08%

Leggett & Platt Inc.

(NYSE:LEG)

4.54%

11.03%

8.45%

Kimberly Clark Corp.

(NYSE:KMB)

4.28%

7.39%

11.18%

Diebold Inc.

(NYSE:DBD)

3.64%

5.43%

13.39%

H.J. Heinz Company

(HNZ)

3.61%

9.86%

22.86%

The Clorox Company

(NYSE:CLX)

3.59%

15.65%

8.93%

Avon Products Inc.

(NYSE:AVP)

3.33%

5.62%

10.82%

Procter & Gamble

(NYSE:PG)

3.24%

11.11%

9.21%

AVERAGE

8.52%

17.38%

Click to enlarge

Since 2005, these 10 US consumer goods stocks have increased their cash dividends every year and their 5 year average dividend growth is 8.52% on average. In the last 52-week period, the average return of these 10 stocks was 17.38%. No stock in this group had a loss in the past 12 months, whereas 6 stocks – VGR, RAI, KMB, DBD, HNZ and AVP – provided double digit returns in the same period.

10 consumer goods stocks with consistent dividend growth are as follows:

1. Vector Group Ltd. (VGR): Vector Group Ltd. is a holding company providing cigarettes, alcoholic beverages and real estate in the United States. VGR has a high dividend yield of 8.56% and returned 24.85% during the past 12 months. In the past 5 years, VGR increased its dividend payments 5.00% on average. The stock has a market cap of $1.40B and P/E ratio of 25.25. Jim Simons’ Renaissance Technologies had more than $60 Million in VGR. Andy Redleaf’s Whitebox Advisors and Cliff Asness’ Aqr Capital also hold large VGR positions.

2. Pitney Bowes Inc. (PBI): Pitney Bowes Inc. is a U.S. company providing packaging and mailing equipments and related services. PBI has a high dividend yield of 6.48% and returned 9.06% during the past 12 months. In the past 5 years, PBI increased its dividend payments 2.95% on average. The stock has a market cap of $4.66B and P/E ratio of 14.83. Daniel Bubis, Jim Simons, David Dreman and Phill Gross are among PBI investors.

3. Reynolds American Inc. (RAI): Reynolds American Inc. is a large U.S. company providing tobacco products in the United States. RAI has a 5.61% dividend yield and returned 55.08% during the past 12 months. In the past 5 years, RAI increased its dividend payments 11.14% on average. The stock has a market cap of $22.03B and P/E ratio of 15.98. Jim Simons’ Renaissance Technologies and David Winter’s Wintergreen Advisors hold the largest RAI positions among 300+ funds we are tracking.

4. Leggett & Platt Inc. (LEG): Leggett & Platt Inc. is a U.S. company manufacturing home furnishings and industrial materials. LEG has a 4.54% dividend yield and returned 8.45% during the past 12 months. In the past 5 years, LEG increased its dividend payments 11.03% on average. The stock has a market cap of $3.40B and P/E ratio of 20.52. Paul Ruddock’s Lansdowne Partners hold more than $50 Million of LEG.

5. Kimberly Clark Corp. (KMB): Kimberly Clark Corp. is a US corporation producing paper and personal care products. KMB has a 4.28% dividend yield and returned 11.18% during the past 12 months. In the past 5 years, KMB increased its dividend payments 7.39% on average. The stock has a market cap of $25.72B and P/E ratio of 14.88. Ric Dillon’s Diamond Hill had the largest position in KMB among the funds we are tracking. D.E. Shaw, Phill Gross and Cliff Asness are also among KMB investors.

6. Diebold Inc. (DBD): Diebold Inc. is an US company providing security systems and related services to financial, commercial and tail markets worldwide. DBD has a 3.64% dividend yield and returned 13.39% during the past 12 months. In the past 5 years, DBD increased its dividend payments 5.43% on average. The stock has a market cap of $2.01B. Chuck Royce and Harris Associates hold the largest positions of DBD.

7. H.J. Heinz Company (HNZ): H.J. Heinz Company is an US company providing food products worldwide. HNZ has a 3.61% dividend yield and returned 22.86% during the past 12 months. In the past 5 years, HNZ increased its dividend payments 9.86% on average. The stock has a market cap of $17.10B and P/E ratio of 17.37. Nelson Peltz’s Trian Partners had nearly $100 Million in HNZ. Robert J.Caruso’s Select Equity and Jim Simons’ Renaissance Technologies are also among HNZ investors.

8. The Clorox Company (CLX): The Clorox Company is a global corporation providing chemical and food products worldwide. CLX has a 3.59% dividend yield and returned 8.93% during the past 12 months. In the past 5 years, CLX increased its dividend payments 15.65% on average. The stock has a market cap of $8.91B and P/E ratio of 32.93. Carl Icahn’s Icahn Capital had $700 Million of CLX at the end of March.

9. Avon Products Inc. (AVP): Avon Products Inc. is a global company providing beauty products, cosmetics and toys worldwide. AVP has a 3.33% dividend yield and returned 10.82% during the past 12 months. In the past 5 years, AVP increased its dividend payments 5.62% on average. The stock has a market cap of $11.88B and P/E ratio of 17.16. Jim Simons’ Renaissance Technologies, Phill Gross’ Adage Capital and Mark Kingdon’s Kingdon Capital are among AVP investors.

10. Procter & Gamble. (PG): Avon Products Inc. is a large US company providing consumer packaged goods worldwide. PG has a 3.24% dividend yield and returned 9.21% during the past 12 months. In the past 5 years, AVP increased its dividend payments 11.11% on average. The stock has a market cap of $181.46B and P/E ratio of 17.11. Warren Buffett has the largest position in PG. Phill Gross, Ken Fisher, Bret Barakett, Ric Dillon and D.E. Shaw also had PG positions in their portfolios at the end of March.

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