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In a previous study, we showed that the average return of high dividend yielding stocks was 13.04% between 1927 and 2009. Many defensive investors love high dividend yielding stocks and consider them as alternatives to 10-year Treasury bonds especially in loose monetary environments.

On the other hand, some dividend investors are also attracted to a recent dividend boost as well as high dividend yields. Together with high dividend yields, the stocks that increased their dividend payouts in the last year may look promising to dividend investors in the upcoming inflationary environment. Since we believe a recent dividend growth may suggest further increases in dividend yields, the stocks with dividend boosts not only have decent potential upsides but also are appealing to dividend investors that seek some inflation protection.

Some sectors, like Consumer Goods sector, contain many stocks that increased their dividends last year. We compiled a list of mega-cap US Consumer Goods stocks with high current dividend yields and high 1-year dividend growth. The sector classifications are sourced from Finviz and market data are sourced from Fidelity. All companies in this list didn’t cut their dividends in any single year since 2006. These stocks have market capitalizations above $4 billion, 12-month dividend yields of at least 3%, and 1-year dividend growth of at least 5%.

Dividend Yield

1-Year Div. Growth

52-Week Return

Reynolds American Inc.

RAI

5.55%

17.78%

55.35%

Lorillard Inc.

LO

4.65%

30.00%

59.68%

Kimberly-Clark Corp.

KMB

4.19%

6.06%

11.82%

Philip Morris International

PM

3.76%

10.34%

57.90%

ConAgra Foods Inc.

CAG

3.69%

15.00%

4.89%

HJ Heinz Co.

HNZ

3.55%

6.67%

23.17%

Clorox Co.

CLX

3.54%

20.00%

8.79%

Campbell Soup Co.

CPB

3.39%

5.45%

-3.51%

Mattel Inc.

MAT

3.39%

10.84%

29.78%

Procter & Gamble Co.

PG

3.27%

8.97%

9.13%

Dr. Pepper Snapple Group

DPS

3.14%

28.00%

12.24%

MeadWestvaco Corp.

MWV

3.10%

8.70%

42.26%

AVERAGE

14.97%

25.96%

Since 2006, these 12 large-cap U.S. Consumers stocks didn’t diminish their dividend payouts in any single year and they increased their dividend payout more than 5% in the past 12-months. The average 1-year dividend growth rate of these 12 stocks is 15%. In the last 52-week period, the average return of these 12 large-cap consumers stocks was 25.96%. Only one stock in this group – CPB – had a loss in the past 12 months, whereas 8 stocks – RAI, LO, KMB, PM, HNZ, MAT, DPS and MWV – provided double digit returns in the same period.

Here are the 12 large-cap US consumer goods stocks with a dividend boost in the past 12 months:

Reynolds American Inc.: Reynolds American Inc. is a US tobacco company operating worldwide. RAI has a 5.55% dividend yield and returned 55.35% during the past 12 months. RAI increased its dividend per share twice, from 45 cents to 53 cents, in the past 12 months. The stock has a 1-Year dividend growth rate of 17.78%. RAI has a market cap of $22.25B and P/E ratio of 16.14. Jim Simons, David Winters and Cliff Asness are prominent RAI investors.

Lorillard Inc.: Lorillard Inc. is a US tobacco company selling cigarettes primarily in the United States. LO has a 4.65% dividend yield and returned 59.68% during the past 12 months. LO increased its dividend per share twice, from $1.00 to $1.30, in the past 12 months. The stock has a 1-Year Dividend Growth of 30.00%. LO has a market cap of $16.08B and P/E ratio of 16.01. Jean-Marie Eveillard’s First Eagle and Jim Simons’ Renaissance Technologies hold more than 200M of LO.

Kimberly-Clark Corp.: Kimberly Clark Corp. is a US corporation producing paper and personal care products. KMB has 4.19% dividend yield and returned 11.82% during the past 12 months. KMB raised its dividend per share from 66 cents to 70 cents this year, having a 1-Year dividend growth of 6.06%. The stock has a market cap of $26.26B and P/E ratio of 15.19. 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.

Philip Morris International: Philip Morris International is a global tobacco company producing and selling cigarettes worldwide. PM has 3.76% dividend yield and returned 57.90% during the past 12 months. PM raised its dividend per share from 58 cents to 64 cents last year, having a 1-Year Dividend Growth of 10.34%. The stock has a market cap of $121.02B and P/E ratio of 16.68. Tom Russo had more than $500 Million in PM at the end of March 2011. Phill Gross, D.E. Shaw, Michael Lowenstein and Jim Simons are also among prominent PM investors.

ConAgra Foods Inc.: ConAgra Foods Inc. is a US company providing packaged foods to supermarkets and restaurants in the United States. CAG has 3.69% dividend yield and returned 4.89% during the past 12 months. CAG paid 23 cents of dividend per share in the second quarter of this year; a 15% increase from 20 cents of dividend per share in the same quarter of last year. The stock has a market cap of $10.19B and P/E ratio of 16.19. Ric Dillon’s Diamond Hill holds more than $150 Million of CAG.

HJ Heinz Co.: H.J. Heinz Co. is an US company providing food products worldwide. HNZ has 3.55% dividend yield and returned 23.17% during the past 12 months. HNZ increased its dividend per share from 45 cents to 48 cents this year, having a 1-Year Dividend Growth of 6.67%. The stock has a market cap of $17.40B and P/E ratio of 17.68. 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.

Clorox Co.: Clorox Co. is a global company providing chemical and food products worldwide. CLX has a 3.54% dividend yield and returned 8.79% during the past 12 months. CLX raised its dividend per share from 50 cents to 55 cents in the past 12 months. CLX has also announced to raise its dividend to 60 cents in the next quarter. The stock has a market cap of $9.04B and P/E ratio of 33.39. Carl Icahn’s Icahn Capital had $700 Million in CLX at the end of March.

Campbell Soup Co.: Campbell Soup Co. is a US company that produces and sells canned soups and related products worldwide. CPB has 3.39% dividend yield but lost 3.51% during the past 12 months. CPB raised its dividend per share from 27.5 cents to 29 cents last year, having a 1-Year Dividend Growth of 5.45%. The stock has a market cap of $10.98B and P/E ratio of 14.08. Mason Hawkins’ Southeastern Asset Management holds more than $600M of CPB.

Mattel Inc.: Mattel Inc. is a large toy company operating worldwide. MAT has a 3.39% dividend yield and returned 28.78% during the past 12 months. MAT increased its dividend per share from 83 cents to 92 cents this year. The stock has a 1-Year Dividend Growth of 10.84%. MAT has a market cap of $9.44B and P/E ratio of 14.69. Carl Icahn’s Icahn Capital had the largest MAT position among the 300+ funds we are tracking. John W. Rogers and Jim Simons are also among MAT investors.

Procter & Gamble Co.: Procter & Gamble Co. is a large US company providing consumer packaged goods worldwide. PG has 3.27% dividend yield and returned 9.13% during the past 12 months. PG raised its dividend per share from 48.18 cents to 52.5 cents this year, having a 1-Year Dividend Growth of 8.97%. The stock has a market cap of $179.26B and P/E ratio of 16.90. Warren Buffett has the largest position in PG. Phill Gross, Ken Fisher, Brett Barakett, Ric Dillon and D.E. Shaw also had PG positions in their portfolios at the end of March.

Dr. Pepper Snapple Group: Dr. Pepper Snapple Group is a US company providing non-alcoholic beverages worldwide. DPS has 3.14% dividend yield and returned 12.24% during the past 12 months. DPS raised its dividend per share from 25 cents to 32 cents this year, having a 1-Year Dividend Growth of 28.00%. The stock has a market cap of $9.03B and P/E ratio of 17.52. Louis Navellier and Cliff Asness hold the two largest DPS positions among 300+ fund managers we are tracking.

MeadWestvaco Corp.: MeadWestvaco Corp. is a US company providing packaging solutions and services to several industries worldwide. MWV has 3.10% dividend yield and returned 42.26% during the past 12 months. MWV increased its dividend last year from 23 cents to 25 cents, for the first time since 2002. The stock has a market cap of $5.47B and P/E ratio of 18.00. Michael Karsch’s Karsch Capital and Frank Brosen’s Taconic Capital hold the two largest MVW positions among 300+ funds we are tracking.

Source: 12 Dividend Boosting Consumer Stocks