7 Dividend Oxen to Plow Your Portfolio's Yield Harvest

Includes: ABT, CL, HSY, KMB, KO, MDT, MO
by: Investment Underground
We looked for safe, plodding high-yielders of all sizes with an ability to maintain and grow dividends. These are the reliable oxen we came up with to ensure prosperity in 2011:
Coca-Cola Company (NYSE:KO): Coke has paid dividends since 1893. Right now, the yield is 2.9%. Recorded investors on March 15 will get their next dividend payment on April 1. Over the last five years, share prices are up over 50%. They currently trade at a P/E of 12.7. For 2010, reported net revenue was $35.1 billion. Over the past five years, EBT margins have consistently been in the upper 20s, whereas for Dr. Pepper Snapple (NYSE:DPS), it has been between 14% and 15%. The ROIC for Dr. Pepper Snapple was 9.5% in 2010, but for Coca-Cola it was right near 20%. In 2010, the company returned $7.2 billion to shareowners in 2010, through $4.1 billion in dividends and $3.1 billion in share repurchases. In 2011, it expects to repurchase $2 billion to $2.5 billion in stock over the course of the year as part of a share repurchase program. The company expects its acquisition with Coca Cola Enterprises to have 2011 cost synergies of $140 to $150 million.
Abbott Laboratories (NYSE:ABT): This pharmaceutical powerhouse yields 4.03% and has a history of raising its dividend. The company's portfolio of patent protected drugs, along with its excellent nutritional and diagnostic groups and its history of strategic acquisitions, have dug ABT a wide economic moat, which is one of the reasons we think Warren Buffett might buy this stock.

Colgate-Palmolive (NYSE:CL): As we wrote here, this company has returned 36.03% on invested capital in 2010. The figure in 2009 was 39.32%. The company made $15.56 billion in revenues in 2010, which was an increase of 1.55%, after a flat 2009. Profits also came in at $2.2 billion, which was a decrease of 3.84% in 2010, after rising by 17.06% in 2009. The respective EBT margins were 22.04% and 23.08%. EPS was at $4.31, implying a P/E of 17.9. Reflecting the company’s positive outlook, the Board of Directors increased the ongoing quarterly common stock cash dividend by 9%. The increase will be effective as of Q2 2011. The new rate of $0.58 per share is up from $0.53. The second quarter dividend is to be paid on May 16, 2011 to shareholders of record as of April 26, 2011. On an annual basis, the new dividend rate is $2.27 vs. $2.03 per share previously. The current yield is 3%. The company has paid uninterrupted dividends on its common stock since 1895. Its current ratio is 1.0, and its debt to equity ratio is 1.05.

Medtronic (NYSE:MDT): Another dominating business, this company produces medical equipment and holds market leading positions in heart devices, insulin pumps, and spinal products. Known once for its leaning too much on its heart disease business, the company has moved into other therapeutic areas, a good move in our opinion. Shares have appreciated over the past three months since we first wrote about the company here and again where we declared it one of our 10 dividend "kings" here.

Kimberly-Clark (NYSE:KMB): The company sports an ROE of 31.1% in 2010. In 2009, its ROE was 97.74%. The household products industry average ROE is 25.67%. ROA for KMB in 2010 is 9.27%. The PEG ratio for KMB is 1.6 while the industry average is 1.84. Comparatively, the P/Es for KMB and CL are 14.6 and 18.2 for the trailing 12 months. For the household products industry, the average P/E is 16.1. EPS fell by 1.5% for KMB in 2010, but increased for CL by 17.1% in the first 9 months of 2010. In 2009, CL grew EPS by 19.4%. In 2010, the EBT and profit margins for Kimberly-Clark are 12.9% and 33.17%. Colgate-Palmolive has an EBT margin of 21.9% and profit margin of 59.15% in the first 9 months of 2010. In 2009, the respective figures are 23.08% and 58.77%. The average profit margin for the household products industry is 13.48%. KMB has paid dividends since 1935. The current yield on KMB is 4.3% with an ex-dividend date of March 2, and payment date of April 4. KMB also came up on our list of 8 blue chip stocks for an inflation proof portfolio.

Altria Group (NYSE:MO): This $50 billion enterprise sells one of the most price inelastic products on the market. Cigarette input costs are a fraction of cost of goods sold for this company. Shares trade below $25 apiece and yield around 6%.

Hershey (NYSE:HSY): This company delivered a ROIC of 20.42% in 2010, after returning 19.01% in 2009. Revenues also grew by 7.03% in 2010, but only showed +3.23% in 2009. Profits grew by 16.93% in 2010, after jumping 40.01% in 2009. The respective EBT margins were 14.26% and 12.67%. EPS was $2.21 in 2010, which implies a P/E of 23.9. HSY shares also have a current yield of 2.6%. The company recently acquired a minority stake in Tri-Us LLC, which does business as Mix1, as Hershey looks to get more involved in the health and wellness community.

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