Two Dividend-Yielding Stocks to Invest in for Steady Earnings from Passive Income Sources
Two Dividend-Yielding Stocks to Invest in for Steady Earnings from Passive Income Sources
People in the United States sure love their sugar. On average, we consume about 17 teaspoons of added sugar daily, which is 5 teaspoons more than what's recommended. We tend to add sugar to a wide range of items, such as drinks, snacks, and various processed and prepared foods.
While our high sugar intake isn't exactly good for our waistlines, it's certainly beneficial for the financial well-being of companies that provide us with all the sweet treats we can't resist. These companies make a substantial profit from satisfying our sugar cravings, allowing them to generously pay dividends to their investors.
If you're interested in investing in sugar stocks to enjoy a consistent stream of dividend income, take a look at the following two options:
The Coca-Cola Company
Chances are you're already familiar with The Coca-Cola Company (KO 0.50%) if you have a sweet tooth. This global beverage giant is responsible for popular sweetened sparkling soft drink brands like Coca-Cola, Sprite, and Fanta. Besides selling these iconic drinks, it also offers healthy alternatives like water, sports drinks, coffee, tea, juice, and plant-based beverages. Many of the latter products contain sugar, contributing to our high sugar intake.
The company has established itself as a strong dividend stock, having increased its payout for an impressive 62 consecutive years. This earning title makes it an esteemed Dividend King, a company with at least 50 years of uninterrupted dividend growth. Most recently, it bumped up its dividend payment by 5.4%. In 2021, it distributed $8 billion in dividends and has disbursed over $80 billion to its shareholders since 2010.
The Coca-Cola Company currently offers a decent yield of roughly 3%. This is well above the current low dividend yield of the S&P 500, which hovers around 1.2%. Given its track record, it's likely that the company can maintain this impressive growth and potentially boost its dividend payout further.
The company anticipates organically growing its revenue by 4% to 6% on an annual basis, which should translate to 7% to 9% annual earnings-per-share growth in the long term. This should empower the beverage behemoth to continue satisfying its investors' desire for a growing passive dividend income stream.
The Hershey Company
Based in the United States, The Hershey Company (HSY -3.75%) is a leading confectionery company and the second-largest snack player in the country. Its well-known chocolate brands encompass Hershey's, Reese's, Kisses, and Twizzlers. In addition, it offers salty snacks such as SkinnyPop, Pirate's Booty, and Dot's Homestyle Pretzels.
The chocolatier pays out a substantial dividend, with a yield that exceeds 3%. Much like The Coca-Cola Company, it has hiked its dividend annually for the past 15 years, increasing its payout at an impressive annual rate of over 10% during the past decade.
Hershey expects future growth, projecting 2%-4% annual net sales expansion and 6% to 8% adjusted earnings-per-share growth in the long term. The company is also working on developing innovative new products and making strategic acquisitions to drive growth. For example, it recently broadened its candy offerings by acquiring Sour Strips to improve its presence in the rapidly expanding sour candy market. Its ability to develop novel products and expand through acquisition should enable it to continue amplifying its scrumptious dividend.
Sweet income sources
The Coca-Cola Company and The Hershey Company both tend to generate handsome returns by leveraging our propensity for sugar. This income allows them to provide generous dividends to their investors. They've demonstrated a stellar record of growing their dividends, which is likely to continue. These features make them intriguing choices for those aiming to collect some delightful passive income.
Investors seeking a consistent stream of dividend income might consider investing in sugar stocks, such as The Coca-Cola Company or The Hershey Company. The former's investment in various sweetened beverages, including sugary soft drinks and healthy alternatives, has contributed to its dividend growth for 62 consecutive years and a current yield of approximately 3%. On the other hand, The Hershey Company, known for its chocolate and salty snack brands, offers a dividend yield exceeding 3% and has increases its dividend annually for the past 15 years.
These companies' reliance on our sugar consumption not only generates significant profits, allowing them to pay generous dividends to investors, but also enables them to establish themselves as Dividend Kings and continue growing their dividend income streams, making them attractive options for passive income seeking investors.