Why Consumer Stocks Make Good Dividend Payers

Consumers will continue to purchase staples, even when they can’t afford discretionary spending on a vacation, a new car, or the latest iPhone

Michael Hodel, CFA 24 August, 2018 | 8:54AM

Oxford street consumers stocks dividend payers staples

Smokers are going to smoke, drinkers are going to drink, and everyone needs to eat and attend to personal hygiene. The companies that make the products to meet those needs, often dubbed consumer staples, are considered to be somewhat impervious to economic cycles.

The logic is that consumers will continue to purchase these products, in some form or another, even when they can’t afford discretionary spending on a vacation, a new car, or the latest iPhone. Morningstar groups these companies in its consumer defensive sector.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Amazon.com Inc3,200.00 USD0.55
British American Tobacco PLC2,878.00 GBX-1.44
Imperial Brands PLC1,400.00 GBX-0.36
Philip Morris International Inc72.96 USD4.02

About Author

Michael Hodel, CFA  Michael Hodel, CFA, is an associate director of research with Morningstar.

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