We have been in a bull market now for what seems like forever. As a result stocks have ticked higher and higher and higher, and right now many are staying away from buying as great buying opportunities are harder and harder to come by. But that being said, are there still great deals to be had for Dividend Growth Investors, and Value Investors alike? I say yes.
There are a slew of consumer staple companies such as BUD, KHC, and GIS that are trading below where I feel their stock price will be eventually.
Anheuser Busch InBev (BUD): I initiated my position in this stock back when it was over $111 per share. Since then the stock has slipped recently below $100. As of this moment the stock has finally ticked back above $100 to $100.24 this morning.
I still like this stock at $115 or below. So if I can free up some more capital, I will ponder whether to send some of it toward purchasing more shares of BUD.
Why do I feel this stock is worth that much? When you have alcoholic brands such as Budweiser, Bud Light, Corona, Michelob and Stella Artois under one roof that is some fire power.
Not only that, but for the last few years there has been a looming merger of Anheuser Busch InBev and Miller Coors. If that ever comes to fruition, you will have basically every major beer brand under the same roof.
Even if that merger somehow falls through or never finalizes, I feel confident in BUD. It has a yield of over 3%. As a result, my shares of BUD are down 10% from where I bought them, however the beefy dividend has actually made it where overall I’m down just under 3%.
The stock also sports a P/E Ratio of under 25 (24.13), which is nice, and they have increased their dividend for the last 8 years, which is even nicer.
One note to keep an eye on for BUD, is that their dividend payout ratio is currently 103% which could be troubling to future dividend growth, but I’m willing to roll the dice.
Kraft Heinz (KHC) is another consumer staple that has been hammered as far as stock price. Sure there are cheaper options out there for Cheese and Ketchup, but at the end of the day what are the names you recognize? Kraft and Heinz.
Currently the stock is trading under $60/share at $59.91. I absolutely believe this is a steal in the long run. The dividend yield, like BUD, is over 3% and the P/E Ratio is an amazing 6.87.
The company has raised it’s dividend over the last four years, and it’s payout ratio is roughly 67%, so there is still some wiggle room there.
This stock is a good one in my opinion.
And what about General Mills (GIS)?
The stock has a 52-week high of $60.69, yet its trading at $45.21 as we speak. The cereal giant took a beating due to its lack of use of natural ingredients, but it has since made a concerted effort to improve in that department.
Currently the dividend yield is over 4%, and it’s P/E Ratio is a solid 12.39.
Despite it’s drop in price over the last year, I feel this is still a solid stock pick. And for you fellow Dividend Growth Investors, the dividend has grown for 14-consecutive years and the dividend payout ratio is 64.3%, which signals room for growth.
Overall I like BUD, KHC and GIS as long term Dividend Stocks, and I believe they can be had at a great price currently.
Disclosure: I am long on BUD, KHC and GIS.
This should not be considered financial advise as I am not licensed to provide that for anyone. I am just a guy who wants to share his own attempt at becoming financially independent. This should be used as entertainment only.