3 Dividend-Paying Consumer Staples Stocks for Stability

Dividend-paying consumer staples stocks are a cornerstone of stable investment portfolios, especially during uncertain economic periods. Companies that operate in this sector provide essential goods, ensuring consistent demand regardless of market conditions and making them stable stocks.

Amid this backdrop, investors might consider investing in three fundamentally sound consumer staple stocks, Walmart Inc. (WMT), Colgate-Palmolive Company (CL), and Sysco Corporation (SYY), that are stable and reliable.

Income-focused investors also favor dividend-paying stocks in this sector. With yields often exceeding market averages, they provide a reliable income source while offering potential for capital appreciation.

The U.S. economy’s real GDP grew 2.8% in the third quarter of 2024, driven by the rise in consumer spending, government spending, and exports. Consumer spending was at a CAGR of 3.7%, where the spending on health care and food services were the largest contributors.

The S&P Consumer Staples Select Sector index has returned an average of 18.1% so far in 2024. Also, for most of the 10 years, the consumer staples sector had a positive average annualized return of 8.4%. This consistent characteristic is particularly advantageous in inflationary environments, where maintaining margins becomes critical.

Moreover, as per Statista, the global consumer goods market is anticipated to reach $594.50 billion in 2024, exhibiting a CAGR of 1.4% from 2024 to 2029. Further, rising incomes and population growth in these regions are expected to drive demand for consumer staples, further enhancing their long-term investment appeal.

Now, let us dive deep into the fundamentals of the above-mentioned three consumer staples:

Walmart Inc. (WMT)

WMT is a technology-powered omnichannel retailer that engages in the operation of retail, wholesale, other units, and e-commerce worldwide. The company functions as supercenters, supermarkets, hypermarkets, warehouse clubs, and cash and carry stores. It operates through three segments: Walmart U.S.; Walmart International; and Sam's Club. 

On December 3, WMT completed the acquisition of VIZIO. This acquisition should allow WMT to use VIZIO’s SmartCast Operating System, enhancing customers' shopping journeys and serving them in new ways. It should help connect customers at scale and boost product discovery.

On February 20, demonstrating its commitment to returning value to shareholders, the company declared a quarterly dividend of $0.2075 per share, payable to its shareholders on January 6, 2025. With 51 years of consecutive dividend growth, WMT pays an annual dividend of $0.83, which translates to a yield of 0.90% at the current share price. Its four-year average dividend yield is 1.46%.

In the fiscal third quarter that ended on October 31, 2024, WMT’s total revenue increased 5.5% year-over-year to $169.59 billion. The company reported an operating income of $6.71 billion, indicating 8.2% growth from the prior year’s quarter. WMT’s attributable net income stood at $4.58 billion, up 910.4% year-over-year, while its EPS grew 850% from the year-ago value to $0.57.

The consensus revenue estimate of $178.78 billion for the fiscal first quarter (ending January 2025) represents a 3.9% increase year-over-year. The consensus EPS estimate of $0.64 for the same quarter indicates a 6.8% improvement year-over-year. The company has an impressive surprise history; it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.

The stock has gained 80% over the past year and 50.6% over the past nine months to close the last trading session at $92.24. Its 24-month beta is 0.54.

WMT’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

WMT has an A grade for Stability and Sentiment and a B for Momentum. It is ranked #12 out of the 37 stocks in the A-rated Grocery/Big Box Retailers industry. Click here to see the additional ratings for WMT (Growth, Value, and Quality).

Colgate-Palmolive Company (CL)

CL manufactures and sells a range of products for the personal and home care markets internationally. The company operates through two segments: Oral, Personal and Home Care; and Pet Nutrition. 

On December 11, buoyed by strong financial performance, the company declared its quarterly dividend of $0.50 per share to its shareholders, payable on February 14, 2025, to shareholders of record on January 21, 2025.

CL pays an annual dividend of $2, which translates to a yield of 2.17% at the current share price. Its four-year average dividend yield is 2.31%. Moreover, the company’s dividend payouts have increased at an impressive CAGR of 3.4% over the past three years.

During the third quarter that ended on September 30, CL’s net sales increased 2.4% year-over-year, amounting to $5.03 billion. It posted a gross profit of $3.07 billion, indicating a 6.8% increase from the prior-year quarter.

The company’s non-GAAP operating profit rose 4.8% from the year-ago value to $1.08 billion, with a non-GAAP operating margin of 21.5% (up 50 bps year-over-year). In addition, CL’s attributable non-GAAP net income stood at $750 million, up 5.6% year-over-year, while its non-GAAP earnings per share grew 5.8% from the year-ago value to $0.91. Also,

Street expects CL’s revenue for the fiscal fourth quarter (ending December 2024) to increase marginally year-over-year to $5.04 billion. Its EPS for the same period is expected to register a 3.3% growth from the prior year, settling at $0.90. In addition, it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters, which is impressive.

Over the past year, the stock has surged 19%, closing the last trading session at $92.03. It has a two-year beta of 0.24.

CL’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.

It also has an A grade for Quality and a B for Stability. Within the Consumer Goods industry, it is ranked #20 out of 55 stocks. Click here to see CL’s ratings for Growth, Value, Momentum, and Sentiment.

Sysco Corporation (SYY)

SYY sells, markets, and distributes food products to restaurants, healthcare and educational facilities, lodging establishments, and other customers who prepare meals away from home globally. It operates through four segments: U.S. Foodservice Operations; International Foodservice Operations; SYGMA; and Other.

On December 18, SYY announced a new partnership with Square to help restaurants of all sizes succeed and work smarter through powerful technology. This partnership allows customers to receive a compelling processing fee rebate and hardware credits when enrolling through SYY, which will save the business time with its easy-to-use technology.

On November 15, the company announced a quarterly dividend of $0.51 per share, payable to its shareholders on January 24, 2025. SYY pays an annual dividend of $2.04 per share, which translates to a yield of 2.65% on the prevailing share price. The company’s dividend payouts have increased at an impressive CAGR of 5.3% over the past five years. Also, its four-year average dividend yield is 2.50%. 

For the fiscal 2025 first quarter that ended on September 28, 2024, SYY’s sales increased 4.4% year-over-year to $20.48 billion. The company’s non-GAAP operating income rose 2.2% from the prior year’s quarter to $873 million. SYY’s non-GAAP net earnings came in at $540 million, and its non-GAAP EPS grew marginally from the year-ago value to $1.39.

Analysts expect SYY’s revenue for the second quarter (ending December 2024) to increase 4.3% year-over-year to $20.11 billion, while its EPS for the same quarter is expected to grow 3.7% from the prior year to $0.92. Moreover, the company has surpassed the consensus EPS estimates in three of the trailing four quarters.

SYY shares have surged 5.8% over the past six months to close the last trading session at $76.97. Also, it has a 24-month beta of 0.38.

It’s no surprise that SYY has an overall rating of B, equating to a Buy in our POWR Ratings system. It has a B grade for Value and Stability. Out of 75 stocks in the B-rated Food Makers industry, SYY is ranked #8.

Beyond what is stated above, we’ve also rated SYY for Growth, Momentum, Sentiment, and Quality. Get all SYY ratings here.

What To Do Next?

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WMT shares closed at $92.24 on Friday, down $-1.16 (-1.24%). Year-to-date, WMT has gained 77.62%, versus a 25.54% rise in the benchmark S&P 500 index during the same period.

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