5 Long-Term Consumer Discretionary Dividend Stocks to Hold
Building a dividend portfolio? You’ll want to make consumer discretionary dividend stocks a cornerstone of your holdings. Why? Because this sector is home to some of the strongest, most prolific public companies. What’s more, they offer some of the strongest dividend prospects out there. Dividend payers from this sector are the definition of “blue chip” investments, and will be lifelong additions to your portfolio, no matter the state of the economy.
Before we get into the five strongest consumer discretionary dividend stocks on the market, it’s important to explain why these are such strong recommendations. Several of them are dividend aristocrats. They’ve raised or maintained their dividend for at least 25 consecutive years! The other two on this list have paid a healthy dividend for more than a decade.
These recommendations aren’t just strong companies—they’re the safest, strongest dividend-payers. Each of them deserves strong consideration in your long-term, forward-looking dividend portfolio.
Best Consumer Discretionary Dividend Stocks
1. Johnson & Johnson (NYSE: JNJ)
Dividend yield: 3.2%
It’s difficult to compete against Johnson & Johnson when the conversation turns to dividends. While it’s technically listed as a healthcare company, its roots are actually in the consumer discretionary sector. Today, it still produces a substantial range of consumer products that make it more than applicable for a consumer discretionary focused portfolio. With everyday brands like Tylenol and Neutrogena under its belt, alongside Splenda, Listerine and dozens of others, Johnson & Johnson is in nearly every American household.
JNJ not only pays a healthy dividend, it’s been doing so for more than 55 years straight! If you’re looking for long-term stability in your dividend portfolio, this stock is an unquestioned addition. More importantly, its prospects for the years ahead are glowing thanks to its involvement with the COVID-19 vaccine, investments in skincare products and incredible balance sheet.
2. McDonalds (NYSE: MCD)
Dividend yield: 3.1%
McDonalds is one of the few dividend-paying stocks that many experts consider “recession-proof.” History has shown us that, no matter how hard times get, people will still always have a few bucks in their pocket for a burger. It’s why McDonalds has been able to pay a dividend consecutively for more than 40 years. It’s the definition of a consumer discretionary stock—and a lucrative one, at that!
McDonalds isn’t just a great performing stock, it’s also a hedge against domestic economic troubles. McDonalds has locations in more than 100 countries, making it perhaps the most globally diversified company in the world. Today, it’s also aided by the rise in fast food delivery trends, as well as its diversified menu. Burgers, chicken, salads, coffee and more are all high-margin products that people can’t get enough of. Your portfolio won’t be able to get enough, either!
3. Home Depot (NYSE: HD)
Dividend yield: 3.2%
Home Depot faces very few large-scale competitors outside of Lowes (NYSE: LOW). This moat has made it the go-to destination for everyone from carpenters and electricians to gardeners and painters. And while it carries significant inventory, the company has been on the leading edge of omni-channel inventory management. It’s able to maintain a strong brick-and-mortar presence, while making ship-to-store and ship-to-customer seamless experiences. HD is winning as it rides long-term trends.
Home Depot benefits from the aging housing stock in the U.S., as well as inflated home values. Fewer homes built each year means more upkeep and renovations for aging inventory. Contractors and DIYers alike head to their local Home Depot for tools, supplies and resources. Home Depot may not be a dividend aristocrat, but it’s well on its way there. It deserves significant consideration for a defensive consumer discretionary portfolio that focuses on dividends.
4. PepsiCo (NASDAQ: PEP)
Dividend yield: 3.3%
If you think PepsiCo is only a soft drink brand, guess again. This dividend aristocrat has paid a dividend for almost 50 straight years because of its ability to adapt. Today, it owns dozens of subsidiary brands, including Lays, Gatorade, Tostitos and more. PepsiCo dominates several aisles at the grocery store, making it the epitome of a consumer discretionary brand. That said, it maintains low price points and a constant stream of innovation, encouraging customers to make this stock a winner year after year.
While there’s a strong consumer shift away from sugary treats and soft drinks, PepsiCo is already ahead of the curve. The company’s investments in health foods and new formulations has given it staying power even as it faces headwinds. PepsiCo and fellow behemoth Coca-Cola Co. (NYSE: KO) are both safe long-term dividend stocks representing consumer staples.
5. Nike (NYSE: NKE)
Dividend yield: 1.4%
Few brands rival Nike in the world of consumer discretionary companies, and none come close in the apparel arena. Nike’s presence is global, which means it welcomes income from around the globe. It’s synonymous with athletics and athletic fashion, and has brand ambassadors in every major sport around the world. This core brand strength has aided the company in both bear and bull markets, to make it a stable long-term investment.
Surprising for a company of its size, Nike actually has room to run (pun intended). China represents a major growth market, and Nike is already seeing major traction. The company has also expanded into apparel-adjacent markets, including tech and health, with strong partnerships that could propel it forward for another decade to come. It’s a long-term hold that will continue to pay dividends.
The Long-Term Advantage of Consumer Discretionary Dividends
Dividends are a great way to build passive income to set yourself up for retirement. And Wealthy Retirement’s Marc Lichtenfeld provides daily stock updates and dividend breakdowns to help you retire on your own terms. Therefore, sign up for the Wealthy Retirement e-letter below.
Consumer discretionary dividend stocks are some of the strongest dividend payers across all sectors. Whether you’re building a dividend portfolio or diversifying into the sector, any of the above five companies deserve a spot. While there’s no such thing as a sure thing in investing, these companies are about as close as you can come. You’ll love their long-term prospects for your portfolio.