I have a few things in my portfolio that are kind of hard to classify, so I’ve just included them under the category, “Consumer Staples.” They are things that consumers buy, usually habitually and over long periods of time.
1. Kimberly Clark (KMB): 4.8% of my portfolio. Everyone uses things from this company: tissues/feminine products/baby stuff, etc, which is basically the reason that I bought it. This company is one of the most “recession-proof” companies you could own, since people will always use toilet paper at home; companies will always have to keep their bathrooms stocked with it and babies will continue to be born even in bad financial times. They have a long history of increasing dividends and currently pay 3.1%.
2. Coca-Cola (KO): 1.3% of my portfolio. Everyone knows this company, and similarly to Kimberly Clark, they have a long history of increasing dividends and are basically recession-proof. I’m looking for a drop and will buy a lot more (bringing it up to 5-6% of my portfolio). It’s expensive right now with a P/E ratio of over 20.
3. McDonalds (MCD): 7.6% of my portfolio. In terms of investing in fast-food restaurants, MCD is by far the best option. It’s a well-run company with a good financial model (ie: franchisees take much of the risk). They have a history of steadily increasing dividends and the future looks bright for them, with lots of untapped markets.
Here’s my complete list of Dividend Stock Investments.