Dividends are an attractive feature of many stocks, and for some investors it is a prerequisite. But not all dividends are equal, as evidenced by the pandemic. Coca-Cola (NYSE: KO), Procter and Gamble (NYSE: PG), en American Express (NYSE: AXP) all have sustained their dividends through COVID-19, and they will pay it for the foreseeable future.
The classic taste of staying at home
Coca-Cola has made it a priority to maintain its dividend throughout the pandemic, despite declining revenues. Coke is an Aristocrat of Dividend, meaning he has been raising his dividend for more than 25 consecutive years.
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Sales fell to 28% in the second quarter ending June 26, but have continued to improve since then, declining to 5% in the fourth quarter to December 31.
Closures and closures contributed to a major slowdown in the company’s sales, and it quickly brought about changes in the operations to better compete in the new shopping sphere. It has been restructured into what it calls the network organization model, which is intended to standardize and simplify operations with a focus on technology and digitization.
Coke still has a war chest to spend on dividends and incite new projects. It showed cost-effectiveness in the fourth quarter and strong cash flow. Although there has been progress since the initial outage of COVID-19, the market environment has not completely changed, and investors cannot really improve in the short term. But in the long run, Coke still has great prospects.
CEO James Quincy said: “There is uncertainty about the timing and eventual solution, but we will continue to prioritize investing in the company to promote long-term growth, as well as to drive dividend growth for our shareholders. support.” The Coca-Cola dividend yields 3.2% and shareholders can have confidence in a continuing dividend, as evidenced by management’s behavior during the pandemic.
The world’s leading care brands
Procter and Gamble is in the exclusive Dividend King group, which means that it has increased its dividend annually for more than 50 years – in this case 64 years.
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The company operates in ten daily categories with consumer brands such as Tide Detergent, Crest Dental Care and Pampers Diapers. It is a $ 72 billion market leader in annual sales in 2020, but is committed to innovation and digitization to maintain its dominant position.
As you would probably guess, Procter & Gamble had some of the best quarters in many years because people stayed at home and had self-catering and home-care products. In the second quarter ended December 31, sales increased by 8%. The highest growth was fueled by home care products, which rose by 30%. Oral care and family care were double digits higher, and other categories increased by single digits.
Growth is likely to slow as the pandemic declines, but sales should continue to increase. The company is focused on meeting the new demand with digital capability, and e-commerce rose by almost 50% in the second quarter.
Procter & Gamble shares had a run-up during the pandemic, dropping returns, which are usually around 3%; it is now about 2.4%.
An established brand with fintech capabilities
American Express has paid a dividend for the past 32 years, but it did not increase it in 2020. Sales fell 29% in the second quarter, which was the worst of the company during the pandemic, but revenue remained positive and fell 85% to $ 0.29 per It improved to a 20% decrease in the third quarter, and a slight decrease of 18% in the fourth quarter to end-December. Revenue improved significantly to $ 1.76, a 13% decrease from the previous year.
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Non-travel and leisure spending has already exceeded pre-pandemic levels, but American Express has a large portion of travel and leisure spending, which still weighs because the pandemic has not yet been defeated. American Express has a differentiated business that focuses on high wealth customers, who pay as much as an annual fee of $ 550 (or $ 5,000 for the invitation to the black card), are very loyal and spend extra money, even during a economic downturn. .
It is also its own credit card processor and bank – unlike most other credit cards issued and processed by different banks Visa or Mastercard.
American Express is one of the oldest companies in the US, but uses financial technology to empower small businesses and create a best customer experience. It acquired fintech company Kabbage in 2020 to give customers a range of digital banking options, and the digital restaurant reservation app Resy in 2019 for more customer benefits.
American Express shares are the only stock on this list with gains so far in 2021, and the dividend yields about 1.3%.