Invest in What You Know… or at Least What You Like

Kelly Green
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March 27, 2024
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Comments

There’s a lot to be said for investing in things you know or like. It lets us connect a little more with our investments.

It’s also fun to think about your dividends as rebates on items that you already buy. Even more fun is when your dividend pays your bills.

I’ve talked before about why AT&T (T) is my favorite US telecom investment. A single-line plan at AT&T starts at around $65 a month, or $780 per year. The stock pays a generous 6.5% dividend yield. Meaning, if you own 702 shares of AT&T the dividend would cover your phone bill every month! And over the long run, you’d accumulate capital gains on your shares.

The same thing would work if you own shares of my favorite oil pipeline company Enterprise Products Partners (EPD). Its dividend of just under 7% would give you some extra gas money throughout the year. Who doesn’t need that?

This is also a great way to get the whole family involved in investing, especially if it’s a brand or solution near and dear to the family.

We Pay More for Dietary Restrictions and Preferences

I was diagnosed with celiac disease in 2011. Back then, there wasn’t a lot of mainstream attention given to gluten-free products. And it was nearly impossible for me to eat out. Now there are a ton of options.

The global gluten-free market size was estimated at $6.5 billion in 2022. It’s expected to grow 10% annually from 2023‒2030. Some estimates show the market reaching $15.1 billion by 2032.

Many gluten-free products are also keto or paleo to meet those dietary preferences. And many of the gluten-free choices are from smaller, privately owned or non-US companies.

So, I took a look around to see if I could find a good gluten-free dividend stock. Most of these companies that pay a dividend are big consumer staples players and not just gluten-free plays.

For example, Campbell Soup Co. (CPB) has hundreds of gluten-free products across its brands. It’s the parent company of Swanson that offers a wide range of broths and stocks that have been rigorously tested to ensure they do not include gluten. Other brands like Snyder’s of Hanover and Pretzel Crisps also offer gluten-free options.

CPB has annual revenue of $9.2 billion and currently pays 37 cents per share every quarter. Although it hasn’t raised the dividend since the beginning of 2021, it has paid a dividend since 1989. Unfortunately, at its current share price, the annualized yield is just 3.4%, which does not hit my 3.5% minimum.

There’s also Mondelez International, Inc. (MDLZ) which recently announced it will make gluten-free Chips Ahoy!. The company already has gluten-free Oreos and continues to add to the available flavors. Here again, MDLZ pays a dividend of just 2.4%.

So, What Is My Favorite Gluten-Free Dividend Payer?

Like the two companies above, Flowers Foods (FLO) isn’t exclusively a gluten-free company. They are actually the parent company of legacy brands Tastykake and Wonder Bread. The company holds roughly a 17% share of the US breads market, and 6.3% of the cakes market.

That’s really nothing to write home about.

More impressive is the fact that it holds a 74.7% share of the organic bread market and 34.5% share of the gluten-free bread market. They do this with brands like Canyon Bakehouse and Dave’s Killer Bread. The latter hit a record $1 billion in retail sales last year.

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FLO’s brands generated a record $5.09 billion in sales in 2023, up 5.9% from 2022.

The company has paid a dividend since 1987 and raised the payout for the last 22 consecutive years. We should expect to see another increase with the June payment. It’s current quarterly payment of $0.23 equals an annualized yield of 3.9%, pretty decent for a consumer staple stock.

Now, Flowers Foods isn’t an official recommendation. But if you’re looking for gluten-free dividends it’s one of my favorites. And if gluten-free isn’t your thing, I definitely recommend checking if the parent company of your favorite brands pays a dividend.

I want to add that knowing where the economy and markets are likely headed also pays big dividends. And that is exactly what you will discover at the 20^th Anniversary Strategic Investment Conference. Over 40 experts in economics, geopolitics, and technology will present over this five-day virtual event. Details and an early discount are available here.

For more income, now and in the future,