Hidden Dividends in Our Family Traditions

Kelly Green
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November 27, 2024
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Comments

The holidays are a time for friends and family and food and treats. Over half of Americans are expected to host family and friends for Thanksgiving. And most hosts take up to two weeks to plan and cook.

I’ll be heading to a friend’s house in West Palm Beach, an easy 40-mile drive. The grill master, her boyfriend, has been obsessed about what type of wood to use in the smoker for the turkey and ham. And there’s a rumor that the gluten-free mac and cheese has a spot in the smoker as well.

According to LendingTree, hosts will spend an average of $431 on Thanksgiving food, drinks, and decor. This is up 19% from last year. Despite cooking entirely too much food for just the three of us, we will definitely spend less than that estimate.

Either way, the reality is that a lot of money is spent on Thanksgiving, followed by an equally lavish table and bar outlay for Christmas.

There are a handful of companies that are going to benefit. So, I searched for some solid dividend payers that will likely be served on the average Thanksgiving table.

The Center of Attention

Roughly 293.5 million people will eat turkey tomorrow. And those birds will cost Americans about $983.3 million, down from the $1.2 billion spent last year. That’s still a lot of dollars devoted to the iconic centerpiece for your Thanksgiving feast.

Can we lock in some turkey dividends?

It’s estimated that one of every three whole turkeys bought at Thanksgiving is sold by Butterball LLC. This poultry powerhouse is owned by publicly traded company Seaboard Corp. (SEB).

SEB is an interesting company as it has its hands in a little bit of everything. Its top businesses in addition to turkey are pork products, containerized marine shipping, grain processing, independent power production, and sourcing jalapeno peppers.

That’s a crazy mix and must make sense to someone somewhere. And it seems to be working as the company raked in $2.2 billion in net sales for the third quarter. SEB also declared a third-quarter dividend of $2.25. However, that’s an annualized yield of just 0.34% based on a share price of $2,654. Definitely not enough yield for us.

If you didn’t buy a Butterball turkey there’s a good chance it’s from Jenni-O, which is owned by Hormel Foods Corp. (HRL). This food giant sells products in more than 80 countries, including over 90 million jars of Skippy peanut butter every year.

HRL pays a quarterly dividend of $0.29 per share for an annualized 3.7% yield. This is based on the higher dividend the company just announced on Monday and will be paid in February 2025. It also marks HRL’s 59th consecutive annual dividend increase.

Yep, HRL is both a Dividend Aristocrat and Dividend King. The company is the clear winner if we’re looking for dividends from holiday turkey.

And All the Fixings

The turkey may be the star of the feast, but Thanksgiving dinner would be nothing without the sides and desserts. And I found some dividend payers among these brands as well.

According to Jennie-O’s Thanksgiving survey, the most popular side dish is stuffing. My grandma taught me how to make stuffing from scratch before I was even tall enough to see over the kitchen counter. And over 30 years later, I will be the stuffing chef at my friend's house this year.

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If you’re looking for a dividend stock that could benefit from fresh stuffing makers, I’d look at Flowers Foods, Inc. (FLO). It’s the parent company behind Wonder Bread, Nature’s Own, Dave’s Killer Bread, Sunbeam Bread, and Canyon Bakehouse for your gluten-free guests like me. It also owns Tastykake brands if you’re serving Krimpets for dessert.

The Georgia-based company currently pays a quarterly dividend of $0.24 for an annualized yield of 4.2%. On top of that, the company has raised its dividend for the past 22 consecutive years. Shares have been essentially flat year to date. So if you’re considering adding this one to your portfolio, focus on the dividend and not share growth potential.

Lastly, if you’re not going to make your stuffing from scratch, you’re probably going to reach for the Stove Top stuffing mix. Stove Top is owned by Kraft Heinz Co. (KHC) and sells about 60 million boxes during the holiday. The company also owns Cool Whip, Jell-O, Philadelphia cream cheese, Grey Poupon, and Velveeta. Any or all of these might find their way into your Thanksgiving spread.

The company has paid $0.40 a quarter dividend for an annualized 5% yield since March 2019. At that time, it was a cut from the previous $0.625 per share dividend which was part of a string of annual increases. The dividend has not been raised since then, and shares have been essentially flat since then as well.

Still, a 5% yield could make a great income stream for your portfolio. And if the company begins to raise its dividend, I would seriously consider KHC as a Bedrock Income position.

While none of these are official recommendations, every dividend portfolio should have consumer staples like those above. And I think it’s always a fun little bonus when you actually enjoy the products of a company that is in your portfolio.

For more income now, and in the future,

Kelly Green

P.S. Yesterday, I sent my latest recommendation to my premium Yield Shark readers. It’s not a consumer staple, but it is a Bedrock Income position that I think we’ll be able to hold for years or even decades to come. If you want all the details and the full Yield Shark open portfolio, click here for more info.