Are you searching for reliable, above-average dividend income? Consumer goods stocks are an ideal place to look. The world always needs food, cleaning supplies, and personal-care products, and will purchase them over and over again.
One dividend-paying consumer staples name worth considering is packaged foods company Kraft Heinz (KHC -0.15%), created from the 2015 merger of Kraft Foods and H.J. Heinz.
Before diving into this dividend stock, however, there are a few numbers you'll want to know.
Kraft Heinz's dividend payment profile
The Kraft Heinz quarterly dividend currently stands at $0.40 per share. The annualized payment of $1.60 translates into a trailing-12-month dividend yield of 4.9%, which is stronger than most yields of similarly sized businesses in the same sector.
The company can afford these payments, too. It earned $2.98 per share in fiscal 2023, up slightly from 2022's adjusted per-share profit of $2.78. Its payout ratio is a slightly elevated but still manageable 69.5%.
There is one downside to holding Kraft Heinz as a dividend-paying investment, however: The dividend isn't growing. The quarterly payout has been stuck at $0.40 per share since early 2019 when the company began regrouping from what -- in retrospect -- can only be considered a disappointing union of two consumer-staples leaders.
Kraft Heinz's not right for everyone
Just because Kraft Heinz isn't regularly raising its dividend now doesn't mean it won't do so in the future. Indeed, it is more profitable (and consistently so) than it has been since shortly after the two food companies became one. It hasn't been in a better position to grow its dividend payment in several years than it is now, with continued profit growth in the cards.
But neither management nor any analysts are even discussing the prospect of a dividend increase for the foreseeable future. Given that, Kraft Heinz might only be appropriate for those who need a healthy yield on their investment right now but don't need any dividend growth anytime soon ... if ever.
