If you are looking to build your wealth, one of the easiest ways is to buy reliable dividend stocks. One of the best places to find reliable dividend stocks is the consumer staples sector. Luckily for you, some of the most iconic consumer staples stocks look like they are on sale right now, including General Mills (GIS 1.79%), Clorox (CLX +1.64%), and PepsiCo (PEP +0.70%). Here's a look at each one.
General Mills is facing headwinds -- and it's OK
Wall Street tends to think very short term, which is great news for investors with the wherewithal to think long term. Specifically, General Mills, one of the largest packaged food makers on the planet, is seeing a slowdown in its business. Sales dropped 2% in the fourth quarter of fiscal 2025. Thus, investors are shunning the stock, pushing its dividend yield up to a historically high 4.8%.
NYSE: GIS
Key Data Points
General Mills stands toe to toe with any of its peers as a business. It has a strong brand portfolio, it has an impressive innovation track record, and it has top-notch distribution and marketing strength as well. Right now, performance is weak because of shifting consumer trends and buying habits. That's not unusual -- the company is used to adjusting with the times. That's how it has managed to pay a dividend for 124 years.
Although the dividend has not been increased every year, it has trended generally higher for decades. Unless you believe that people are going to suddenly stop eating, General Mills is probably going to find a way to get back on the growth track. It has done exactly that many times before over the past century or so.
Image source: Getty Images.
2. Clorox is getting its margins back
Clorox is a bit different from General Mills. While General Mills is focused on food, Clorox is focused more on brands and categories where it believes it can be a sector leader. That has resulted in an eclectic brand portfolio that includes Burt's Bees, Brita, Glad, Hidden Valley, Fresh Step, Kingsford, and, of course, Clorox, among many others. In a few key niches, Clorox is the only branded product in the category, meaning it is the driving force for the product category.
It is an attractive model and has worked well over time. Clorox has increased its dividend annually for 48 consecutive years, two shy of Dividend King status. The dividend yield is historically high right now at around 3.8%.
NYSE: CLX
Key Data Points
One of the big problems for Clorox has been the fact that its margins got crushed after the coronavirus pandemic. That said, management has been working hard to fix that headwind and achieving material success. The company's gross margin has improved by around 10 percentage points from the low it saw in 2022. Cost cutting, streamlining, and innovation have all played a role. But the big picture is that Clorox isn't some fly-by-night consumer staples company. It's a proven survivor that has a high yield despite the success it's showing as it works to get its margins back.
3. PepsiCo is already finding new ways to grow
PepsiCo is another food maker, with a heavy focus on beverages (Pepsi) and salty snacks (Frito-Lay). It also makes packaged foods in its Quaker Oats business, but that's a smaller operation. Right now the company is a bit out of step with customers, and its growth has been lagging that of its most notable peers, including Coca-Cola (KO +0.73%). That has left investors shunning PepsiCo stock in favor of those peers.
This is a buying opportunity, considering the historically high 3.9% dividend yield. Like General Mills and Clorox, PepsiCo is an industry leading company when it comes to its competitive position. But even great companies go through hard times. The question is: What does a company do during the hard times? In PepsiCo's case, the answer is hunkering down and using the same playbook that has been so successful throughout the company's history.
NASDAQ: PEP
Key Data Points
The list of things PepsiCo is doing includes innovation, business optimization, and buying new brands to refresh its brand portfolio. These aren't exactly exciting things -- they're just business as usual. But that's how PepsiCo has become a Dividend King with over five decades of annual dividend increases behind it.
When times get tough, PepsiCo doesn't flinch. It just keeps operating at a high level. History suggests that the beverage and snack giant will eventually get back on track. If you buy today, you can collect a lofty yield while you wait for better days.
It's easy to own great businesses
The hard part with General Mills, Clorox, and PepsiCo is getting past each company's less-than-impressive recent business performance. To do that, simply focus on how well these companies have been run over the long term. Then you can easily justify buying these historically high-yielding stocks. What you get to do after that is sit back and collect big dividend checks while you wait for better days. History suggests that, given time, each of these iconic consumer staples makers will reward you well.
