Börse Express – 3 Dividend Stocks That Outperform Coca-Cola


The incredible dividend balance of Coca Cola Company (WKN: 850663) found favor with investors. Coca-Cola is about to complete a century – yes, rightly so – the consistent distribution of dividends. The company has never jumped a quarterly dividend since the 1920s. Even more impressive is that the beverage giant is the biggest king of dividends, having increased its dividend each year for 57 consecutive years.

However, with a dividend yield of 3.4%, Coca-Cola is not among the best. There are several stocks that pay better dividends and offer a good return potential. Our Motley Fool employees today selected three of these dividend shares for you: Campbell soup (Code: 850561), Duke Energy (WKN: A1J0EV) and GlaxoSmithKline (WKN: 940561).

High return, strong dividend growth potential

Neha Chamaria (Duke Energy): Coca-Cola is undoubtedly a good share of dividends, but dividend increases have been volatile. The company increased z. For example, last month's quarterly dividend was only 2.6%, compared to a 5.4% increase in 2018. What if you could buy a dividend share that not only offered a higher return than Coca- Cola, but is also committed to the steady growth of dividends?

Currently, Duke Energy offers a return of more than 4%. The concessionaire has paid constant dividends for 92 years, increasing them each year for 13 consecutive years, with the last two increases in 2018 and 2017 each around 4%. In the long run, Duke believes it should be able to raise its annual dividend by 4% to 6%, according to earnings per share. The growth of dividends should be able to support the stock return of about 4%.

The regulated nature of Duke's business is one important reason why management can confidently define financial goals. As a regulated utility, the tariff is adjusted by the government. Any price increase will also be approved by the government, provided that the company can generate the return on capital and the capital invested. Duke plans to invest approximately $ 37 billion in growth between 2019 and 2023 to modernize its power grid, expand its natural gas infrastructure and increase its share of renewable energy in power generation.

In short, Duke Energy has made plans to ensure it can raise prices regularly in the near future. As sales grow, so does revenue, cash flow, and dividends.

Potentially very good

Duprey Rico (Campbell Soup): I begin by admitting that the Campbell Soup is a somewhat controversial stock because there are still many uncertainties about your recovery plans and if they can really prevail. Analysts are skeptical, but I think the soup maker will amaze the pros.

Campbell is under pressure. It has a lot of debt – about $ 8 billion at the end of the last quarter – and very little money (just $ 203 million). Sells pieces of business with a strong discount. for which he once paid a lot. The company sold Garden Fresh Salsa for $ 60 million, despite paying $ 232 million four years ago. It also sells Bolthouse Farms, which it bought in 2012 for $ 1.6 billion, and is also missing out here. Campbell also sells its international business.

However, this is a necessary cleanup after former CEO Denise Morrison has tried to pave the way for growth. While the company is doing something similar with the recent purchase of Snyder's Lance products, the snack bar industry is experiencing strong growth, and the surprisingly strong quarterly superstore report for the second quarter was driven by the strong performance of these new acquisitions.

Daniel Loeb, a hedge fund operator, is one of the two-seat strippers on the board, and his leadership is helping Campbell Soup stabilize its core business while taking advantage of Snyder's Lance growth opportunities.

Stocks rose 20 percent from their low levels earlier in the year, and while some analysts see it as a chance to make a profit, more patient investors can remain stubborn and let recovery take shape. With a dividend of $ 1.40 per share, yielding 3.6% return, there is enough reward for waiting until the new direction emerges.

A high-risk pharmaceutical company with high returns

George Budwell (GlaxoSmithKline): British pharmaceutical company GlaxoSmithKline offers a dividend yield of 5.8%, one of the most generous payments in the healthcare industry. The attractive yield is even higher than the current Coca-Cola. But the dividend is not exactly a good reason to buy the shares of the pharmacist. Find out why.

Glaxo is a great investment in income because of its enormous income. But a closer look reveals that the company is in the midst of a major restructuring. Over the next three years, Glaxo plans to divide it into two separate units: an industry-leading consumer health business and a growth-driven controlled drug and vaccine business.

Consistent with this planned division, Glaxo has invested resources in its new portfolio of cancer drugs and its pipeline, notably Tesaro's acquisition of Zejula's ovarian cancer in 2018 worth $ 5.1 billion. Healthy food brands Horlicks last year Unilever PLC sold to accelerate its focus on pharmaceuticals and vaccines as key drivers for future growth.

While these bold moves may usher in a new era of growth, the future of Glaxo's dividend program is being seriously challenged. Glaxo's Pharmaceuticals and Vaccines business as a separate division could generate more revenue growth, but there is no doubt that a division will negatively affect free cash flows. Dividend investors should therefore be wary of this high-yield share of health care for the time being.

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Motley Fool has no position in any of the above actions.

This article was written by Neha Chamaria, George Budwell and Rich Duprey in English and published on 03/29/2019 at Fool.com. It has been translated so our German readers can participate in the discussion.

Motley Fool Germany 2019


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