Planning and preparing a Thanksgiving feast is a lot of hard work.
And after all the inflation we’ve seen over the past year, this year’s Thanksgiving dinner may very well end up being the most expensive meal you’ve ever had to prepare.
I can’t help you roast a turkey, mash potatoes, or make a perfect bowl of gravy… (My wife would be the first to tell you I ought to stay out of the kitchen during holiday meal preparations.)
But what I can do is this: Teach you how to turn that tasty Thanksgiving spread into a stream of reliably increasing passive income.
See, many of those staples on the Thanksgiving table come from blue-chip dividend growth stocks from within the food industry.
And today, I’ll share some examples of what those stocks are, how they boost sales during this season, and how those sales can result in income for shareholders.
Staying Ahead of Inflation for Years
Thanksgiving season or not, people always have to eat. This makes food stocks a defensive place to park cash.
That’s how many dividend investors – myself included – will be able to sit back and enjoy their meals, rather than stress about rising costs. Because they receive dividend payments resulting from all the profits generated from frozen turkeys.
And they’ve been doing it for years… Thanks to the safe and secure business models that exist in this relatively defensive area of the stock market.
Furthermore, the dividend deposits from the best food and beverage companies have been rising for decades. And that reliable dividend growth allows investors to combat inflationary trends over the long term.
My favorite dividends have compounded at a rate well above inflation for years.
This protects the purchasing power of an investor’s passive income stream.
Here are some safe and reliable investments you can look for on your Thanksgiving tables as a source of inspiration this year…
Decades of Growth in the Food Industry
For instance, Hormel (HRL) is a long-time favorite stock of mine.
It’s a protein-centric company that’s been around since 1891. For decades, Hormel has been known for its pork and turkey sales.
Hormel’s Jennie-O Turkey brand produced approximately $1.5 billion in sales last year, equating to about 13.3% of Hormel’s overall sales.
Jennie-O is the second largest turkey brand in the world, behind Butterball. (Butterball, however, is owned by Maxwell Farms, which is not publicly traded.)
So someone looking to add exposure to turkey sales in their investment portfolio should look to Hormel, which has produced outstanding historical returns – as I’ll show in a moment.
Another food company getting a boost from Thanksgiving sales is the largest spice/seasoning company in the world: McCormick (MKC).
McCormick’s famous red caps dominate shelf space in the spice aisle at your local grocery store. Its brand recognition allows it to charge premium prices for its goods.
The combination of market share dominance and strong pricing power has allowed McCormick to produce positive earnings-per-share growth during each of the last 20 years.
Currently, Hormel shares offer investors a dividend yield of 2.16%.
McCormick shares yield 1.78%.
These yields might not seem like much, but they’re only low because of the strong historic capital gains these two stocks have posted… not a lack of generosity by management.
Hormel shares are up by more than 213% during the last 10 years.
And McCormick is up by 150% over the last decade.
High share prices result in low dividend yields, but that’s a nice problem to have for shareholders. And moving forward, there’s no indication the reliable dividend growth these two companies provide is going to stop.
Hormel has established an annual dividend increase streak of 54 years. And its five-year dividend growth rate is 8.9%.
McCormick is on a 35-year dividend increase streak. Its five-year dividend growth rate is 9.5%.
With inflation coming in around 7.6% these days, both these stocks continue to provide nice portfolio protection.
Both Hormel and McCormick are dividend aristocrats with low payout ratios and strong balance sheets. That’s why I expect to see sales of turkeys and spices help them continue to raise their dividends for decades to come.
This year, I’m sure I’ll hear a lot of fear and anxiety about high inflation and the threat of recession around the Thanksgiving table.
Regardless of the macro environment, anytime someone asks me how I’m holding up, my response is a simple one…
“Great!”
Why is that?
Because of the safe and reliable dividends the companies I own pay.
The stock market is down double digits during 2022 thus far… Yet my dividends continue to increase.
I’ve found that safe and reliable passive income is a remedy for most forms of market-related anxiety.
And our Intelligent Income Investor service is full of some of the best dividend-paying stocks in the world. They span various industries and have been around for decades. They’re exactly the kinds of stocks that can generate income and help us sleep well at night, even if we get another year like 2022.
To learn how to get access to this list, click here.
This Thanksgiving, I’ll be sleeping well at night with a belly full of turkey, feeling incredibly thankful for many things – including my passive income stream.
Happy SWAN investing,
Brad Thomas
Editor, Intelligent Income Daily