Dividend Investing For The Sweet Tooth

Do you have a sweet tooth? Are you constantly craving the sweet taste of cookies, candies, biscuits or chocolate? Have you ever thought about some of the companies that produce your favorite sweet treats? Well today I want to share with you five dividend paying companies that deliver sugary quarterly payments that’s sure to satisfy those sweet tooth cravings.



First up is fairly recent Kraft stock spin off Mondelez International, Inc. (MDLZ). MDLZ, known for many of its sweet offerings, including Cadbury, Oreo, Milka, Trident and LU biscuits, to name a few, offers a relatively low yield at 1.50% with a low payout ratio of only 32.6%. By any measure this dividend remains safe based on current cash flow. In terms of PE, MDLZ has a forward valuation of 19.2 making it pretty much fully valued at current prices. MDLZ represents much higher international growth from its snack foods business compared to parent Kraft which may explain the relatively higher PE. Investors always love to pay for future growth.


Next is a candy company that really needs no introduction as its namesake product has surely been eaten at least once by all of us, Tootsie Roll Industries Inc. (TR). Besides its widely known namesake product TR also produces Charms, Blow Pops, Dubble Bubble, Charleston Chew, Sugar Daddy, Sugar Babies and of course the ever popular Junior Mints to name a few. While you might be familiar with some or all of the Tootsie Roll candy products you might not know that TR is also a coveted dividend aristocrat having paid rising dividends every year for over 48 years! TR currently yields a low 1.10% but has managed an average 8.60% annual dividend growth rate for several decades. TR has a payout ratio of only 31.2% for the trailing twelve months which means it can continue to pay out an increasing dividend in the future. While TR has a long dividend history it remains quite pricey as the current PE stands at 28.5 which is very rich compared to the S&P and its peers.


Of course, when talking about candies and sweets one cannot forget chocolate giant The Hershey Company (HSY). HSY has a long dividend history going back several decades with rising dividends going back four plus years. We are all familiar with HSY’s famous namesake product but did you know The Hershey Company also produces many famous candies such as Twizzlers, Jolly Rancher, and Ice Breakers and Reese’s to name a few. Currently offering a moderate yield of 2.00% with an equally moderate payout ratio of 47.2%, HSY has room to continue growing its dividend based on current cash flow. HSY has also been a great dividend grower over the years too having increased its dividend every year for three decades except during the financial crisis in 2008 – 2009 when dividends were held steady. Still, despite missing a couple years of dividend growth HSY managed to deliver a very high 10.26% annual dividend growth rate. HSY seems to be another quality company that is richly valued with a PE of 26.7. Better wait to pull the trigger on this one.


Our next sweet tooth company may need a little introduction, Snyder’s-Lance, Inc. (LNCE). You might know their namesake pretzel product Snyder’s of Hanover but did you know that LNCE also produces sugar wafers and Stella D’oro cookies among many other salty snacks too. LNCE currently pays a decent yield of 2.40% with a moderate payout ratio of 52.5%. Though LNCE has been paying a dividend for over 25 years it is not a traditional dividend grower having kept dividend payments steady for many, many years. On a valuation basis LNCE currently has a PE of 25.3 also making this stock a little too rich at current prices.


Finally, another great, sweet, dividend paying food company that needs no introduction is Kraft Foods Group, Inc. (KRFT). KRFT’s sweet products include Jell-O, Cool Whip, Jet-Puffed, Kool-Aid, Country Time and Capri Sun to name a few. KRFT currently yields a high 3.60% with a moderate payout ratio of 65.6%. Perhaps one of the best things going for KRFT these days is its low PE of only 12.83 putting it below the S&P and its peers making it a relative bargain in today’s high valuation market. Granted KRFT does not have the high growth prospects like its spin off MDLZ but it does represent decent value in the market today.


Looking to sweeten your portfolio with some of the mentioned dividend stocks? Let me know if you have or plan to buy any of these sweet dividend payers.


Disclosure: Long MDLZ, KRFT

Image courtesy of: Sira Anamwong at FreeDigitalPhotos.net

23 thoughts on “Dividend Investing For The Sweet Tooth”

    • Hi DearDiv,

      KRFT seems to be one of the few relative bargains in the market today and with that juicy yield I know a lot of the bloggers have it on their watch list too.

    • Hi DGJ,

      Keep an eye on KRFT. There aren’t many individual stocks left that present a decent value in the market today.

    • Hi DH,

      Thanks for stopping by and commenting. KRFT definitely seems to be the popular pick from the blog post. I’m guessing it’s the yield.

  1. DivHut,

    I know it may be a surprise coming from me, but I like MDLZ the best of the group. As an income investor the yield is too low, but strictly observing each of the businesses MDLZ look like the best growth company. As a side note, if Kraft gets back to 4% I will be all over it.

    My Dividend Pipeline recently posted…Weekly Run LogMy Profile

    • Hi MDP,

      Always good to hear from you and get your perspective. No doubt MDLZ has huge international growth in front of it after the Kraft spin off. I totally agree with you in this case. Looking for growth and increasing dividends think MDLZ… looking for less growth but stability and higher current yield go with KRFT. Thanks for stopping by!

  2. DivHut,

    Nice rundown!

    I like KRFT and MDLZ the best out of this bunch, and for different reasons. KRFT offers you a bit more income now, while MDLZ offers much better growth prospects. If I remember correctly, KRFT management stated they were looking to grow the dividend in the mid single digits, so 5-6% growth on top of a 3.6% yield isn’t bad.

    Best wishes!
    Dividend Mantra recently posted…Blogging About Blogging?My Profile

    • Hi DM,

      You hit it on the head! Want current relative high yield go with KRFT and the low growth mature grocery business. Want more growth go with lower yielding MDLZ and its growing international snack food business. I wonder why TR doesn’t get more love. From what I have seen TR has returned some pretty good numbers for many, many decades. As always, thank you for stopping by!

  3. I really like the growth potential for MDLZ. I have them on my watch list and I am thinking of adding a position before the ex-dividend date 6/26/14. This way I can collect on the dividends. I agree with DP with the yield being low but I think they will continue to increase growth/dividends in near future. This is a good one to hold on to for 10+ years.
    DividendMongrel recently posted…Loyal3 Recent Stock Purchases DPS, WMT, DNKNMy Profile

    • Hi DM,

      I happen to agree that MDLZ is a better long term growth play when compared to KRFT. Basically, ask yourself, if choosing one or the other, do you want high yield now (KRFT) or high growth (MDLZ). Personally, I happen to like both plays and own both in my taxable and ROTH accounts. Thanks for the comment.

  4. It never occurred to me that tootsie rolls weren’t made by one of the big candy players. I’ll have to take a peak at TR and do a little research. I have looked at KRFT before, but wasn’t ever ready to buy it. I can’t remember why. I already have two food companies (K,GIS), I am not sure I really want to add another.

    Nice list though… time to get a candy bar!

    Take care!
    ILG recently posted…Loyal3 Purchase: TargetMy Profile

    • Hi ILG,

      TR is one of those dividend aristocrats that you never really hear about. Even though you own K and GIS you should still consider KRFT. It is a great long term dividend payer has a relatively low PE in today’s high priced market and has a pretty juicy yield. Enjoy that candy bar! Thanks for stopping by.

    • Hi AG,

      KRFT seems to be the popular pick among the companies mentioned. I like it a lot as well and may be adding more this month. Thanks for stopping by and commenting!

  5. DivHut,
    I was curious when you asked if I had a website on DGI’s site (hope you saw my reply). I will be checking your portfolio out shortly.

    Nice article. I’m long KRFT and HSY. I felt lucky to pick up KRFT for less than $54 a while back. HSY is a small position that I will increase on a significant pullback (20% or more). Would love to add MDLZ to my portfolio.

    • Hi KeithX,

      I did not see your reply on the DGI site. I like to see other portfolios from the financial bloggers out there which is why I asked if you have a site too. Glad you enjoyed my sweet tooth article. As you can see from the site I like to break down dividend investing stories into themes. I still like KRFT even at today’s levels. I know it’s a low growth stock but it does have a nice yield. MDLZ was a result of a spinoff but I too would like to add to that stock as well. Thanks for stopping by. Hope to see you here often 🙂

  6. DivHut – I guess I’ll add to the sentiments of many others out their…KRFT appears to be the consensus winner here. Rightfully so as they have many well-known products that individuals and families buy over and over. One has to also like the attractive yield and current P/E too. I think I may have to give KRFT some serious thought after reading this post. 🙂

    Thanks for sharing. AFFJ
    A Frugal Family’s Journey recently posted…2-YEAR Collection of Stock Analyses!My Profile

    • Hi AFFJ,

      KRFT is popular for the reasons you mention. In the market today with so many stocks having sky high PE’s it’s tough finding that relative value. KRFT has a very generous current yield and a relatively low PE making it a consideration for any portfolio these days. Thanks for your comment.

  7. I know many people who have invested and earned amply form KRFT dividends. I might just start looking into investing in it too.I just need to learn a few more things about it.

    • Hi JB,

      Well KRFT is now KHC after the buyout with Heinz. It’s still a great consumer staple in my opinion though may not offer as much growth potential as its spin off MDLZ. If values and yields become more attractive I wouldn’t mind adding more to that name myself. Thank you for commenting.


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