3 Sweet Dividend Stocks to Buy for a Satisfying Passive Income Stream

The US has a sweet tooth. Americans consume 34 teaspoons of sugar each day, according to the US Department of Agriculture. That’s more than £100 each year.

Eating so much sugar is not healthy. However, this sugar addiction is great for the results of companies focused on the manufacture of sweet drinks, desserts and snacks. They generate billions of dollars in profits every year. Many pay a large portion of their earnings to investors through dividend income.

Because of this, sugar stocks can be a great way to generate passive income. Coca cola (K.O 0.58%), Hershey (HSY 0.71%)and Mondel (MDLZ 1.53%) offer sweet dividends that can help satisfy any investor’s desire for passive income.

Add some pop to the passive income

Coca cola has an elite record of paying dividends. The drinks giant posted its 62nd consecutive annual dividend increase at the start of 2024, increasing its payout by 5.4% from the previous year. level. That kept Coca-Cola in the elite group of Dividend kingscompanies with 50 or more years of consecutive dividend growth.

Last year alone, Coca-Cola paid out $8 billion in dividends to its investors, bringing its total to $84.7 billion since January 2010. The beverage giant currently offers a dividend yield of about 2.7 percent. That’s more than double S&P 500his dividend yield (recently around 1.3%).

The company is in a strong position to continue growing its dividend. Coca-Cola generates robust free cash flow ($9.2 billion expected in 2024 after covering capital expenditures) and has a cash-rich balance sheet ($17.4 billion in cash, equivalents and short-term investments).

Meanwhile, the company expects its earnings to continue to grow, driven by consumers’ sugar addiction and investments to grow its business. Its long-term objective is to grow its revenue organically by 4% to 6% annually and deliver earnings per share growth of 7% to 9% each year. This growing revenue stream should allow Coca-Cola to continue growing its satisfying dividend.

A sweet income stream

Hershey has a long history of paying dividends. The chocolatier has increased its payout for 15 consecutive years, including giving investors a 15% increase earlier this year. Hershey currently offers a tasty 2.8% dividend yield.

The iconic chocolate company owns top brands such as namesake, Reese’s and KitKat. These brands generate billions of dollars in annual revenue and cash flow for the company. It posted sales of more than $5 billion in the first half of this year and revenue of nearly $1 billion.

Hershey has invested heavily in growing its business, including adding more savory snacks to its growing candy mix. These investments help increase the company’s earnings and cash flow. Its long-term objective is to grow net sales by 2% to 4% annually and deliver adjusted earnings per share growth of 6% to 8%. Meanwhile, Hershey hopes to grow its dividend in accordance with its long-term earnings.

This dividend hits place

Mondel has produced dividend increases over the past ten years. The global snacking giant gave its investors an 11% increase in June and delivered a double-digit increase in its dividend per share in each of the last five years. It now yields around 2.6%.

The company has a knack for satisfying consumers’ desire for snacks. About 88% of consumers have a snack every daymost of them (76%) loyal to certain brands. Mondelez owns many beloved brands including Oreo, Milka, Cadbury, Ritz, Chips Ahoy! and Clif. It is the largest seller of cookies/biscuits in the world and the second largest chocolate company.

Mondelez aims to grow revenue by 3% to 5% per year, putting it on track to deliver high single-digit earnings per share growth and strong free cash flow (3+ billion of dollars annually). The company plans to use its free cash flow to make purchasesbuy back shares and continue to pay a growing dividend.

These sweet payments should continue Rising

For better or for worse, sugar is a big part of the American diet. That means companies that allow which produce sugary drinks, snacks and treats to make huge profits every year. They return some of that money to investors through dividends. This makes them excellent options for investors looking to satisfy their desire for more passive income.