Passive income is a key component of achieving financial freedom. By generating passive income, individuals can reduce their reliance on their job as the sole source of income and work towards a more secure financial future. There are various ways to increase passive income, with investing in dividend stocks being a popular choice for many. In this article, we will explore three enticing dividend stocks – Kraft Heinz, PepsiCo, and Mondelez International – that offer attractive opportunities for those looking to boost their passive income in the coming year.
Kraft Heinz is a well-known food company that owns iconic brands such as Heinz, Kraft Mac & Cheese, and Ore-Ida. Currently, Kraft Heinz offers a dividend yield of 5.2%, significantly higher than the S&P 500’s average dividend yield of 1.2%. This high yield can provide investors with a substantial amount of passive income. While Kraft Heinz did reduce its dividend by 36% in 2019 to focus on debt reduction and financial flexibility, the company’s leverage ratio is now below its target and it generates ample free cash flow to cover its dividend payments. With expected growth in earnings and free cash flow, Kraft Heinz’s high-yielding dividend is likely to remain sustainable.
PepsiCo, a global food and beverage company, boasts a portfolio of well-known brands such as Lay’s, Gatorade, and Pepsi-Cola. With a dividend yield of 3.5%, PepsiCo has a remarkable track record of increasing its dividend for 52 consecutive years, making it a Dividend King. The company plans to pay investors $7.2 billion in dividends this year and has a strong balance sheet with significant cash reserves. With continued earnings growth, PepsiCo is poised to remain a leading dividend stock for income-seeking investors.
Mondelez International, a global snacking giant, owns popular brands like Oreo, Cadbury, and Ritz. With a dividend yield of 3.1%, Mondelez has been growing its dividend at a rate of over 10% annually for the past five years. The company generates substantial cash flow, easily covering its dividend payments and allowing for share repurchases. With a strong balance sheet and growing cash flow, Mondelez is well-positioned to continue increasing its dividend in the future.
Investing in high-yielding dividend stocks like Kraft Heinz, PepsiCo, and Mondelez can help investors generate more passive income compared to the market average. By allocating funds to these income stocks, individuals can work towards satisfying their desire for increased passive income in the upcoming year. As these companies continue to grow and deliver strong financial performance, investors can look forward to a steady stream of passive income to support their financial goals.
