Credit: Shutterstock photoThis stock passes the "Pink Slip" test.
I first told you about the company back in March, in my article "The OneDividend Payer I Want to Hold in any Market."
Back then, I called it "the most boring business I've ever researched." That's exactly what you want if you're worried about the market, or simply want to sleep soundly at night.
Here's what "boring" gets you with this stock -- 39 straight years of dividend increases; dividend growth of 150% in the past 10 years; and a total return of 57% in the past 10 years -- twice the S&P 500Index . All with volatility that's half the S&P 500.
And since I told you aboutshares of Kimberly-Clark (NYSE: KMB) back in March, the stock has continued to outpace the market. Just a few days ago, it hit a new 52-week high.
That shouldn't be a surprise.
After all, Kimberly-Clark is one of the few companies on the planet that can pass the "Pink Slip" test.
Off the top of my head, I can only think of only a handful of stocks that can pass. It's no coincidence these stocks are some of the most stable securities on the market. Or that they are owned by some of the richest investors in the world.
Coca-Cola (NYSE: KO) is a great example of a stock passing the "Pink Slip" test. No surprise, it's owned by Warren Buffett and has returned 81% in the past decade.
Duke Energy ( DUK ) is another. The electric company has paid a dividend for 84 consecutive years and has traded in a stable $4 range for the past year.
Let me explain. The "Pink Slip" test is simple, and you can apply it to every stock you own.
A stock passes the test when even a person laid off yesterday (hence the pink slip) would still buy that company's products. If a business makes products that necessary to everyday life, it's all but guaranteed to see year after year of steady demand -- and hold up better than most others in a downturn.
That's a perfect combination for investors worried about the market's direction.
Kimberly-Clark makes toilet paper. They make Kleenex. They make diapers. Like I said... it's a boring company. But I'm hard pressed to think of any lineup of products better suited to pass the "Pink Slip" test.
And this steady demand, no matter the broadereconomy , is consistently turned into dividend increases for investors.
From the end of 2007 through the first quarter of 2010 -- the teeth of therecession -- Kimberly-Clark raised dividends 25%. In fact, every share bought just five years ago has paid out $11.65 since, providing a nearly 20% gain on dividends alone.
Action to Take --> Fair warning, you aren't going to become an overnight millionaire with these types of stocks. You won't be able to brag at cocktail parties.
But I think that's a fair trade for owning steady-eddy companies, especially with those with a strong track record of consistent and growing dividends.
Note: If you'd like to read more about other high-yield income ideas, be sure to read my course -- 59 Checks a Month . Here, I've outlined a few tips for finding income in this market and mention eight names you might want to research further... including one yielding 11%.
-- Amy Calistri
Disclosure: Neither Amy Calistri nor StreetAuthority, LLC hold positions in any securities mentioned in this article.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
