3 Low Beta Consumer Stocks With High Yields

The consumer goods sector is an interesting field for investors who are risk averse. Recession or not, consumer goods companies usually have low fluctuations in their operational performance. The low cyclic in sales and income affects mostly the stock price which therefore has a low beta (Correlation between the overall stock market and share price). The lower the beta ratio, the less the correlation between capital market performance and the stock price.

I screened the consumer goods sector for stocks with the lowest beta ratios as well as a dividend yield of more than 4 percent. As beta criterion, I selected a value of less than 1. Only 15 stocks remained of which 4 had a beta ratio of less than 0.5.

Here are my 3 most promising stocks from the screening results:

1. Kimberly Clark (KMB) operates within the consumer goods industry. The company has a market capitalization of USD 25.6 billion, generates revenues in the amount of USD 20.3 billion and a net income of USD 1.7 billion. Its Price/Earnings ratio is 15.4 and forward price to earnings ratio 12.4, Price/Sales 1.3 and Price/Book ratio 14.9. Dividend Yield: 4.3 percent. Years of Consecutive Dividend Increases: 36 Years. 5-Year Dividend Growth: 7.8 percent. The company has paid dividends since 1935. The beta ratio comes out to 0.43.

2. Altria (MO) operates within the tobacco industry. The company has a market capitalization of USD 52.2 billion, generates revenues in the amount of USD 23.9 billion and has a net income of USD 3.4 billion. Its Price/Earnings ratio is 15.3 and forward price to earnings ratio is 11.6, Price/Sales 2.2 and Price/Book ratio 2.2. Dividend Yield: 6.0 percent. Years of Consecutive Dividend Increases: 45 Years. 5-Year Dividend Growth: -10.4 percent. The company has paid dividends since 1928. The beta ratio comes out to 0.46.

3. United Guardian (UG) operates within the personal products industry. The company has a market capitalization of USD 63.6 million, generates revenues in the amount of USD 13.8 million and has a net income of USD 3.9 million. Its Price/Earnings ratio is 16.5 and forward price to earnings ratio is 12.9, Price/Sales 4.6 and Price/Book ratio 4.5. Dividend Yield: 5.0 percent. Years of Consecutive Dividend Increases: 7 Years. 5-Year Dividend Growth: 8.06 percent. The company has paid dividends since 1996. The beta ratio amounts to 0.50.

Take a closer look at the full table. The average price to earnings ratio (P/E ratio) of this list amounts to 16.86. The dividend yield has an average value of 5.40 percent. Price to book ratio is 4.49 and price to sales ratio 2.26. The average operating margin amounts to 17.38 percent.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in KMB and/or MO over the next 72 hours.