A cereal serial dividend payer

Kellogg Company (NYSE: K) is a name you probably associate with cereal, but its cereal brands account for only about a third of its revenue today because Kellogg has been diversifying, focusing on more growth-oriented areas.

Frozen foods, including meatless alternatives, now make up around 13 percent of revenue. And snacks, including brands like Pringles and Cheez-it, account for just over half of the revenue pie. Meanwhile, Kellogg has adapted to the changing market, jettisoning older brands with slower growth rates, such as Keebler.

Despite its big overhaul, Kellogg has continued to reward investors with regular dividend increases. It has paid quarterly dividends without interruption for nearly 100 years, and has boosted its payout annually for most of the last 17 years. The dividend recently yielded a hefty 3.7 percent.

To be fair, Kellogg’s overhaul is relatively recent, and the food industry has been through an unusual period, first with the coronavirus and now with rising inflation. So Kellogg really hasn’t had a chance to demonstrate how its new approach works in a more typical environment. But it does seem to be going in the right direction.

However, investors have been in a “show me” mood, and Kellogg’s stock was recently around 24 percent below its 2016 highs. If you’re looking for a company with a proven record of prioritizing its dividend, Kellogg is worth a closer look.