The Steady Drip: 3 Conservative Income Stocks for Retirees (Connecting the Dots: General Mills Inc, Belizean Grove, The Committee for Economic Development, Obamacare, The Commercial Club of Chicago & Soros Funding, All Networking)

3 Conservative Income Stocks for Retirees (Connecting the Dots: General Mills Inc, Belizean Grove, The Committee for Economic Development, Obamacare, The Commercial Club of Chicago & Soros Funding, All Networking)

Newsmax.com

By Bob Ciura Friday, 31 January 2025 12:46 PM EST

Boxes of General Mills Lucky Charms cereal at a market in Pittsburgh (Gene J. Puskar/AP)

https://www.newsmax.com/finance/bobciura/dividend-income-stock/2025/01/31/id/1197324/

Retirees who purchase stocks for investment income often have to settle for low yielding stocks. The S&P 500 Index yields just 1.3% right now, on average.

However, there are plenty of high dividend stocks that have strong current yields above 4%, and also have secure dividend payouts that can grow over time.

The following 3 dividend stocks have high dividend yields and safe payouts, which makes them attractive for retirement income.

Portland General Electric (POR)

Portland General Electric is an electric utility based in Portland, Oregon, providing electricity to more than 930,000 customers in 51 cities. The company owns or contracts more than 3.5 gigawatts of energy generation, between gas, coal, wind & solar, and hydro.

POR has about 3,000 full-time employees. In 2023, the corporation generated $2.9 billion in revenue. The utility company is diversified by customer, with 37% of retail deliveries going to residential customers, 34% to commercial clients, and 29% to industrial clients. The company is forecasting that 80% of its power delivered to customers by 2030 will be carbon free, and 100% carbon free by 2040. On April 19th, 2024, Portland General Electric announced a 5% increase in the quarterly dividend to $0.50 per share.

Portland General reported third quarter 2024 results on October 25th, 2024. The company reported net income of $94 million for the quarter, equal to $0.90 per diluted share on a GAAP basis, compared to $0.46 in Q3 2023. Retail energy deliveries rose 0.3% year-to-date compared to the same prior year period, but wholesale energy deliveries soared 45%. As a result, total energy deliveries rose 11%.

Company management upgraded the company’s long-term EPS growth guidance to 5% to 7% (from 4% to 6% previously), but from here we expect 4.5% earnings growth into 2029. As of October 2024, Portland General maintained that long-term guidance. Leadership also estimates that the company can grow the dividend by 5% to 7% over the long term, for a 6% mid-point, which is consistent with the trailing 10-year average dividend growth rate of 5.8%.

We expect that Portland General will generate this earnings growth through increased annual energy deliveries, as a result of commercial growth, and strong growth in industrial energy demand due to customer expansion. Rate increases, customer additions, and completion of construction projects will all further fuel Portland General’s earnings growth.

POR yields 4.8%.

T. Rowe Price Group (TROW)

T. Rowe Price Group is one of the largest publicly traded asset managers. The company provides a broad array of mutual funds, sub-advisory services, and separate account management for individual and institutional investors, retirement plans and financial intermediaries. The firm had assets under management of more than $1.6 trillion as of September 30th, 2024.

T. Rowe Price is a Dividend Aristocrat, having increased its dividend for 38 years in a row.

On November 1st, 2024, T. Rowe Price reported third quarter results for the period September June 30th, 2024. For the quarter, revenue grew 6.9% to $1.79 billion, though this was $60 million below estimates. Adjusted earnings-per-share of $2.57 compared favorably to $2.17 in the prior year and was $0.22 more than expected.

During the quarter, assets under management (AUM) improved $61.8 billion, or 3.9%, to $1.63 trillion. Market appreciation of $74 billion was partially offset by $12.2 billion of net client outflows. Operating expenses of $1.17 billion increased 7.6% year-over-year, but just 0.3% quarter-over-quarter.

T. Rowe Price’s earnings, as well as its dividends, have grown substantially over the last decade. While earnings did drop during the last financial crisis, the overall record has been solid. Since 2014, the company has grown earnings-per-share by an average compound rate of 5.9% per annum. Moreover, the company performed well in 2020.

Asset managers like T. Rowe have low variable costs. As a result, higher revenues, driven primarily by increasing assets under management, allow for margin expansion and attractive earnings growth rates. Assets under management grow in two basic ways: increased contributions and higher underlying asset values. While asset values are finicky, the trend is upward over the long-term.

On the contribution side, T. Rowe Price’s strong past performance is a key selling point and could attract customers going forward. In addition, T. Rowe has another EPS growth lever in the way of share repurchases.

TROW stock currently yields 4.3%.

General Mills (GIS)

General Mills is a packaged food giant, with more than 100 brands and operations in more than 100 countries. General Mills has not cut its dividend for 124 consecutive years. It has returned to growth mode in the last five years, mostly thanks to the acquisition of Blue Buffalo and the pandemic, which greatly increased food consumption at home.

On September 12th, 2024, General Mills announced that it agreed to sell its North American yogurt business for $2.1 billion in cash. The proceeds will be used for share repurchases. The sale of this business, which generated 8% of total sales last year, is expected to reduce earnings-per-share by ~3% in the first year after the sale.

In mid-December, General Mills reported (12/18/24) results for Q2-2025. Net sales and organic sales grew 2% and 1%, respectively, over last year’s quarter thanks to higher volumes, which more than offset a slight decline in the price due to the composition of the product mix.

This marked an improvement vs. the marginal decline reported in the previous quarter. Gross margin expanded from 34.4% to 36.9%, as cost savings offset input inflation. Adjusted earnings-per-share grew 12%, from $1.25 to $1.40, and exceeded the analysts’ consensus by $0.18.

General Mills has grown its earnings-per-share at a 5.2% average annual rate in the last decade. In recent years, this decelerated, but the company has accelerated again since the onset of the pandemic. We expect approximately 5.0% annual earnings-per-share growth over the next five years, mostly thanks to Blue Buffalo. Earnings-per-share will also benefit from a decent amount of share repurchases.

GIS stock currently yields 4.0%.

Disclosure: No positions in any stocks mentioned

Connecting the Dots:
Hilda Ochoa-Brillembourg was a director at General Mills Inc, is a director at the Atlantic Council of the United States (think tank) and a trustee at the Committee for Economic Development.

Open Society Foundations was a funder for the Atlantic Council of the United States (think tank).

George Soros is a founder & chairman for the Open Society Foundations and the chairman for the Foundation to Promote Open Society.

Foundation to Promote Open Society was a funder for the Committee for Economic Development.

Paul Danos is a trustee at the Committee for Economic Development and a director at General Mills Inc.

Lois E. Quam was a trustee at the Committee for Economic Development and a director at General Mills Inc.

James A. Lawrence is a trustee at the Committee for Economic Development and was the vice chairman & CFO for General Mills Inc.

Raymond V. Gilmartin is a trustee at the Committee for Economic Development and was a director at General Mills Inc.

William T. Esrey was a trustee at the Committee for Economic Development and a director at General Mills Inc.

Steve A. Odland is the CEO for the Committee for Economic Development and a director at General Mills Inc.

Stephen W. Sanger is a trustee at the Committee for Economic Development and was the chairman & CEO for General Mills Inc.

Donna S. Morea was a trustee at the Committee for Economic Development and the EVP for the CGI Group Inc.

CGI Group Inc. was the Obamacare contractor that developed Healthcare.gov web site.

Obamacare is Barack Obama’s signature policy initiative.
Barack Obama was an intern at Sidley Austin LLP.

Michelle Obama was a lawyer at Sidley Austin LLP.

Newton N. Minow is a senior counsel at Sidley Austin LLP, and a member of the Commercial Club of Chicago.

R. Eden Martin is counsel at Sidley Austin LLP, and the president of the Commercial Club of Chicago.

James S. Crown is a trustee at the Aspen Institute (think tank), and a member of the Commercial Club of Chicago.

Commercial Club of Chicago, Members Directory A-Z (Past Research)

Tuesday, December 17, 2013

http://thesteadydrip.blogspot.com/2013/12/commercial-club-of-chicago-members.html

Lester Crown is a member of the Commercial Club of Chicago and was a lifetime trustee at the Aspen Institute (think tank).

Foundation to Promote Open Society was a funder for the Aspen Institute (think tank).

George Soros was the chairman for the Foundation to Promote Open Society.

Henrietta Holsman Fore is a trustee at the Aspen Institute (think tank) and a member of the Belizean Grove.

Siri S. Marshall is a member of the Belizean Grove and was an SVP & general counsel for General Mills Inc.

Belizean_Grove is the equivalent to the male-only social group, the Bohemian Club.

Henry A. Kissinger was a member of the Bohemian Club, a lifetime trustee at the Aspen Institute (think tank) and a director at the Atlantic Council of the United States (think tank).

Foundation to Promote Open Society was a funder for the Aspen Institute (think tank) and the Committee for Economic Development.

George Soros was the chairman for the Foundation to Promote Open Society and is a founder & chairman for the Open Society Foundations.

Open Society Foundations was a funder for the Atlantic Council of the United States (think tank).

Hilda Ochoa-Brillembourg is a director at the Atlantic Council of the United States (think tank) a trustee at the Committee for Economic Development and was a director at General Mills Inc.