Consumer giants still attract investors

16 April 2009

NEW YORK: Consumer-focused companies including Coca-Cola, Kimberley Clark and Procter & Gamble are expected to prove popular among investors this year despite the downturn, as demand for their products should hold up better than their counterparts in other sectors.

While it is predicted that shoppers will pair back their spending, and that own label will pose a greater threat to established brands in the current climate, the positions of many consumer goods giants are still seen as being relatively strong.

According to Rick Helm, manager of the Cohen & Steers Dividend Value Fund, firms operating in this area offer "far more opportunity for dividend increases than other sectors right now."

Tom Cameron, co-manager of the Rising Dividend Growth Fund, also argued that consumers "may not be going out and buying beautiful dresses and jewellery, but they've got to eat," and ear-marked Nestlé and PepsiCo as sound choices for investors.

Furthermore, Coca-Cola, PepsiCo, Kimberly-Clark and P&G are all on Standard & Poor's "dividend aristocrat" list, marking them out as fertile territory for investors even during a recession.

PepsiCo's Indra Nooyi has also recently beaten her Coca-Cola counterpart Muhtar Kent to be named as "America's Best ceo" in the beverage sector by Institutional Investor magazine.

AG Lafley, of P&G, took this title in the cosmetics, household and personal care segment, as did his equivalent at Omnicom Group, John Wren in the publishing and advertising agency category.

Data sourced from Wall Street Journal/Institutional Investor; additional content by WARC staff