Are you approaching retirement? These actions will pay you for life

You should definitely celebrate the end of your working days. It’s also a good time to review your investment portfolio. Since you will no longer receive a regular salary, investing in dividend-paying stocks can provide a steady source of cash flow.

However, the key is to do your homework so that your holdings continue to pay dividends for many years into the future. Both of these companies have stable businesses that thrive in a variety of situations, excellent balance sheets (both are dividend kings), and strong free cash flow that supports dividends.

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Procter & Gamble

Procter & Gamble (PG 1.53%) sells basic items that people use on a regular basis, no matter what’s going on in the economy. These include shampoo, shaving cream, laundry detergent, and diapers. It has venerable and popular brands like Head & Shoulders, Gillette, Tide, Luvs and Pampers.

The company was able to raise prices to help offset the price increases. For the third fiscal quarter (ended March 31), Procter & Gamble’s sales, excluding foreign currency translations, increased 10%, price increases representing 5% and responsible volume increase of 3% (a change of mix represented the balance).

Procter & Gamble also generates a prodigious amount of free cash flow, to the tune of $10.5 billion for the first nine months of the year. This easily covered the $6.5 billion in dividends.

With steady business and strong free cash flow, it’s no wonder the company has been paying a dividend since 1890 and has increased the payout for 66 consecutive years. Last month, the board declared a quarterly dividend of about $0.91, or 5% more than the previous payout.


PepsiCo (DYNAMISM 0.98%) sells beverages under well-established brands such as Pepsi, Mountain Dew and Gatorade. It is also a supplier of foods and snacks such as cereals and chips, under names such as Doritos, Fritos, Life Cereal and Quaker Chewy granola bars.

With constant demand for these products, the business continues to buzz. For the first quarter, adjusted sales increased by approximately 14%. Higher volume was responsible for around three percentage points and the company showed its pricing power, with 10 percentage points coming from higher prices.

While the first quarter typically results in negative free cash flow, last year’s figure was $7 billion. This gave it a large cushion to pay the $5.8 billion in dividends.

PepsiCo raised the June quarter dividend 7% to $1.15. This was a major milestone, marking 50 consecutive years of higher payouts, and saw the company join the elite Dividend Kings.

Food and beverage sales have allowed PepsiCo to continue to generate steady growth in sales and earnings. And consumers continue to demand PepsiCo products.

Procter & Gamble and PepsiCo sell simple but excellent products in this area. That’s why they’ve been able to generate a lot of free cash flow and pass on some of it in the form of ever-increasing dividends. No matter what the future holds, you can rest easy knowing you can count on your regular quarterly dividends from these two companies.