Key Points
Domino's Pizza recently announced a 15% dividend increase.
Mondelez is proving to be a potent dividend grower in its own right.
Campbell’s may be an interesting income idea for risk-tolerant value investors.
- 10 stocks we like better than Domino's Pizza ›
While calling their performance a "renaissance" might be a modest dose of hyperbole, in broad terms, dividend stocks are off to strong starts in 2026. The emphasis is on "broad" because performances aren't uniform in this corner of the equity market, even for blue chip dividend stocks.
What's noteworthy about this year's dividend-equity resurgence is that it has largely been driven by higher-yield groups, such as consumer staples, utilities, and oil dividend stocks. High-dividend leadership doesn't imply that payout growth is out of style. Actually, dependable dividend growth is always fashionable, because it's how patient income investors garner long-term rewards.
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These dividend stocks could become foundations of long-term income portfolios. Image source: Getty Images.
If you're an income investor seeking stocks that offer a combination of dependability, familiarity, and value, you may find much to like in the consumer discretionary and consumer staples sectors. Here are three names to consider that could serve as bedrocks of a dividend portfolio over the next 20 years.
Treat yourself to a steadily rising dividend with Domino's
In news that was the opposite of biting into a fresh, warm piece of baked dough, Domino's Pizza (NASDAQ: DPZ) reported disappointing first-quarter results last week, sending the stock tumbling and contributing to its year-to-date decline of 19%. A year-long slide in the stock, one of Warren Buffett's final additions to the Berkshire Hathaway equity portfolio, has the pizza chain's shares sporting a forward price-to-earnings (P/E) ratio of about 17 -- its lowest in three years. That may be a signal that Domino's is now a value stock.
What's not up for debate is Domino's perch among a small number of stocks with moatlike traits and its ability to raise its dividend by double-digit percentages. It did just that again in February, boosting its payout by 15% and extending its dividend-hiking streak to 14 consecutive years.
Mondelez is marvelous in the dividend department
Up 14% year to date, Mondelez International (NASDAQ: MDLZ), maker of Ritz crackers, is one of this year's juggernauts among large-cap consumer staples stocks. Speaking of the number 14, that's also the length in years of Mondelez's dividend-boosting streak. At current share prices, the stock now yields around 3.3%, triple the average for the S&P 500 index.
Mondelez's dividend growth is a positive sign for long-term investors, but there are near-term considerations. In the first quarter, the company did gain market share in some segments. But management also acknowledged that U.S. consumer confidence is low, due in part to the Iran war and its impacts on the economy. That may be a sign that this consumer staples stock, though already flying high this year, could benefit from an end to the conflict.
Looking further out, some experts see Mondelez generating free cash flow (FCF) equivalent to 13% of sales over the long term, which could support dividend growth in the high single-digit percentages over the next decade.
Campbell's is one for the risk-takers
Typically, income investors head to the consumer staples sector when they're looking to avoid risk, but that strategy doesn't apply to every stock in it. Campbell's (NASDAQ: CPB) stock is down more than 25% so far this year.
That might make investors squeamish, and rightfully so. But if you can handle the risk, Campbell's may be a compelling value play; some market observers view its shares as deeply discounted, and its dividend at the current share price yields 7.5%.
Moreover, the company has dramatically altered its product lineup to reduce its dependence on the slow-growth soup segment. It's even leveraging technology, including artificial intelligence, to keep up with shifting consumer tastes, showing that even 150-year-old companies can try to evolve with the times. But you may need to wait a while for those efforts to be reflected in the share price.
Regarding the dividend, Campbell's payout-increase streak is just two years long, and its payout ratio of 85.3% is high.That doesn't necessarily mean a cut or suspension is in the offing. Still, if a negative event like that does materialize, it would be all the incentive that many investors would need to convince them to take their dividend-hunting business elsewhere.
On the bright side, Campbell's has paid a dividend for 51 straight years. It's possible that management recognizes the payout as an important selling point for would-be shareholders, at least until product-portfolio changes and tech commitments bear more fruit.
Should you buy stock in Domino's Pizza right now?
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Todd Shriber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Domino's Pizza. The Motley Fool recommends Campbell's. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
