Realty Income offers a steady performance and a generous and rising monthly dividend.
After years of struggle, growth has returned for Clorox -- and the stock is turning higher.
Campbell's pivot into higher-quality food lines could win over customers and investors alike.
The market's indexes are again hovering near record highs. In this circumstance, stocks trading at low valuations are often difficult to find.
Fortunately, this has not been the case in the current bull market, as investors can find numerous value stocks in the consumer sector. Not only do they trade at low valuations right now, but their offerings tend to stay in demand regardless of the economy's performance.
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Amid those conditions, these three consumer dividend stocks may offer the potential for market-beating returns without carrying premium valuations, and investors may want to buy in 2026 while the opportunity is still there.
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Realty Income (NYSE: O) may not be a household name, but most consumers likely regularly set foot in its buildings. The company leases single-tenant buildings to prominent companies, including Home Depot, FedEx, and Tractor Supply.
Its triple-net leases make the tenant responsible for maintenance, taxes, and insurance expenses, providing Realty Income with a steady source of revenue. Also, since its nearly 15,600 properties have almost a 99% occupancy rate, it typically seeks properties to develop or buy to continue its expansion.
Realty Income is also known as "The Monthly Dividend Company." True to its name, it has paid a monthly dividend since 1994 and just declared its 135th dividend increase. At over $3.25 annually, it pays a cash yield of 5.2%, far above the S&P 500 average of 1%.
It may not look so cheap considering its 52 P/E ratio. Nonetheless, for real estate investment trusts (REITs) like Realty Income, funds from operations income is the more critical metric. When measured against its $4.27 per share in FFO income over the last 12 months, its multiple is closer to 15. Considering that low valuation and its generous, stable dividend, it is difficult not to like Realty Income.
Clorox (NYSE: CLX) is a consumer staples conglomerate. In addition to its flagship bleach product, it also owns Kingsford charcoal, Hidden Valley salad dressings, and Burt's Bees personal care products.
Admittedly, its stock has struggled in recent years. A cyberattack in 2023 was tremendously disruptive to the company, and, more recently, an upgrade of its CRM system and rising inflation have slowed sales.
Fortunately, Clorox seems to have moved past most of these challenges, and after a period of declining sales, analysts expect a sales rebound in the current fiscal year.
Moreover, investors have good reason to believe the difficulties are likely baked into the price of its struggling stock. Investors can buy this stock for around 22 times earnings.
Investors will also like that its yearly dividend is now $5 per share. Also, the falling stock price in recent years helped raise its dividend yield to 4.7%, and Clorox can likely afford the payout since its $881 million in free cash flow is well above the approximately $600 million it spent on dividends. Since it has raised this dividend every year for decades, it could look increasingly attractive to income investors.
Ultimately, between that payout and the fact that Clorox's financials are on the verge of a recovery, investors may want to consider buying the stock before a rising price lowers its generous dividend yield.
Another prominent consumer name that has struggled in recent years is Campbell's (NASDAQ: CPB). Aside from its well-known canned soups, V8, Pepperidge Farm, and Rao's Homemade are among its brands.
Indeed, Campbell's had IT upgrade issues of its own that slowed sales for a time. Moreover, packaged food companies have suffered as consumers become increasingly drawn to organic and natural foods.
However, Campbell's is working to turn that around. One way is through Rao's, a premium brand that comes from a popular New York restaurant. The company has emphasized natural ingredients and small-batch cooking to justify premium pricing.
Amid its difficulties, Campbell's stock has fallen to multi-year lows. Still, that also means that its stock trades at a P/E ratio of just 11, which is cheap even for a consumer staples company. Additionally, thanks to the falling stock price and a payout that has risen every few years, its annual dividend of $1.56 per share offers a yield of 6.8%.
While such a yield could make investors nervous, they should remember that its diluted net earnings for the first nine months of fiscal 2026 (ended May 3) came in at $1.55. Since it appears to be able to afford this payout, a dividend cut is unlikely, making Campbell's an excellent choice for income investors.
Before you buy stock in Realty Income, consider this:
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Will Healy has positions in Clorox and Realty Income. The Motley Fool has positions in and recommends Home Depot, Realty Income, and Tractor Supply. The Motley Fool recommends Campbell's and FedEx. The Motley Fool has a disclosure policy.