My Forever Portfolio: 5 Dividend-Paying Value Stocks That Are Too Cheap to Ignore

On Nov. 2, Kimberly-Clark (NASDAQ: KMB) became the owner of Tylenol and Listerine when it closed its purchase of Kenvue. A few days earlier, Clorox (NYSE: CLX) named a new CEO, and Hormel Foods (NYSE: HRL) just swore one in.

That's a lot of change for companies selling things we buy without thinking. Here's a simple way to think about a forever portfolio: I want businesses whose customers will still be showing up in 20 years, and I want to buy them while Wall Street worries they won't.

These five value stocks from the consumer staples aisle pay dividends, cost less than they used to, and sell something I don't expect people to quit.

Image source: Getty Images.

1. Your spice rack is on sale

McCormick (NYSE: MKC) expects adjusted earnings of $3.05 to $3.13 per share this year , right around the $3.05 it earned in 2021. Five years ago, the stock traded near $73. Today it's about $48, with a dividend paying about 4% a year.So you pay about $15 for each dollar of yearly profit, versus about $24 back then. That's the price-to-earnings ratio in plain English.

Investors are nervous about its deal for the food business of Unilever, which adds Hellmann's and Knorr but leaves today's owners with 35% of the combined company and more debt. Shoppers in the Americas also bought 2.5% less of its products last quarter as prices rose.

I'd hold it anyway. CEO Brendan Foley's pitch is that McCormick flavors calories while others compete for them. It has raised its dividend 40 years in a row, and last year's raise came Nov. 18.

2. The Planters guy now runs the pantry

Here's a simple way to think about Hormel: SPAM, Skippy, Planters, and Jennie-O all come from the same Minnesota company. The stock is down about 38% over five years at around $22, which pushes its dividend yield to about 5.3%. So $1,000 invested pays roughly $53 a year.

The worry is the grocery aisle. Retail volume fell 9% last quarter, even as sales to restaurants grew for a 12th straight quarter. But new CEO John Ghingo spent more than 15 years at Mondelez International, including on Planters, and later ran Hormel's Applegate business.

Hormel has raised its dividend 60 years in a row, putting it among the Dividend Kings, and last year's raise came Nov. 24. Ghingo's first full-year outlook arrives Dec. 3.

3. Tylenol and Huggies at 2021 prices

Kimberly-Clark's stock sits around $112, almost exactly where it was five years ago, and yields about 4.6%. Meanwhile, it kept raising its dividend, now 54 years running, and today owns 10 billion-dollar brands, including Huggies, Tylenol, Kleenex, and Neutrogena.

A false social media rumor crushed Huggies sales in China until the Chinese government refuted it in October, and management expects the Kenvue deal to trim 2027 earnings before delivering double-digit growth in 2028, per CNBC.

Management is targeting about $2.1 billion a year in savings and extra profit from the combination.

4. A new boss for the bleach

Clorox trades around $105, about 18% below its 52-week high and roughly 23% below its price five years ago. It expects adjusted earnings of $5.70 to $6.00 a share this fiscal year, likely near the low end as costs rise.

The past year was rough. A switch to new computer systems scrambled shipments and cut about $0.90 a share from fiscal 2026 earnings.

What I like is the fresh start. CEO Linda Rendle is stepping down for health reasons, and on Jan. 5, Fabian Garcia takes over. He runs Unilever's personal care business and was once CEO of Revlon. Unilever raised its dividend again in July, to $1.25 a quarter.

5. Modelo at a happy-hour price

Constellation Brands (NYSE: STZ) sells Modelo Especial, the top-selling beer brand in U.S. stores by dollar sales, plus Corona and Pacifico. Yet the stock is down 37% over three years at around $142 , about 12 times the $11.20 to $11.90 a share it expects to earn this fiscal year.

This is related to its customer demographics. About 40% of spending on its beer comes from Hispanic shoppers, who have been squeezed by a tough job market and mass-deportation policy in the U.S., per CNBC. Beer sales from distributors to stores slipped 0.6% last quarter.

Still, Constellation gained more beer market share than any other brewer, and Pacifico jumped about 19%.The dividend is smaller, so I'd treat this as the portfolio's growth piece.

Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool recommends Constellation Brands and McCormick. The Motley Fool has a disclosure policy.