"Walmart (NASDAQ:WMT | WMT Price Prediction) and Costco (NASDAQ:COST) together represent nearly 19% of the portfolio but contribute almost nothing to income. Walmart yields roughly 0.8% and Costco under 1%. Their value to KXI is stability and capital appreciation, not dividends."
"Philip Morris International (NYSE:PM) carries a 3.1% yield and has raised its dividend every year since its 2008 spinoff, growing the payout 8.9% in 2025 alone. With 2026 adjusted EPS guidance of $8.38 to $8.53 and smoke-free products generating 41.5% of revenue, the dividend looks well-supported."
"Coca-Cola (NYSE:KO) is a 63-consecutive-year dividend grower, yielding about 2.6% with a 67% payout ratio. Its 2026 free cash flow guidance of approximately $12.2 billion comfortably covers its annual dividend obligation."
"PepsiCo (NASDAQ:PEP) has raised its dividend for 50-plus consecutive years and just increased the payout 5.0% to $5.69 annualized, a sign of management's continued commitment to income investors. However, the balance sheet carries meaningful leverage, which is worth monitoring."
KXI is a conservative income fund holding consumer staples companies with nearly 20 years of operating history. Its 2.2% dividend yield falls below the 3.75% federal funds rate, requiring capital appreciation to justify holding over cash alternatives. Walmart and Costco comprise 19% of the portfolio but contribute minimal income, serving primarily for stability and growth. The income engine comes from Philip Morris International yielding 3.1% with consistent dividend growth, Coca-Cola at 2.6% with 63 consecutive years of increases, Procter & Gamble as a Dividend King with 60+ years of growth, and PepsiCo with 50+ years of consecutive increases. These holdings maintain sustainable payout ratios and strong cash flow generation, though PepsiCo's elevated debt levels warrant monitoring.
Read at 24/7 Wall St.
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