This household name consumer products company beat analysts’ earnings estimates by $0.07 last quarter. The shares are trading at a discounted level, and have an annual current dividend yield of 3.53%, paid quarterly.
Campbell Soup Company (CPB)
From Dividend Advisor
Conservative-Growth Payer Portfolio, Dividend Sustainability Rating: Above Average.
Under its new strategic plan, which began in 2018, Campbell sold most of its international and refrigerated-foods businesses. That let it focus on canned soups, pasta and V8 vegetable juices. Campbell also kept its snack food operations. They were significantly expanded in March 2018 when the company paid $6.1 billion for snack-foods maker Snyder’s-Lance. Snacks now account for half of its sales.
In its fiscal 2021 fourth quarter, ended August 1, 2021, Campbell’s sales fell 11.1%, to $1.87 billion from $2.11 billion a year earlier. If you factor out the sale of a baby food business and currency rates, sales declined 3.7%. Earnings before one-time items in the quarter fell 13.0%, to $167 million, or $0.55 a share, from $192 million, or $0.63 a share. Rising prices for ingredients and packaging hurt earnings in the latest quarter. In response, Campbell plans to raise its selling prices.
The company will probably earn $2.77 a share in fiscal 2022. The stock trades at an attractive 15.2 times the midpoint of that range.
Campbell Soup is a buy.
Patrick McKeough, Dividend Advisor, tsinetwork.ca, 888-292-0296, October 2021