Although two analysts have recently downgraded this global specialty food company’s shares to ‘Hold’ and ‘Underweight’, the company beat estimates by a penny, and three analysts have increased their earnings forecasts in the past 30 days. The shares have a dividend yield of 1.87%, paid quarterly, and the dividend was just increased, for the 30th consecutive year. Not a barn-burner, but you get paid while you’re patient for rising share prices.
McCormick & Company, Incorporated (MKC)
From DirectInvesting.com
Founded in 1889 and headquartered in Sparks, Maryland, McCormick & Company (MKC) is a leading manufacturer, marketer, and distributor of spices, seasonings, flavorings, and other specialty food products for the consumer, industrial, and foodservice markets. Its brands include Lawry’s, McCormick, Zatarain’s, Simply Asia, and Thai Kitchens (in the United States), Club House (in Canada), Ducros, Vahine, and Silvo (in Europe), and Schwartz (in the United Kingdom).
Foreign operations account for over 40% of total revenues, which totaled $4.3 billion in fiscal 2015. According to Yahoo! Finance, the consensus estimate of 11 analysts calls for the company to earn about $3.70 per share for the fiscal year that ends in November and to net about $4.06 in fiscal 2017, compared with $3.48 in fiscal 2015.
The dividend was just raised for the 30th consecutive year and provides a yield close to 2.0%.
What’s attractive about McCormick is its resistance to economic cycles and strong brand names that generate consistently growing sales, both here and abroad, from consumer kitchens to restaurant and industrial settings. At a time of stock market uncertainty, McCormick is fresh off a banner year, suggesting that its shares will perform well in the short and long term, as they have in the past. Fashions may change, but taste buds will continue to crave the spices and seasonings that this company produces, as evidenced by the prominent positions that its products command in supermarkets and grocery stores across the country.
Its long history of strong sales, earnings, and dividend growth is likely to be enhanced by strategic acquisitions and new product development over time.
Vita Nelson, www.directinvesting.com, 914-925-0022, February 1, 2016