B&G Foods Hikes Dividend


The board of directors of the packaged food company, B&G Foods, Inc. (BGS) recently increased its quarterly dividend by 10.3% to 32 cents per share from 29 cents  The dividend hike also translates into an annual dividend of $1.28 from $1.16 paid earlier, thus offering an annual yield of 3.7%. The dividend is payable on Oct 30, 2013 to shareholders of records as of Sep 30, 2013. The company paid its last dividend of 29 cents in the quarter ending Jun 29.    

The current increase in dividend reflects that the company has a strong liquidity position. The company had cash and cash equivalents of $202.4 million as of Jun 29, 2013, which is significantly higher than $19.2 million as of Dec 29, 2012. The significant increase in cash is due to issuance of 4.625% senior notes worth $700 million in Jun 2013.

Flexing its liquidity power, B&G has recently been acquiring several brands to strengthen its product portfolio. On Jul 8, the packaged food company acquired Pirate Brands formerly known as Robert’s American Gourmet Food, LLC. Pirate Brands include baked, all-natural, trans fat free and gluten free snack brands such as Pirate’s Booty, Smart Puffs and Original Tings.  The company also acquired the TrueNorth brand from DeMet’s Candy Company in May 2013. With the growing importance of nutritious snacking, TrueNorth and Pirate’s brands are healthy addition to B&G Foods’ snacks portfolio. Its snacks portfolio also includes New York Style, Old London, JJ Flats and Devonsheer brands, which were acquired in Oct 2013.

B&G Foods carries a Zacks Rank #1 (Strong Buy).

Some other companies from the consumer staples sector that are performing well include Dole Food Company Inc. (DOLE), Boulder Brands, Inc. (BDBD) and The Chefs' Warehouse, Inc. (CHEF). While Dole Food Company carries a Zacks Rank #1, Boulder Brands and The Chefs' Warehouse carry a Zacks Rank #2 (Buy).

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