Campbell Soup Co's Dividend Analysis
Insight into Campbell Soup Co's Upcoming Dividend and Its Sustainability
Campbell Soup Co (NYSE:CPB) recently announced a dividend of $0.37 per share, payable on 2024-01-29, with the ex-dividend date set for 2024-01-03. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Campbell Soup Co's dividend performance and assess its sustainability.
What Does Campbell Soup Co Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
With a history that dates back around 150 years, Campbell Soup Co is now a leading manufacturer and marketer of branded convenience food products, most notably soup. The firm's product assortment includes well-known brands like Campbell's, Pace, Prego, Swanson, V8, and Pepperidge Farm. Following the sale of its international snacking operations in calendar 2019, the firm derives nearly all of its sales from the United States. Campbell Soup Co has made a handful of acquisitions to reshape its product mix in the past several years, including the tie-up with Snyder's-Lance in March 2018, which enhanced its exposure to the faster-growing on-trend snack food aisle, complementing its Pepperidge Farm lineup.
A Glimpse at Campbell Soup Co's Dividend History
Campbell Soup Co has maintained a consistent dividend payment record since 1986, distributing dividends on a quarterly basis. The company has increased its dividend each year since 2013, earning it the status of a dividend achiever, a prestigious title awarded to companies with at least 11 consecutive years of dividend increases.
Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down Campbell Soup Co's Dividend Yield and Growth
As of today, Campbell Soup Co currently has a 12-month trailing dividend yield of 3.42% and a 12-month forward dividend yield of 3.42%, indicating an expectation of consistent dividend payments over the next year. Over the past three years, Campbell Soup Co's annual dividend growth rate was 1.90%. This rate decreased to 1.40% per year over a five-year span. However, looking at the past decade, Campbell Soup Co's annual dividends per share growth rate stands at 5.70%.
Based on Campbell Soup Co's dividend yield and five-year growth rate, the 5-year yield on cost for Campbell Soup Co stock is approximately 3.67%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. Campbell Soup Co's dividend payout ratio as of October 31, 2023, is 0.56, suggesting a balanced approach between distributing earnings and retaining funds for growth and unforeseen downturns. The company's profitability rank is a robust 8 out of 10, reflecting good profitability prospects. Campbell Soup Co has also reported positive net income annually over the past decade, reinforcing its financial stability.
Growth Metrics: The Future Outlook
The future sustainability of dividends is underpinned by a company's growth metrics. Campbell Soup Co's growth rank of 8 out of 10 suggests a favorable growth trajectory compared to its competitors. Despite a solid revenue per share and a 3-year revenue growth rate that indicates a robust revenue model, Campbell Soup Co's average annual revenue growth of 2.80% lags behind approximately 64.62% of global competitors.
The company's 3-year EPS growth rate, a measure of its ability to increase earnings, was 9.90% per year on average, which underperformed approximately 46.72% of global competitors. Additionally, Campbell Soup Co's 5-year EBITDA growth rate of 4.90% also underperformed against about 50.88% of global competitors.
Concluding Thoughts on Campbell Soup Co's Dividends
In conclusion, Campbell Soup Co's consistent dividend payments, moderate growth rate, prudent payout ratio, and solid profitability underscore its commitment to providing shareholder value through dividends. While the company's growth metrics indicate areas for improvement, its strong profitability and dividend achiever status may continue to attract value investors seeking stable income streams. As the company navigates through the competitive food industry landscape, it will be essential for investors to monitor Campbell Soup Co's financial health and growth prospects to ensure the sustainability of future dividends.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
