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What’s Campbell Soup Doing with Its Dividend?

Gabriel Kane

Yesterday’s Consumer Pops and Drops: PF, ADM, PVH, and VC

(Continued from Prior Part)

Price movement of Campbell Soup

Campbell Soup (CPB) has a market cap of $19.6 billion. It rose by 0.21% to close at $63.43 per share on March 23, 2016. The price movements on weekly, monthly, and year-to-date (or YTD) bases were -1.3%, 4.2%, and 21.4%, respectively.

Currently, CPB is trading 1.0% above its 20-day moving average, 7.7% above its 50-day moving average, and 22.5% above its 200-day moving average.

The iShares Russell Midcap ETF (IWR) invests 0.14% of its holdings in Campbell Soup. The ETF tracks a market-cap-weighted index of the 800-smallest companies in the Russell 1000. The YTD price movement of IWR was 1.4% as of March 22, 2016.

The market caps of Campbell Soup’s competitors are as follows:

  • Mondelez International (MDLZ): $62.7 billion
  • General Mills (GIS): $36.2 billion
  • TreeHouse Foods (THS): $4.8 billion

Campbell Soup declared dividend

Campbell Soup has declared a regular quarterly dividend of $0.31 per share. The dividend will be paid on May 2, 2016, to shareholders of record at the close of business on April 11, 2016.

Performance of Campbell Soup in fiscal 2Q16

Campbell Soup (CPB) reported fiscal 2Q16 net sales of $2.2 billion, a fall of 1.5% compared to net sales of $2.2 billion in fiscal 2Q15. Sales of Americas simple meals and beverages and Global biscuits and snacks fell 3.2% and 2.6%, respectively. Sales of Campbell Fresh rose 10.2% in fiscal 2Q16 compared to fiscal 2Q15.

In fiscal 2Q16, the company’s cost of products sold as a percentage of net sales fell by 6.0%, and its EBIT (earnings before interest and tax) rose by 22.8%, compared to fiscal 2Q15.

Its net income and EPS (earnings per share) rose to $265.0 million and $0.85, respectively, in fiscal 2Q16. This compares to $222.0 million and $0.71, respectively, in fiscal 2Q15.

Its cash and cash equivalents rose by 52.2% in fiscal 2Q16 compared to fiscal 2Q15. Its current ratio rose to 0.83x, and debt-to-equity ratio fell to 2.5x in fiscal 2Q16. This compares to a current ratio and a debt-to-equity ratio of 0.73x and 2.6x, respectively, in fiscal 2Q15.

Projections

The company has made the following projections for fiscal 2016:

  • net sales growth in the range of -1%–0%
  • adjusted EBIT growth in the range of 10%–13%
  • adjusted EPS growth in the range of 9%–12%, or $2.88–$2.96

For an ongoing analysis of this sector, you can visit Market Realist’s Consumer Discretionary page.

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