Food producers are not typically the kind of companies that
garner the attention of growth investors. ButB&G Foods (
) is one such food company, because its profit growth is
The Parsippany, N.J.-based company may not be a household
name, but it makes and distributes some familiar products, such
as Cream Of Wheat and Ortega Mexican food products. It also
produces and distributes a barrage of other food products under a
wide variety of labels.
Since 2005, B&G Foods has delivered increased earnings
each year, except the tough times in 2008. It has a five-year
earnings growth rate of 28%, which is bigger than the growth
rates of food giants such asConAgra Foods (
),General Mills (
) andKraft Foods (
B&G has made a string of acquisitions over the years. In
2003, it bought the Ortega brand fromNestle (
). Then in 2007, it bought Cream Of Wheat from Kraft Foods. Last
year it acquired Culver Specialty Brands from Unilever (UL).
On Wednesday, the firm announced that it's buying New York
Style and Old Style brands fromChipita America for about $62.5
million in cash. The deal is expected to add $45 million to $50
million to next year's sales.
In the first two quarters of the year, earnings grew 30% and
27%, respectively. Sales rose 20% and 15% over the same two
periods, lifted by contributions from its Culver Specialty Brands
buyout. Revenue had previously grown at single digits for a
number of quarters.
Analysts polled by Thomson Reuters see profit rising 27% this
year. The estimate was recently revised higher. But growth is
slated to slow to 6% in 2013.
Besides growth, B&G also has rewarded investors with
dividends, which it has paid each year since going public in
B&G currently pays 27 cents a share each quarter. The
company has boosted its payout three times since 2011, raising
its dividend nearly 60%.
On an annualized basis, B&G Foods pays $1.08 a share for a
yield of about 3.4%. It has the fourth highest yield among the 18
dividend-paying companies in the Foods-Packaged industry