B&G Foods Offers Growth, Large Yield

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Food stocks are not generally issues that whet the appetites of growth investors. ButB&G Foods ( BGS ) does offer growth, as well as a juicy dividend yield.

While the name B&G Foods may not ring a bell, the Parsippany, N.J.-based company makes products that may be in your fridge or pantry. Its long list of offerings include Cream Of Wheat, Molly McButter, Mrs. Dash and Ortega Mexican food products.

Since coming public in 2007, the company has delivered profit growth in all but one year. B&G's earnings fell 21% in 2008, but grew by double digits the next four years. It has a three-year earnings growth rate of 29%, which is bigger than that of giantsGeneral Mills ( GIS ),Kellogg ( K ) andH.J. Heinz ( HNZ ). B&G also has a three-year Earnings Stability Factor of 5, indicating a rock steady record of profits.

A slew of acquisitions have helped drive growth over the year. B&G recently completed its buyout of a couple of food brands from Chipita America for about $62.5 million in cash.

The company also boasts a return on equity of 22.4% for 2012, down slightly from 22.8% in 2011.

B&G has ramped up its dividend in the past two years. It has lifted its quarterly payout by 71% to 29 cents a share from 17 cents a share in early 2011. The company last hiked its payout in October.

On an annual basis, B&G pays $1.16 a share, which works out to a yield of about 3.7% at current levels. Only rivalKraft Foods Group ( KRFT ) offers a higher yield in the Foods-Packaged group.

B&G broke out from a cup with handle in February, but that quickly failed. It's now forming a new consolidation with a potential buy point at 33.24. The long sideways action has punched its RS Rating down to a 56.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Personal Finance , Investing Ideas
Referenced Symbols: BGS , GIS , HNZ , K , KRFT

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