In October 2008,B&G Foods (
) announced its quarterly dividend would be cut from 21 to 17
cents a share.
The recession chewed into 2008 earnings, gnawing them down 21%
from the previous year. Meanwhile, revenue growth slowed to 3%
vs. 15% in 2007.
With the economic recovery, however lackluster it might be,
B&G Foods has raised its dividend three times. The quarterly
payout is now 27 cents a share.
The current annualized yield works out to 4.1%.
B&G Foods is showing more growth than might be expected
from companies in the 4%-and-up dividend club. Usually the big
dividends are associated with slow and steady plodders.
The maker of shelf-stable foods, such as Cream of Wheat and
Ortega salsa and taco shells, grew earnings 61%, 48% and 22% in
the past three years. Sales grew 3%, 2% and 6%.
The past two quarters have been strong. Earnings advanced 30%
and most recently, 27%, as sales popped 20% and 15%.
The second quarter's 27% increase in EPS -- which was reported
late Thursday -- beat the Street's estimate by almost 7%. Revenue
growth was lighter than expected, which has been the case with
many stocks this earnings season.
The Composite Rating, which combines all five IBD ratings into
a single number, is 97. The rating runs from 1 (worst) to 99
Return on equity, a measure of financial efficiency, was 22.8%
last year, up for the third year in a row.
Pretax margin was 14.9%, the best in nine years. After-tax
margin in the past two quarters was 10.7% and 10.8% --
unsurpassed in at least the previous 16 quarters.
The better margins are largely the result of pricing gains and
a better mix, thanks to an acquisition from Unilever that was
wrapped up in late November.
B&G bought the following brands fromUnilever (
): Molly McButter, Mrs. Dash, Sugar Twin, Baker's Joy, Static
Guard and Kleen Guard.
The stock found support at the 50-day line Friday after
erasing a sharp loss and could be building a base. It's the first
pullback to the 50-day line since the stock broke out of a base
on June 6.