B&G Foods Showing Off Relative Strength

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Even though the market is in a correction,B&G Foods ( BGS ) is showing relative strength.

The stock has rallied in the past three weeks, scoring gains in heavy volume. So far this week, it's tacking on more gains.

The stock hit a record high Monday after staging an upside reversal. It notched another all-time high in Tuesday's session.

B&G Foods cleared a 33.24 buy point in a four-month consolidation June 18 in soft turnover. But big volume came in three sessions later.

Gains in high volume are signs of professional buying. At the end of the first quarter, 268 mutual funds owned shares, up from 252 funds at the end of the third quarter of 2012.

The Parsippany, N.J.-based company makes a barrage of food items such as Cream of Wheat, Mrs. Dash, Molly McButter and the Ortega line of Mexican food products. Although earnings fell 21% in 2008, they have grown by double digits each year since. Analysts polled by Thomson Reuters see profit rising 16% to $1.56 a share.

Buyouts have been key to B&G's growth. Earlier this year, the company agreed to buy Pirate Brands for about $195 million in cash. Pirate's Brands makes Pirate's Booty and Smart Puffs snacks. Last year, B&G Foods acquired New York Style and Old London brands from from Chipita America for around $62.5 million.

Besides delivering growth, B&G Foods also doles out a healthy dividend. The firm currently pays 29 cents a share quarterly. B&G last raised its dividend by 7% to the current rate of 29 cents in October.

On an annual basis, B&G Foods pays $1.16 a share to shareholders, which works out to a yield of about 3.4%. B&G Foods has the third-highest yield among the 17 dividend-paying stocks in the Foods-Packaged group.



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



This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: BGS

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