Few stocks can matchB&G Foods (
) as an income stock that also has strong fundamentals.
IBD ran a screen with these factors: an annualized dividend
yield of at least 3.5%; a Composite Rating of 95 or better; a
best-possible A in Sales + Profit Margins + Return on equity; an
up-down volume ratio of at least 1.1; and daily trading volume of
at least 350,000 shares daily.
In IBD's database, only B&G and three other stocks met the
criteria. (The three other stocks wereCopa Holdings (
),Giant Interactive (
) andSeagate Technology (
New Jersey-based B&G Foods makes shelf-stable food
products and household products, such as Cream of Wheat, Ortega
salsa and taco shells, Regina vinegars and Static Guard.
Earnings growth in the past three quarters on a year-ago basis
has been strong -- 30%, 27% and in Q3, 40%. Revenue grew 20%, 15%
and 16% in the same periods.
The Street expects EPS growth to be 30% in Q4 on a 20% pop in
The company has benefited from a November 2011 acquisition
) of brands that included Mrs. Dash, Sugar Twin, Baker's Joy,
Molly McButter, Static Guard and Kleen Guard.
The November 2011 acquisition contributed $20.2 million of the
$21.2 million revenue increase for the third quarter.
On the chart, B&G Foods is currently shaping a
second-stage pattern. The stock recently cleared resistance
around 31.05, which could serve as an entry for an aggressive
Volume was 59% above average.
The stock is lingering near this alternative buy point.
There are risks associated with B&G Foods.
Commodity prices -- such as those for agricultural products,
meat and poultry -- could hurt margins, should inflation develop.
B&G tries to lock in long-term contracts for protection.
The company's debt to equity ratio is 302%, which as the
company says in its 10-K, "could restrict our ability to pay
B&G Foods also has some concentration risks. In
2011,Wal-Mart Stores (WMT) accounted for almost 18% of net