McCormick & Company, Inc
) has approved an additional share repurchase program, thereby
maintaining the trend of returning value to its shareholders from
time to time, depending on market conditions.
Under the latest program, the company's board has authorized
the repurchase of up to $400.0 million of its common stock. The
company expects to complete its current share repurchase
authorization of $400 million, which was authorized in Jun 2010,
Share buybacks help the company reduce outstanding share
count, thereby increasing earnings per share and return on
equity. Apart from bolstering shareholder value, this strategic
move will also lift the relatively undervalued share price.
Other than share buybacks, McCormick's board also declared a
quarterly dividend of 34 cents, which will be paid on Apr 29 to
shareholders of record as of Apr 15, marking the 89th year of
consecutive dividend payments.
In fact, McCormick regularly increases shareholders' return in
the form of dividend and share repurchase activities. McCormick
has rewarded its shareholders with nearly $1 billion of cash in
the past five years through dividends and share repurchases.
Regular dividend payments and share buybacks reflect the
company's confidence in its fundamentals.
Most recently, McCormick delivered better-than-expected first
quarter fiscal 2013 earnings of 57 cents per share. Earnings were
ahead of the prior-year quarter by 3.6%, driven by a favorable
tax rate, higher income from unconsolidated operations and a
lower share count. Sales also beat the Zacks Consensus Estimate
and grew 3% on a year over year basis, owing to positive volume
and product mix and pricing actions in response to high input
costs, especially in the consumer business segment.
Overall, we are encouraged by the new innovations, investment
in brand marketing and expansion in emerging markets. However,
sluggish demand from quick service restaurants in the industrial
segment keeps us on the sidelines in the near term.
McCormick holds a Zacks Rank #4 (Sell). Other food companies
that warrant a look include
Flower Foods, Inc
ConAgra Foods Inc
). While Flower Foods carries a Zacks Rank #1 (Strong Buy),
Kellogg and ConAgra hold a Zacks Rank #2 (Buy).
CONAGRA FOODS (CAG): Free Stock Analysis
FLOWERS FOODS (FLO): Free Stock Analysis
KELLOGG CO (K): Free Stock Analysis Report
MCCORMICK & CO (MKC): Free Stock Analysis
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