The board of
The J. M. Smucker Company
) has approved additional share repurchases and declared its
quarterly dividend, thereby maintaining the trend of rewarding
its shareholders consistently.
The quarterly dividend of 52 cents will be paid on Mar 1 to
shareholders of record as of Feb 15. In addition, Smucker's board
has increased the share repurchase authorization by five million
shares. The company had also increased its share repurchase
authorization by five million common shares in Jan 2012, of which
two million shares still remain available for repurchase.
Apart from increasing share repurchases, Smucker has been
increasing its rate of quarterly and annual dividends
consistently since 2008. The company increased its quarterly
dividend from 48 cents to 52 cents in Jul 2012.
At the end of the second quarter of fiscal 2013, the company
repurchased 2.0 million shares for approximately $170.9 million.
The company's cash and cash equivalents were $203.6 million
versus $311.5 million at the end of Jul 2012.
Regular dividend payments and share buybacks reflect the
company's confidence in its fundamentals. The share buyback helps
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.
Overall, we are impressed with the company's strong portfolio
of brands, focus on innovation and promotional offerings.
Moreover, strategic acquisitions have broadened Smucker's
presence across emerging markets and added popular brands into
its portfolio. The company is cash rich and its effective
utilization of cash spurs profitability.
Smucker is scheduled to report its fiscal third quarter 2013
on Feb 15. Our proven model shows that Smucker is likely to beat
earnings because it has the right combination of two key
ingredients. A stock needs to have both a positive Earnings ESP
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #1, 2 or 3 for a positive earnings beat. The
combination of Smucker's Zacks Rank #2 (Buy) and ESP of +0.73%
makes us very confident in looking for a positive earnings beat
on Feb 15.
Other consumer staples worth considering are
B&G Foods, Inc
Flower Foods Inc.
), all of them carrying a Zacks Rank #1 (Strong Buy).
B&G FOODS CL-A (BGS): Free Stock Analysis
FLOWERS FOODS (FLO): Free Stock Analysis
INGREDION INC (INGR): Free Stock Analysis
SMUCKER JM (SJM): Free Stock Analysis Report
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