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Campbell Soup Up 31% This Year, Dividend Yields 2.6%

By: Investor's Business Daily
Posted: 6/18/2013 4:48:00 PM
Referenced Stocks: CPB

Something's cooking atCampbell Soup ( CPB ).

The maker of soup, Pepperidge Farm cookies and Prego spaghetti sauce has posted two straight quarters of accelerating sales and profit growth after several quarters of flat-to-declining results.

The long-languishing stock has followed suit, rising 31% this year, far outpacing the S&P 500.

Meanwhile, the annual dividend of $1.16 per share works out to an annual yield of 2.6%, better than the S&P average of 2.4%.

CEO Denise Morrison has bolstered the company's flagship soup business and pushed the company into new products and markets, especially China.

Campbell Soup recently acquired Bolthouse Farms, which makes juice, salad dressing and bagged carrots. The acquisition was behind the company's 15% sales increase in the latest quarter, the biggest gain in years. Profit for the period rose 11%, the best in seven quarters.

"We are strengthening our core portfolio through consistent excellence in execution, optimized investment and sustaining product innovation. We are also expanding into higher-growth categories, adjacencies and geographies," Morrison said in the company's May 20 earnings report.

Other recent acquisitions include Denmark-based Kelsen Group, a maker of cookies and snacks for sale in 85 countries, including China. Campbell also bought Plum Organics, a top provider of premium organic baby food.

Campbell formed a saucer-with-handle base starting in August 2010. It cleared the 37.26 entry in early February and is testing resistance at its 10-week line.

A pop above the line would give shareholders a follow-on buying opportunity. The recent correction may also be part of a new base.