Personal Finance

B&G Foods Showing Brisk Growth, 4% Dividend Yield

Shutterstock photo

In October 2008,B&G Foods ( BGS ) announced its quarterly dividend would be cut from 21 to 17 cents a share.

The recession chewed into 2008 earnings, gnawing them down 21% from the previous year. Meanwhile, revenue growth slowed to 3% vs. 15% in 2007.

With the economic recovery, however lackluster it might be, B&G Foods has raised its dividend three times. The quarterly payout is now 27 cents a share.

The current annualized yield works out to 4.1%.

B&G Foods is showing more growth than might be expected from companies in the 4%-and-up dividend club. Usually the big dividends are associated with slow and steady plodders.

The maker of shelf-stable foods, such as Cream of Wheat and Ortega salsa and taco shells, grew earnings 61%, 48% and 22% in the past three years. Sales grew 3%, 2% and 6%.

The past two quarters have been strong. Earnings advanced 30% and most recently, 27%, as sales popped 20% and 15%.

The second quarter's 27% increase in EPS -- which was reported late Thursday -- beat the Street's estimate by almost 7%. Revenue growth was lighter than expected, which has been the case with many stocks this earnings season.

The Composite Rating, which combines all five IBD ratings into a single number, is 97. The rating runs from 1 (worst) to 99 (best).

Return on equity, a measure of financial efficiency, was 22.8% last year, up for the third year in a row.

Pretax margin was 14.9%, the best in nine years. After-tax margin in the past two quarters was 10.7% and 10.8% -- unsurpassed in at least the previous 16 quarters.

The better margins are largely the result of pricing gains and a better mix, thanks to an acquisition from Unilever that was wrapped up in late November.

B&G bought the following brands fromUnilever ( UN ): Molly McButter, Mrs. Dash, Sugar Twin, Baker's Joy, Static Guard and Kleen Guard.

The stock found support at the 50-day line Friday after erasing a sharp loss and could be building a base. It's the first pullback to the 50-day line since the stock broke out of a base on June 6.

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


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

In This Story

BGS UN

Other Topics

Investing