Assessing the Upcoming Dividend and Its Historical Context
Campbell Soup Co (CPB, Financial) recently announced a dividend of $0.37 per share, payable on 2024-04-29, with the ex-dividend date set for 2024-04-03. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Campbell Soup Co's dividend performance and assess its sustainability.
What Does Campbell Soup Co Do?
Over the past 150-plus years, Campbell Soup Co has evolved into a leading packaged food manufacturer in North America, with a portfolio that extends beyond its iconic red-and-white labeled canned soup. In fiscal 2023, snacks accounted for half of its revenue (50%), followed by soup (29%), other simple meals (13%), and beverages (8%). Outside its namesake, its brands include Pepperidge Farm, Goldfish, Snyder's of Hanover, Swanson, Pacific Foods, Prego, Pace, V8, and recently acquired Rao's (closed in March 2024). Nearly 90% of its revenue results from the US and the remainder from Canada and Latin America.
A Glimpse at Campbell Soup Co's Dividend History
Campbell Soup Co has maintained a consistent dividend payment record since 1986. Dividends are currently distributed on a quarterly basis.
Campbell Soup Co has increased its dividend each year since 2013. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 11 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Campbell Soup Co's Dividend Yield and Growth
As of today, Campbell Soup Co currently has a 12-month trailing dividend yield of 3.34% and a 12-month forward dividend yield of 3.34%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Campbell Soup Co's annual dividend growth rate was 1.90%. Extended to a five-year horizon, this rate decreased to 1.40% per year. And over the past decade, Campbell Soup Co's annual dividends per share growth rate stands at 5.70%.
Based on Campbell Soup Co's dividend yield and five-year growth rate, the 5-year yield on cost of Campbell Soup Co stock as of today is approximately 3.58%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2024-01-31, Campbell Soup Co's dividend payout ratio is 0.58.
Campbell Soup Co's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Campbell Soup Co's profitability 8 out of 10 as of 2024-01-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Campbell Soup Co's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Campbell Soup Co's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Campbell Soup Co's revenue has increased by approximately 2.80% per year on average, a rate that underperforms than approximately 65.25% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Campbell Soup Co's earnings increased by approximately 9.90% per year on average, a rate that underperforms than approximately 46.4% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 4.90%, which underperforms than approximately 52.35% of global competitors.
Concluding Thoughts on Campbell Soup Co's Dividend Profile
In conclusion, Campbell Soup Co's dividend payments and growth rate, when considered alongside its payout ratio, profitability, and growth metrics, present a picture of a company committed to returning value to shareholders while maintaining a solid financial foundation. The consistent dividend increases and a healthy payout ratio underscore the company's ability to balance income distribution with growth opportunities. Investors should weigh these factors as they consider Campbell Soup Co's place in their portfolios, keeping in mind the company's established market position and long-term potential. Will Campbell Soup Co continue to serve up dividends that satisfy investors' appetite for steady income? Only time will tell, but the current analysis offers a taste of the company's commitment to its dividend policy.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
