Investors looking for an A-rated quality company with a growing 3% dividend yield should look at the soup favorite – Campbell Soup Company. The company just increased its dividend 7.6% but still has room for growth. Campbell’s is rated a 5-star stock by S&P indicating a strong buy recommendation. The stock has a 12-month price target of $48, an increase of 15% from its current price.
Campbell Soup Company (CPB) recently announced that the company’s Board of Directors has approved an increase in its quarterly dividend from $0.29 per share to $0.312 per share, an increase of approximately 7.6%. The quarterly dividend is payable Oct. 28, 2013 to shareholders of record at the close of business Oct. 8, 2013.
“This dividend increase is another step forward as we execute our plans to drive shareholder value by delivering sustainable, profitable net sales growth,” said Denise Morrison, Campbell’s President and Chief Executive Officer. “We are encouraged by the progress we’ve made and are confident in our long-term growth prospects as we strengthen our core business and expand into higher-growth spaces.”
The company has paid dividends since it became public in 1954. The last quarterly dividend increase was to $0.29 per share from $0.275 per share on Nov. 1, 2010.
We look for Campbell’s to focus on new products, expanding its presence in packaged fresh foods, and growing sales in some international markets. We expect at least near-term challenges in U.S. beverage, North American foodservice, and the Australian businesses.
The company has long term targets for annual sales growth of 3% to 4% and 5% to 7% annual growth in earnings per share. Over time, we expect that growth to be helped by new or enhanced products. Areas of new product focus, in our view, will include expansion of the Goldfish snack brand, development of the dinner sauce category, and introduction of a Homestyle soup line. We see the Bolthouse business aiming to have more of a presence in the snack food area with a ShakeDowns carrot product that includes seasonings.
Investors should look to add Campbell’s to their Monthly Income Plan for both current income and future growth.
