Barrons / comments on Kellogg (today) ................................................
(This was in : Yes, You Can Retire on Dividends. 10 Stocks to Build an Income Stream for the Long Haul. )
Kellogg
Kellogg (K), whose signature brands include Special K, Rice Krispies, and Pringles, has lagged behind the market this year with a flattish return. But the company’s foundation looks sound, helped by its plant-based proteins under the Morningstar Farms Incogmeato label and others.
The company notched organic sales growth of 6% in 2020, lifted by gains across all of its regions globally and its four major product categories: snacks, cereal, frozen food, and noodles. That helped offset headwinds that included Covid-19 and divestitures.
What’s more, Kellogg paid a quarterly dividend of 57 cents a share throughout the pandemic-challenged year, and it plans to boost it by a penny in the second quarter. The stock was recently yielding 3.7%.
“This means returning more cash to share owners, and it reflects our confidence in the business,” CFO Amit Banati told analysts during the company’s fourth-quarter earnings call in February.
The company earned $4.03 a share on an adjusted basis last year, up fractionally from $4 in 2019, and the FactSet consensus for this year is $4.01 a share. It recently fetched 15.3 times its FactSet consensus adjusted 2021 profit estimate.
Katz describes Kellogg as a “top-tier consumer-staples company selling at a very attractive valuation.”
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