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  • Consumer Staples Or "Grocery List" Stock Update 3-14-14 0 comments
    Mar 16, 2014 5:19 PM
    Grocery Portfolio 03-14-14

    The Q1-14 dividend is used for yield calculations. The second Div/EPS ratio has the 2014 EPS projection as the denominator. "Div 1 yr" measures the change in the dividend since Q1-13. "Div 5 yr" measures the average change in the dividend since Q1-09. GIS has announced a $0.41/share div in Q2-14. CL has announced a $0.36/share div in Q4-14.


      12-31-1203-14DivCurrentDiv/Div/Percent Change
    CompanyPricePrice/QuaterYieldEPS14EPS15PricePr+DivEPS14TargetDiv 1yrDiv 5yr

    ArDanMidlndADM43.4042.510.2402.2630 %28 %-2.05-1.61-0.623.7526.3214.29
    CampbellCPB43.2844.050.3132.8449 %47 %1.782.500.800.717.765.00
    CokeKO41.3138.170.3053.2058 %54 %-7.60-7.60-5.83-2.568.939.76
    ConAgraCAG33.7029.420.2503.4045 %42 %-12.70-11.96-4.70-10.880.006.32
    ColgateCL65.2163.830.3402.1345 %41 %-2.12-1.59-2.90-0.689.6814.00
    IngredionINGR68.4666.190.4202.5430 %27 %-3.32-2.76-3.14-2.7361.5440.00
    CloroxCLX92.7687.370.7103.2564 %60 %-5.81-5.05-1.76-0.2210.9410.87
    FlowersFLO21.4719.920.1132.2644 %38 %-7.22-6.70-1.903.745.4413.73
    General MillsGIS49.9149.770.3803.0553 %49 %-0.280.480.00-0.1215.1515.35
    HersheyHSY97.23106.200.4851.8347 %43 %9.239.720.245.2915.4812.55
    HormelHRL45.1747.130.2001.7035 %32 %4.344.78-0.444.3517.6522.11
    KelloggK61.0760.900.4603.0246 %43 %-0.280.47-0.99-3.474.557.06
    Kimberly-ClarkKMB104.46109.660.8403.0655 %51 %4.985.750.333.323.708.00
    LancasterLANC88.1595.310.4401.8542 %40 %8.128.123.234.8815.7910.88
    McCormickMKC68.9267.650.3702.1945 %42 %-1.84-1.35-5.51-4.008.8210.83
    PepsiPEP82.9481.000.5682.8050 %46 %-2.34-1.65-4.03-2.155.586.71
    Procter&GamblePG81.4178.980.6033.0557 %53 %-2.98-2.24-1.63-0.117.1110.13
    JM SmuckerSJM103.6296.180.5802.4142 %38 %-7.18-6.62-3.63-6.5111.5416.25

    Average    2.6047 %42 %-1.52-0.95-1.80-0.4113.1112.99

    The SPY [S&P 500 EFT] is up -0.02% year to date. - and with unreinvested dividends is up -0.02% year to date.
    The KXI [Consumer Staples ETF] is up -2.49% year to date - and with unreinvested dividends is up -2.49%.
    With the 10 Treasury at 2.65% and the sector average yield [on Q1 Divs] at 2.6% - the spread is -5 basis points.
    * The change in the dividend is for the last twelve months and not year to date.

    Dividend dates are:

    ADM : 03-12-14CPB: 01-26-14KO : 03-31-14CAG: 03-03-14CL: 05-15-14
    INGR : 01-26-14CLX : 02-14-14FLO: 03-13-14GIS : 02-02-14HSY: 03-13-14
    HRL : 02-14-14K : 03-16-14KMB: 01-02-14LANC: 03-30-14MKC: 01-13-14
    PEP: 01-01-14PG: 02-17-14SJM: 03-02-14KXI: 06-20-14SPY: 03-16-14

    Historical yields for the sector:

    Mar 2010: 2.77%June: 2.92%Sept: 2.92%Dec: 2.78%
    Mar 2011: 2.84%June: 2.76%Sept: 2.94%Dec: 2.81%
    Mar 2012: 2.81%June: 2.82%Sept: 2.80%Dec: 2.81%
    Mar 2013: 2.42%June: 2.47%Sept: 2.58%Dec: 2.48%

    The relationship between CAGR projections and yields: While yields are also strongly risk, the influence of dividend growth projections can also be seen.
    The following had CAGR projections over 8.5%: ADM, INGR, FLO, HSY, HRL, LANC and MKC. Their current average yield is 1.85%.
    The following had CAGR projections under 8.5% but over 7.8%: CL. Their current average yield is 2.13%.
    The following had CAGR projections under 7.8%: CPB, KO, CAG, CLX, GIS, K, KMB, PEP, PG and SJM. Their current average yield is 2.84%.
    The relationship between credit ratings and yields: While yields are also strongly influenced by dividend growth and dividend coverage, the influence of credit ratings can also be seen.
    The following had corporate credit ratings of AA+. AA, or AA-: CL and SJM Their current average yield is 2.15%.
    The following had corporate credit ratings of A+. A, or A-: ADM, CPB, KO, HSY, HRL, LANC, PEP and PG. Their current average yield is 2.24%.
    The following had credit ratings equal to BBB or BBB-: CAG and KMB. Their current average yield is 3.18%.
    The following had corporate credit ratings of BB+, BB or BB-: CLX. Their current average yield is 2.93%.
    The following had corporate credit ratings of B, B- or were note rated: INGR, FLO and MKC. Their current average yield is 2.15%.

    Price/Earnings Ratios 03-14
    SJM started fiscal 2014 at the beginning of calendar Q1-13


     EPS / Share% EPS GrowthPrice/EPS14 EPS Range
    Co.2011201220132014201511-1212-1313-1414-15201320142015HighLowRange

    ADM3.472.302.333.233.39-33.721.3038.634.9518.2413.1612.543.463.0014.24%
    CPB2.542.442.642.532.65-3.948.20-4.174.7416.6917.4116.622.552.482.77%
    KO1.922.012.082.102.244.693.480.966.6718.3518.1817.042.362.0017.14%
    CAG1.751.842.162.232.385.1417.393.246.7313.6213.1912.362.242.201.79%
    CL2.522.682.843.013.326.355.975.9910.3022.4821.2119.233.142.946.64%
    INGR4.685.575.055.566.1319.02-9.3410.1010.2513.1111.9010.805.765.455.58%
    CLX3.934.104.314.464.774.335.123.486.9520.2719.5918.324.544.383.59%
    FLO0.640.690.911.031.177.8131.8813.1913.5921.8919.3417.031.061.005.83%
    GIS2.482.562.692.883.103.235.087.067.6418.5017.2816.052.942.833.82%
    HSY2.823.243.724.134.5614.8914.8111.0210.4128.5525.7123.294.194.092.42%
    HRL1.741.861.972.262.526.905.9114.7211.5023.9220.8518.702.312.195.31%
    K3.383.613.774.004.246.804.436.106.0016.1515.2214.364.253.928.25%
    KMB4.805.255.776.126.609.389.906.077.8419.0117.9216.626.226.003.59%
    LANC3.843.453.984.154.41-10.1615.364.276.2723.9522.9721.614.204.102.41%
    MKC2.793.043.133.263.568.962.964.159.2021.6120.7519.003.313.232.45%
    PEP4.404.104.374.524.89-6.826.593.438.1918.5417.9216.564.564.501.33%
    PG3.953.854.054.224.57-2.535.194.208.2919.5018.7217.284.284.182.37%
    SJM4.814.735.375.586.04-1.6613.533.918.2417.9117.2415.925.615.551.08%

    Average     8.217.588.2119.5718.2516.85   

    Total Return Expectations


    CoYieldCAGRTotal Rtn

    ADM1.79%9.00%10.79%
    CPB2.63%6.50%9.13%
    KO2.93%6.50%9.43%
    CAG3.40%7.50%10.90%
    CL2.13%7.80%9.93%
    INGR2.30%9.10%11.40%
    CLX2.93%7.00%9.93%
    FLO2.14%9.50%11.64%
    GIS2.65%7.70%10.35%
    HSY1.58%9.50%11.08%
    HRL1.44%9.90%11.34%
    K2.89%7.00%9.89%
    KMB2.95%7.00%9.95%
    LANC1.68%9.00%10.68%
    MKC2.01%8.50%10.51%
    PEP2.80%6.50%9.30%
    PG3.05%7.50%10.55%
    SJM2.16%7.50%9.66%

    Average2.42%7.94%10.36%

    The stats below are the ones I consider "the good stuff". For example -- high growth stocks should have the higher price to earnings ratios and the lower yields. But do they really? In this sector, this is the case. And that is how it should be. In other sectors, this logical correlation fails to materialize. Why? There are a variety of reasons. This is one of the issues I will address when I finally publish my update on Health Care REITs. And Health Care REITs is one of the sectors where the "logical" valuations fail to happen.

    The Predictive Power of the Dividend/EPS Ratio on Valuations:

    The following stocks had Q1-14 Dividend/EPS ratios of less than 45%: FLO, HRL, LANC and SJM. Their YTD mean price gain = -0.48% and 2 of the 4 beat the sector mean yearly price gain [-1.52%]. Their mean yield = 2.05% and they had an average price/earnings ratio = 20.10.

    The following had Q1-14 Dividend/EPS ratios of more than 45% - but less than 52%: CPB, CL, HSY, K, MKC and PEP. Their YTD mean price gain = 0.74% and 3 of the 6 beat the sector mean yearly price gain. Their mean yield = 2.47% - and they sold at an average price/earnings ratio = 19.70.

    The following companies had Q1-14 Dividend/EPS ratios of more than 52%: KO, CLX, GIS, KMB and PG. Their YTD mean price gain = -2.34% and 2 of the 5 beat the sector mean yearly price gain. Their mean yield = 3.12% - and they sold at an average price/earnings ratio of 18.34.

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