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  • Consumer Staples Stock Valuation Update 7-21-14 2 comments
    Jul 22, 2014 4:40 PM
    Grocery Portfolio 07-21-14

    The Q2-14 dividend is used for yield calculations. The second Div/EPS ratio has the 2015 EPS projection as the denominator. "Div 1 yr" measures the change in the dividend since Q2-13. "Div 5 yr" measures the average change in the dividend since Q2-09. FLO announced a dividend increase for Q2-14, which was only 3 quarters after the last increase. The last increase was only 6.67%. FLO's last three dividend increases have been well below trend.


      12-31-1207-21DivCurrentDiv/Div/Percent Change
    CompanyPricePrice/QuaterYieldEPS14EPS15PricePr+DivEPS14TargetDiv 1yrDiv 5yr

    ArchDanMidlnd(NYSE:ADM)43.4048.080.2402.0032 %28 %10.7811.89-6.7714.2226.3214.29
    Campbell(NYSE:CPB)43.2844.160.3132.8349 %48 %2.033.481.201.387.765.00
    Coke(NYSE:KO)41.3142.400.3052.8858 %54 %2.644.12-6.28-0.278.939.76
    ConAgra(NYSE:CAG)33.7030.650.2503.2646 %44 %-9.05-7.57-7.26-16.910.006.32
    Colgate(NYSE:CL)65.2168.760.3602.0948 %44 %5.446.55-3.553.855.8812.73
    Ingredion(NYSE:INGR)68.4678.010.4202.1530 %28 %13.9515.18-3.835.5910.5340.00
    Clorox(NYSE:CLX)92.7690.900.7103.1266 %64 %-2.01-0.47-4.85-0.9210.9410.87
    Flowers(NYSE:FLO)21.4720.180.1202.3847 %41 %-6.01-4.89-2.868.0912.4615.98
    General Mills(NYSE:GIS)49.9152.860.4103.1058 %54 %5.917.55-2.084.3524.2414.89
    Hershey(NYSE:HSY)97.2393.280.4852.0848 %43 %-4.06-3.06-0.970.8015.4812.55
    Hormel(NYSE:HRL)45.1748.010.2001.6736 %31 %6.297.17-3.0812.6717.6522.11
    Kellogg(NYSE:K)61.0766.100.4602.7846 %43 %8.2410.50-1.24-1.294.557.06
    Kimberly-Clark(NYSE:KMB)104.46112.310.8402.9955 %51 %7.519.120.334.783.708.00
    Lancaster(NASDAQ:LANC)88.1591.340.4401.9345 %42 %3.624.62-2.2415.8510.0010.88
    McCormick(NYSE:MKC)68.9270.270.3702.1145 %42 %1.963.03-4.640.358.8210.83
    Pepsi(NYSE:PEP)82.9489.910.6552.9158 %53 %8.409.98-3.613.7215.429.11
    Procter&Gamble(NYSE:PG)81.4180.280.6433.2061 %57 %-1.390.19-2.330.136.649.20
    JM Smucker(NYSE:SJM)103.62105.090.5802.2141 %38 %1.422.54-2.59-2.4311.5413.14

    Average    2.5448 %45 %3.094.44-3.153.008.7112.93

    The SPY [S&P 500 EFT] is up 7.05% year to date. - and with unreinvested dividends is up 8.00% year to date.
    The KXI [Consumer Staples ETF] is up 4.49% year to date - and with unreinvested dividends is up 5.85%.
    With the 10 Treasury at 2.47% and the sector average yield [on Q2 Divs] at 2.54% - the spread is 7 basis points.
    * The change in the dividend is for the last twelve months and not year to date.

    Dividend dates are:

    ADM : 06-04-14CPB: 04-27-14KO : 09-30-14CAG: 08-27-14CL: 08-14-14
    INGR : 07-24-14CLX : 05-08-14FLO: 06-18-14GIS : 07-31-14HSY: 06-12-14
    HRL : 08-14-14K : 06-15-14KMB: 07-01-14LANC: 06-29-14MKC: 04-20-14
    PEP: 06-29-14PG: 08-14-14SJM: 06-01-14KXI: 06-20-14SPY: 06-20-14

    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%
    Mar 2014: 2.53%June: 2.54%Sept:Dec:

    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, HSY, HRL, LANC, and MKC. Their current average yield is 1.74%.
    The following had CAGR projections under 8.5% but over 7.8%: CL and FLO. Their current average yield is 2.05%.
    The following had CAGR projections under 7.8%: CPB, KO, CAG, CLX, GIS, K, KMB, PEP, PG and SJM. Their current average yield is 2.69%.

    Price/Earnings Ratios 07-21
    SJM started fiscal 2015 at the beginning of calendar Q1-14


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

    ADM3.472.302.333.033.48-33.721.3030.0414.8520.6415.8713.823.402.9016.50%
    CPB2.542.442.642.542.58-3.948.20-3.791.5716.7317.3917.122.602.513.54%
    KO1.922.012.082.092.244.693.480.487.1820.3820.2918.932.122.043.83%
    CAG1.751.842.162.172.255.1417.390.463.6914.1914.1213.622.352.216.45%
    CL2.522.682.842.993.316.355.975.2810.7024.2123.0020.773.052.963.01%
    INGR4.685.575.055.526.0619.02-9.349.319.7815.4514.1312.875.765.455.62%
    CLX3.934.104.314.324.474.335.120.233.4721.0921.0420.344.384.262.78%
    FLO0.640.690.911.021.187.8131.8812.0915.6922.1819.7817.101.050.986.86%
    GIS2.482.562.692.823.023.235.084.837.0919.6518.7417.503.152.966.74%
    HSY2.823.243.724.084.5114.8914.819.6810.5425.0822.8620.684.154.052.45%
    HRL1.741.861.972.202.546.905.9111.6815.4524.3721.8218.902.242.173.18%
    K3.383.613.773.994.236.804.435.846.0217.5316.5715.634.253.8410.28%
    KMB4.805.255.776.126.609.389.906.077.8419.4618.3517.026.206.052.45%
    LANC3.843.453.983.934.21-10.1615.36-1.267.1222.9523.2421.703.993.853.56%
    MKC2.793.043.133.293.568.962.965.118.2122.4521.3619.743.303.251.52%
    PEP4.404.104.374.544.90-6.826.593.897.9320.5719.8018.354.604.502.20%
    PG3.953.854.054.194.51-2.535.193.467.6419.8219.1617.804.284.162.86%
    SJM4.814.735.375.646.03-1.6613.535.036.9119.5718.6317.436.145.884.61%

    Average     8.216.028.4320.3519.2317.74   

    x

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Comments (2)
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  • bsfitzhugh
    , contributor
    Comments (40) | Send Message
     
    Thanks for the update. Own ADM, KO and PG. ADM seems to have some of the better growth prospects for the overall group and at reasonable value. INGR looks interesting as well and worth a deeper look. Seems they've had some temporary challenges likely dampening the stock price. I'd expect those factors (weather, Argentinean currency devaluation) to average out over the long run...
    23 Jul, 02:00 AM Reply Like
  • Factoids
    , contributor
    Comments (470) | Send Message
     
    Author’s reply » (1) The components of the sector that are in my coverage universe have had much higher dividend growth than EPS growth - and that is a very bad trend (or maybe I should call it an 'bad omen') for long term dividend growth.
    (2) Most of this sector has very good 'earnings projection accuracy'. ADM (and to a lesser degree FLO) are exceptions. So those two should have higher "yield + CAGRs".
    (3) This group has a good EPS growth forecast for 2015. These are global companies. It could be the case that the global economy is well behind the USA economy is having its recovery. If the 2015 earning projections start to fall, then my CAGR projections for most of these stocks will also fall. I try to have conservative CAGRs. I could be guilty of having "moderate" CAGRs at this point in time.
    (4) I share bsfitzhugh's opinion that INGR looks interesting. I would also say that HRL and HSY look good.
    23 Jul, 07:13 AM Reply Like
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