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Consumer Staples Stock Valuation Update 7-21-14

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.


    12-31-12 07-21 Div Current Div/ Div/ Percent Change
Company Price Price /Quater Yield EPS14 EPS15 Price Pr+Div EPS14 Target Div 1yr Div 5yr

ArchDanMidlnd (NYSE:ADM) 43.40 48.08 0.240 2.00 32 % 28 % 10.78 11.89 -6.77 14.22 26.32 14.29
Campbell (NYSE:CPB) 43.28 44.16 0.313 2.83 49 % 48 % 2.03 3.48 1.20 1.38 7.76 5.00
Coke (NYSE:KO) 41.31 42.40 0.305 2.88 58 % 54 % 2.64 4.12 -6.28 -0.27 8.93 9.76
ConAgra (NYSE:CAG) 33.70 30.65 0.250 3.26 46 % 44 % -9.05 -7.57 -7.26 -16.91 0.00 6.32
Colgate (NYSE:CL) 65.21 68.76 0.360 2.09 48 % 44 % 5.44 6.55 -3.55 3.85 5.88 12.73
Ingredion (NYSE:INGR) 68.46 78.01 0.420 2.15 30 % 28 % 13.95 15.18 -3.83 5.59 10.53 40.00
Clorox (NYSE:CLX) 92.76 90.90 0.710 3.12 66 % 64 % -2.01 -0.47 -4.85 -0.92 10.94 10.87
Flowers (NYSE:FLO) 21.47 20.18 0.120 2.38 47 % 41 % -6.01 -4.89 -2.86 8.09 12.46 15.98
General Mills (NYSE:GIS) 49.91 52.86 0.410 3.10 58 % 54 % 5.91 7.55 -2.08 4.35 24.24 14.89
Hershey (NYSE:HSY) 97.23 93.28 0.485 2.08 48 % 43 % -4.06 -3.06 -0.97 0.80 15.48 12.55
Hormel (NYSE:HRL) 45.17 48.01 0.200 1.67 36 % 31 % 6.29 7.17 -3.08 12.67 17.65 22.11
Kellogg (NYSE:K) 61.07 66.10 0.460 2.78 46 % 43 % 8.24 10.50 -1.24 -1.29 4.55 7.06
Kimberly-Clark (NYSE:KMB) 104.46 112.31 0.840 2.99 55 % 51 % 7.51 9.12 0.33 4.78 3.70 8.00
Lancaster (NASDAQ:LANC) 88.15 91.34 0.440 1.93 45 % 42 % 3.62 4.62 -2.24 15.85 10.00 10.88
McCormick (NYSE:MKC) 68.92 70.27 0.370 2.11 45 % 42 % 1.96 3.03 -4.64 0.35 8.82 10.83
Pepsi (NYSE:PEP) 82.94 89.91 0.655 2.91 58 % 53 % 8.40 9.98 -3.61 3.72 15.42 9.11
Procter&Gamble (NYSE:PG) 81.41 80.28 0.643 3.20 61 % 57 % -1.39 0.19 -2.33 0.13 6.64 9.20
JM Smucker (NYSE:SJM) 103.62 105.09 0.580 2.21 41 % 38 % 1.42 2.54 -2.59 -2.43 11.54 13.14

Average         2.54 48 % 45 % 3.09 4.44 -3.15 3.00 8.71 12.93

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.
Click to enlarge

Dividend dates are:

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

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:
Click to enlarge

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 Growth Price/EPS 14 EPS Range
Co. 2011 2012 2013 2014 2015 11-12 12-13 13-14 14-15 2013 2014 2015 High Low Range

ADM 3.47 2.30 2.33 3.03 3.48 -33.72 1.30 30.04 14.85 20.64 15.87 13.82 3.40 2.90 16.50%
CPB 2.54 2.44 2.64 2.54 2.58 -3.94 8.20 -3.79 1.57 16.73 17.39 17.12 2.60 2.51 3.54%
KO 1.92 2.01 2.08 2.09 2.24 4.69 3.48 0.48 7.18 20.38 20.29 18.93 2.12 2.04 3.83%
CAG 1.75 1.84 2.16 2.17 2.25 5.14 17.39 0.46 3.69 14.19 14.12 13.62 2.35 2.21 6.45%
CL 2.52 2.68 2.84 2.99 3.31 6.35 5.97 5.28 10.70 24.21 23.00 20.77 3.05 2.96 3.01%
INGR 4.68 5.57 5.05 5.52 6.06 19.02 -9.34 9.31 9.78 15.45 14.13 12.87 5.76 5.45 5.62%
CLX 3.93 4.10 4.31 4.32 4.47 4.33 5.12 0.23 3.47 21.09 21.04 20.34 4.38 4.26 2.78%
FLO 0.64 0.69 0.91 1.02 1.18 7.81 31.88 12.09 15.69 22.18 19.78 17.10 1.05 0.98 6.86%
GIS 2.48 2.56 2.69 2.82 3.02 3.23 5.08 4.83 7.09 19.65 18.74 17.50 3.15 2.96 6.74%
HSY 2.82 3.24 3.72 4.08 4.51 14.89 14.81 9.68 10.54 25.08 22.86 20.68 4.15 4.05 2.45%
HRL 1.74 1.86 1.97 2.20 2.54 6.90 5.91 11.68 15.45 24.37 21.82 18.90 2.24 2.17 3.18%
K 3.38 3.61 3.77 3.99 4.23 6.80 4.43 5.84 6.02 17.53 16.57 15.63 4.25 3.84 10.28%
KMB 4.80 5.25 5.77 6.12 6.60 9.38 9.90 6.07 7.84 19.46 18.35 17.02 6.20 6.05 2.45%
LANC 3.84 3.45 3.98 3.93 4.21 -10.16 15.36 -1.26 7.12 22.95 23.24 21.70 3.99 3.85 3.56%
MKC 2.79 3.04 3.13 3.29 3.56 8.96 2.96 5.11 8.21 22.45 21.36 19.74 3.30 3.25 1.52%
PEP 4.40 4.10 4.37 4.54 4.90 -6.82 6.59 3.89 7.93 20.57 19.80 18.35 4.60 4.50 2.20%
PG 3.95 3.85 4.05 4.19 4.51 -2.53 5.19 3.46 7.64 19.82 19.16 17.80 4.28 4.16 2.86%
SJM 4.81 4.73 5.37 5.64 6.03 -1.66 13.53 5.03 6.91 19.57 18.63 17.43 6.14 5.88 4.61%

Average           8.21 6.02 8.43 20.35 19.23 17.74      

Click to enlarge

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