8 Dividend Stocks to Transform Your Portfolio: Part 2

Includes: BGS, HON, NSC, NVO
by: Holly Thompson

With so much uncertainty left in the markets this summer, I am finding myself gravitating more and more towards companies that offer solid dividends and good gains this year. I have researched another four companies that are known for consistently paying shareholder dividends and a solid backbone for their organization (click here for a discussion of the first 4 stocks)

B & G Foods, Inc. (NYSE:BGS) manufactures, sells and distributes a diversified portfolio of high-quality, shelf-stable foods across the United States, Canada and Puerto Rico. B&G Foods’ products include hot cereals, jams, jellies and fruit spreads, canned meats and beans, spices, seasonings, marinades, hot sauces, wine vinegar, maple syrup, molasses, salad dressings, Mexican-style sauces, taco shells and kits, salsas, pickles and peppers and other specialty food products.

B&G Foods competes in the retail grocery, food service, specialty store, private label, club and mass merchandiser channels of distribution. B&G Foods’ products are marketed under many recognized brands, including Ac’cent, B&G, B&M, Brer Rabbit, Cream of Rice, Cream of Wheat, Emeril’s, Grandma’s Molasses, Joan of Arc, Las Palmas, Maple Grove Farms of Vermont, Ortega, Polaner, Red Devil, Regina, San Del, Sa-són Ac’cent, Trappey’s, Underwood, Vermont Maid and Wright’s.

B & G Foods net sales for the second quarter of 2011 increased 6.9 percent to $129.4 million from $121.1 million for the second quarter of 2010. This $8.3 million increase was attributable to an increase in unit volume of $11.3 million offset by a net decrease in pricing of $1.7 million and an increase in coupon expenses of $1.3 million. Net sales of the Company's Don Pepino and Sclafani brands, which were acquired during the fourth quarter of 2010, contributed $3.5 million to the overall unit volume increase for the second quarter. Gross profit for the second quarter of 2011 increased 7.0 percent to $42.2 million from $39.4 million in the second quarter of 2010. Gross profit expressed as a percentage of net sales increased 0.1 percentage points to 32.6 percent for the second quarter of 2011 from 32.5 percent in the second quarter of 2010.

The increase in gross profit expressed as a percentage of net sales was primarily attributable to a sales mix shift to higher margin products. This mix shift offset the net decrease in pricing and slightly higher input costs. Operating income increased 8.3 percent to $26.3 million for the second quarter of 2011, from $24.3 million in the second quarter of 2010. The Company's reported net income was $12.6 million, or $.26 per diluted share, for the second quarter of 2011, as compared to reported net income of $8.5 million, or $.18 per diluted share, for the second quarter of 2010.

The Company's adjusted net income for the second quarter of 2011 was $12.9 million, and adjusted diluted earnings per share was $.26, as compared to adjusted net income of $9.4 million and adjusted diluted earnings per share of $.19 for the second quarter of 2010.

David L. Wenner, President and CEO of B&G Foods, stated:

We are very pleased with the continued strong momentum in top and bottom line results, even after factoring in the benefit of the late Easter holiday. We remain confident that we will deliver full-year results within our previously announced guidance of $125.0 to $128.0 million, with third quarter price increases and on-going cost reductions efforts expected to offset the cost increases we will experience in the second half of 2011.

B&G Foods declared a regular quarterly cash dividend of $.21 per share of common stock, payable on October 31, 2011 to shareholders of record as of September 30, 2011. At the closing market price of the common stock on July 19, 2011, the current dividend represents an annualized yield of 4 percent. This is the twenty-eighth consecutive quarterly dividend declared by the Board of Directors since B&G Foods' initial public offering in October 2004.

Honeywell International Inc. (NYSE:HON) invents and manufactures technologies to address tough challenges linked to global macrotrends such as safety, security, and energy.

The company operates in four segments:

  • The Aerospace segment offers products and services are used globally on virtually every commercial and business aircraft operating today as well as for defense and space applications.
  • The Automation and Control Solutions provides environmental controls, life safety, security, sensing, scanning and mobility products, as well as building and process.
  • The Transportation Systems segment is the leading provider of world-class technologies and solutions to automakers, their suppliers and consumers. From fuel-saving and emission-reducing turbochargers to top consumer car care brands such as Fram, Prestone, Autolite and safety-enhancing brake materials.
  • The Specialty Materials segment is a global leader in developing and manufacturing high-purity, high-quality performance chemicals and materials.

Honeywell’s technologies reduce emissions, stop bullets, enable the production of green diesel and green gasoline, increase oil refinery capacity, speed drug discovery and protect medicines.

Honeywell reported second quarter 2011 sales of $9.1 billion, up 15 percent versus $7.9 billion in the second quarter of 2010. Earnings per share were up 40 percent in the second quarter to $1.02 versus $.73 in the second quarter last year. Cash flow from operations was $1,138 million and free cash flow (cash flow from operations less capital expenditures) was $973 million, compared to $1,090 million and $975 million, respectively, in the second quarter last year. Honeywell has received all necessary regulatory approvals for the previously announced sale of (CPG), which is expected to close in the third quarter.

Honeywell Chairman and CEO David Cote Stated:

Honeywell's strong second quarter performance reflects terrific execution and continued momentum in our key end markets, contributing to our upside performance in the first half of 2011.

The sales growth we're seeing reflects our extensive innovation pipeline and increasing presence in high growth regions. We had particularly robust growth in the Aerospace commercial aftermarket, and our short-cycle businesses such as Advanced Materials, ACS Products, and Turbo Technologies continued to perform well.

We expect good organic growth to continue in the second half of 2011.

Favorable global macro trends like safety, security, energy, and globalization combined with our continued investments in new technologies, high growth regions, and our process initiatives will enable the company to continue to grow and outperform now and over the long-term.

The Board of Directors of Honeywell declared a regular quarterly dividend of $0.3325 per share on the company's outstanding common stock. The dividend is payable on September 9, 2011 to share-owners of record at the close of business on August 19, 2011.

Norfolk Southern Corp. (NYSE:NSC) is a leading North American transportation provider. Its Norfolk Southern Railway subsidiary operates approximately 20,000 route miles in 22 states and the District of Columbia, serves every major container port in the eastern United States, and provides efficient connections to other rail carriers. Norfolk Southern operates the most extensive intermodal network in the East and is a major transporter of coal and industrial products.

Norfolk Southern Corporation reported record second-quarter net income of $557 million, 42 percent higher compared with $392 million during the same quarter of 2010. Diluted earnings per share were a record $1.56, up 50 percent compared with $1.04 per diluted share earned in the same period last year. These results reflect favorable, non-recurring income tax-related benefits totaling $63 million, or $.18 per share.

CEO Wick Moorman said:

Norfolk Southern delivered excellent financial results in the second quarter, setting all-time records for net income and earnings per share, as well as second-quarter records for revenues, operating income and operating ratio.

We're seeing opportunities in the global economy, and we are moving forward with initiatives to drive business growth, productivity, and efficiency across our company.

Norfolk Southern Corporation announced that its Board of Directors voted to increase the regular quarterly dividend on the company's common stock by 7.5 percent, or 3 cents per share, from 40 to 43 cents per share. The increased dividend is payable on Sept. 10, to stockholders of record on Aug. 5. Since its inception in 1982, Norfolk Southern has paid dividends on its common stock for 116 consecutive quarters.

Novo Nordisk A/S (NYSE:NVO) is a healthcare company and a world leader in diabetes care. The company has the broadest diabetes product portfolio in the industry, including advanced products within the area of insulin delivery systems. In addition, Novo has a leading position within areas such as haemostasis management, growth hormone therapy and hormone replacement therapy. Novo Nordisk manufactures and markets pharmaceutical products and services that make a significant difference to patients, the medical profession and society.

Novo Nordisk increased operating profit by 24 percent in the first quarter of 2011 with organic sales growth of 15 percent driven by Victoza®, NovoRapid® and Levemir®. Sales increased by 15 percent in Danish kroner and by 11 percent in local currencies. Net profit increased by 23% to DKK 4,073 million. Earnings per share (diluted) increased by 26 percent to DKK 7.06.

Lars Rebien Sørensen, president and CEO, says:

We are encouraged by the continued double digit sales growth driven by Victoza® and modern insulins. It strengthens our confidence in the company’s long term growth prospects despite the near-term impact on sales growth from healthcare reforms in the US and other major markets, which is reflected in the 2011 outlook.

Novo Nordisk still expects sales growth in 2011 of 8-10 percent measured in local currencies. This is based on expectations of continued market penetration for Novo Nordisk’s key products, as well as expectations of continued intense competition, generic competition to oral anti-diabetic products, and an impact from the implementation of healthcare reforms primarily in the US and Europe.

Novo Nordisk is an eye catcher when you start to dig down through the research that is offered on them. I believe that they are a strong company but may also be my wild card in this group. I look forward to hearing everyone’s thoughts on Novo.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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