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Large And Mid-Cap Consumer Staples 08/05/16

For more detailed information - see "Consumer Staples - Picking The Right Stocks And The Right Time" written on 7-12-16

Large and Mid-Cap Consumer Staples 08/05/16

The Q2-16 dividend is used for yield calculations. The second Dividend/EPS ratio has the 2017 EPS projection as the denominator. The change in the target, EPS and target is the percentage change in the consensus 2016 projection that has happened since the beginning of 2016. "Div 1 yr" measures the change in the dividend since Q2-15. "Div 5 yr" measures the average change in the dividend since Q2-11. LANC paid a special dividend of $5.00 in Dec of 2015 - special dividends are not included in my stats. SAFM has paid special dividends of $0.50/share in 2014 and 2015. HSY rejected a buy-out offer on 6-30 - it jumped 17% on the news.

    12-31-15 08-05 Div Current Div/ Div/ Percent Change
Company Price Price /Quarter Yield EPS16 EPS17 Price Pr+Div EPS16 EPS17 Target Div 1yr Div 5yr
Archer-Daniels (NYSE:ADM) 36.68 44.45 0.300 2.70 52% 41% 21.18 22.82 -25.65 -6.07 1.80 7.14 17.50
Campbell (NYSE:CPB) 52.55 61.32 0.312 2.04 42% 40% 16.69 18.47 5.69 7.17 22.81 0.00 1.52
Coke (NYSE:KO) 42.96 43.48 0.350 3.22 73% 70% 1.21 2.84 -7.73 -9.05 5.49 6.06 9.79
ConAgra (NYSE:CAG) 42.16 46.31 0.250 2.16 48% 41% 9.84 11.03 -7.89 0.42 11.33 0.00 1.74
Colgate (NYSE:CL) 66.62 74.58 0.390 2.09 55% 51% 11.95 13.12 -5.05 -4.35 9.49 2.63 6.90
Clorox (NYSE:CLX) 126.83 132.22 0.800 2.42 65% 59% 4.25 5.51 1.64 4.42 5.83 8.11 9.09
DrP/Snapple (DPS) 93.20 96.78 0.530 2.19 49% 45% 3.84 5.55 0.92 1.28 7.10 10.42 13.13
Flowers (NYSE:FLO) 21.49 17.89 0.160 3.58 64% 59% -16.75 -15.26 -8.26 -12.90 -25.01 20.75 16.00
General Mills (NYSE:GIS) 57.66 70.55 0.460 2.61 63% 59% 22.36 24.75 2.10 0.65 19.40 4.55 12.86
Hershey (NYSE:HSY) 89.27 111.65 0.583 2.09 55% 51% 25.07 26.38 -3.18 -4.58 13.26 8.97 13.80
Hormel (NYSE:HRL) 39.54 36.41 0.145 1.59 36% 36% -7.92 -7.18 8.90 3.18 7.16 16.00 25.42
Ingredion (NYSE:INGR) 95.84 135.17 0.450 1.33 26% 24% 41.04 42.45 6.42 6.81 40.82 7.14 36.25
Kellogg (NYSE:K) 72.27 82.71 0.500 2.42 54% 50% 14.45 15.83 -0.54 1.26 18.73 2.04 4.69
Kimberly-Clark (NYSE:KMB) 127.30 129.40 0.920 2.84 60% 56% 1.65 3.82 -1.46 -5.23 8.31 4.55 6.29
Lancaster (NASDAQ:LANC) 115.46 128.80 0.500 1.55 46% 44% 11.55 12.42 3.81 0.89 2.95 8.70 10.30
McCormick (NYSE:MKC) 85.56 100.32 0.430 1.71 46% 42% 17.25 18.76 0.53 -1.43 26.01 7.50 10.71
Pepsi (NYSE:PEP) 99.92 108.66 0.703 2.59 59% 54% 8.75 10.15 -1.86 -4.62 9.45 0.00 7.28
Procter&Gamble (NYSE:PG) 79.41 85.78 0.670 3.12 74% 69% 8.02 9.71 -2.93 -8.02 8.79 1.07 5.52
SandersonFarms (NASDAQ:SAFM) 77.52 88.35 0.220 1.00 13% 13% 13.97 14.54 22.66 3.33 19.31 0.00 5.88
JM Smucker (NYSE:SJM) 123.34 155.23 0.670 1.73 46% 35% 25.86 26.94 -0.17 19.75 16.18 4.69 10.45
Tyson Foods (NYSE:TSN) 53.33 73.64 0.150 0.81 14% 13% 38.08 38.93 21.11 18.18 42.68 50.00 55.00
Average         2.18 50% 45% 12.97 14.36 0.43   12.95 8.11 13.34
The SPY or S&P 500 EFT is 7.02% year to date. - and with unreinvested dividends is 8.06% year to date.
The KXI or Consumer Staples ETF is 6.28% year to date - and with unreinvested dividends is 7.46%.
The RHS or Guggenheim S&P 500 Eq Wt Cons Staple ETF is 9.71% year to date - and with unreinvested dividends is 10.60%.
With the 10 Treasury at 1.57% and the sector average yield on the Q1 dividend at 2.18% - the spread is 61 basis points.
* The change in the dividend is for the last twelve months and not year to date.

The Predictive Power of the Dividend/EPS Ratio on Valuations: Dividend to EPS ratios range from as low as the teens to the 80s - and may look all too random. But this ratio - during most time periods - helps explain the variety of yields and P/E ratios. There is some correlation to YTD price changes as well. This test is done for companies with RRRs under 11%.

The following stocks had Q2-16 Dividend/EPS ratios of less than 45%: CPB, HRL, INGR, SAFM and TSN. Their YTD mean price gain = 20.37% and 4 of the 5 beat the sector mean yearly price gain of 12.97%. Their mean yield = 1.35% and they had an average price/earnings ratio = 18.76. Their mean LTM dividend growth = 14.63% and they had an average CAGR projection of 7.80.

The following had Q2-16 Dividend/EPS ratios of more than 45% - but less than 52%: CAG, DPS, LANC, MKC and SJM. Their YTD mean price gain = 13.67% and 2 of the 5 beat the sector mean yearly price gain. Their mean yield = 1.87% - and they sold at an average price/earnings ratio = 25.46. Their mean LTM dividend growth = 6.26% and they had an average CAGR projection of 7.10.

The following companies had Q2-16 Dividend/EPS ratios of more than 52%: ADM, KO, CL, CLX, FLO, GIS, HSY, K, KMB, PEP and PG. Their YTD mean price gain = 9.28% and 4 of the 11 beat the sector mean yearly price gain. Their mean yield = 2.70% - and they sold at an average price/earnings ratio of 23.07. Their mean LTM dividend growth = 5.99% and they had an average CAGR projection of 5.49.

The relationship between CAGR projections and yields: While yields can be influenced by risk, the influence of dividend growth projections can be seen.
The following had CAGR projections over 8.5%: INGR and TSN. Their current average yield is 1.07%.
The following had CAGR projections under 8.5% but over 6.5%: DPS, FLO, HSY, HRL, MKC, SAFM and SJM. Their current average yield is 1.98%.
The following had CAGR projections under 6.5%: ADM, KO, CL, CLX, GIS, K, LANC, PEP and PG. Their current average yield is 2.52%.

Price/Earnings Ratios 08-05
Most of the 2018 Projections are from NASDAQ.
LANC lacked a 2018 analyst projection. I projected sector average 5% growth so that it would have one.

  EPS / Share % EPS Growth Price/EPS Current Fiscal Year Year
Co. 2014 2015 2016 2017 2018 14-15 15-16 16-17 17-18 2016 2017 2018 High Low Range End
ADM 3.20 2.60 2.29 2.94 2.50 -18.75 -11.92 28.38 -14.97 19.41 15.12 17.78 2.62 2.34 12.23% Dec
CPB 2.53 2.46 2.97 3.14 3.34 -2.77 20.73 5.72 6.37 20.65 19.53 18.36 3.02 2.95 2.36% July
KO 2.04 2.00 1.91 2.01 2.19 -1.96 -4.50 5.24 8.96 22.76 21.63 19.85 2.02 1.91 5.76% Dec
CAG 2.17 2.18 2.10 2.41 2.63 0.46 -3.67 14.76 9.13 22.05 19.22 17.61 2.48 2.34 6.67% May
CL 2.93 2.81 2.82 3.08 3.37 -4.10 0.36 9.22 9.42 26.45 24.21 22.13 2.90 2.77 4.61% Dec
CLX 4.26 4.57 4.95 5.43 5.78 7.28 8.32 9.70 6.45 26.71 24.35 22.88 4.99 4.91 1.62% Dec
DPS 3.65 4.02 4.37 4.76 5.09 10.14 8.71 8.92 6.93 22.15 20.33 19.01 4.47 4.27 4.58% Dec
FLO 0.88 0.92 1.00 1.08 1.20 4.55 8.70 8.00 11.11 17.89 16.56 14.91 1.04 0.95 9.00% Dec
GIS 2.82 2.86 2.92 3.11 3.45 1.42 2.10 6.51 10.93 24.16 22.68 20.45 3.16 2.97 6.51% May
HSY 3.98 4.12 4.26 4.58 4.94 3.52 3.40 7.51 7.86 26.21 24.38 22.60 4.28 4.22 1.41% Dec
HRL 1.11 1.32 1.59 1.62 1.66 18.92 20.45 1.89 2.47 22.90 22.48 21.93 1.61 1.58 1.89% Dec
INGR 5.20 5.88 6.80 7.37 7.98 13.08 15.65 8.38 8.28 19.88 18.34 16.94 6.80 6.55 3.68% Oct
K 3.81 3.53 3.67 4.01 4.30 -7.35 3.97 9.26 7.23 22.54 20.63 19.23 3.78 3.64 3.81% Dec
KMB 5.51 5.76 6.09 6.52 7.09 4.54 5.73 7.06 8.74 21.25 19.85 18.25 6.17 5.95 3.61% Dec
LANC 3.69 3.74 4.36 4.52 4.75 1.36 16.58 3.67 5.09 29.54 28.50 27.12 4.39 4.33 1.38% June
MKC 3.37 3.48 3.76 4.14 4.43 3.26 8.05 10.11 7.00 26.68 24.23 22.65 3.83 3.71 3.19% Nov
PEP 4.63 4.57 4.76 5.16 5.63 -1.30 4.16 8.40 9.11 22.83 21.06 19.30 4.80 4.66 2.94% Dec
PG 4.09 3.76 3.64 3.90 4.20 -8.07 -3.19 7.14 7.69 23.57 21.99 20.42 3.91 3.57 9.34% June
SAFM 10.80 9.52 6.55 6.82 6.96 -11.85 -31.20 4.12 2.05 13.49 12.95 12.69 7.70 5.74 29.92% Oct
SJM 5.64 5.38 5.78 7.70 8.22 -4.61 7.43 33.22 6.75 26.86 20.16 18.88 7.76 7.64 2.08% Apr
TSN 2.94 3.15 4.36 4.68 4.78 7.14 38.41 7.34 2.14 16.89 15.74 15.41 4.43 4.25 4.13% Sep
Average           5.63 9.74 6.13 22.61 20.66 19.45      

Disclosure: I am/we are long CL, GIS, HRL, HSY, INGR, PEP, PG, SJM.