The Parsippany, NJ company, suffered from last fall’s Hurricane Sandy sending Q4 sales volume down by half as some of its biggest markets are in New York and New Jersey. The headquarters itself was without power for nine days but still reported full year 2012 net sales of $633.8 million.
This feisty little company has less than 1,000 employees and is committed to keeping costs down having saved $15 million in 2011-12. Commodity costs are hedged through July. B&G Foods, Inc. (NYSE:BGS) reported Q1 results on April 18 of an increase of 8.8% in net sales at $171.2 million and 17% in net income. EBITDA increased 7% to $45.7 million. The company increased full year EBITDA guidance to $180-184 million.
Since 2009 the company has raised its quarterly dividend from $0.17 per share to $0.29 per share and CEO David Wenner has publicly affirmed the company’s commitment to raise the yield on a regular basis. Corporate governance risk rating is a low (very good) 2. This is just a solid business with a lean workforce, smart acquisition strategy, and shareholder-friendly.
The “Incredible, edible egg” business
Cal-Maine Foods Inc (NASDAQ:CALM) is the largest producer/distributor of shell eggs in the US. This is the best bargain of the three at an 11.68 trailing P/E and a 3.90% yield.
The egg business is always somewhat commodity dependent so that is a risk. CEO Adolphus Baker noted feed costs were up 22% in Q3 and expected to stay high this summer, but the short interest has been decreasing and is now at 7.2%. This company has major insider conviction with its Chairman Emeritus Fred Adams Jr. holding 1,795,399 shares and Baker holding 204,242 shares.
Cal-Maine Foods Inc (NASDAQ:CALM) controls almost 20% of the US fresh egg market in the US. The company reported Q3 and prior nine months results on April 1 of a 19% rise in Q3 net sales compared to the prior year quarter and net income up close to 15%.
Of interest, specialty eggs sales (organic, cage-free, etc.) rose 20% This healthy eating trend has been apparent across numerous food stocks this year. CEO Baker commented on the earnings call, “We believe the performance of specialty eggs will be a key driver of our future growth.”
Fellow Fool Jacob Roche believes the egg business is zero growth but Cal-Maine Foods Inc (NASDAQ:CALM)’s lone analyst expects 17.70% growth next year. I agree with the analyst as consumers will eat more eggs as beef, pork, and lamb prices soar.
With little analyst coverage, high yield, and increasing demand this company may be the chicken that lays the golden egg for your portfolio.
Appraising these gems
I think both B&G Foods, Inc. (NYSE:BGS) and Cal-Maine Foods Inc (NASDAQ:CALM) are solid gold through and through with high yields and solid earnings reports. Until Pinnacle Foods Inc (NYSE:PF) reports for the first time I think it’s just gold plate and not worth your money.
The article Panning for Solid Gold Pantry Stocks originally appeared on Fool.com and is written by AnnaLisa Kraft.
AnnaLisa Kraft has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. AnnaLisa is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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