The J M Smucker Co (NYSE:SJM) engages in manufacturing and marketing branded food products primarily in the United States, Canada, and internationally. The company is a member of the dividend achievers index, and has boosted distributions for nineteen years in a row.
The company’s last dividend increase was in July 2016 when the Board of Directors approved an 11.90% increase to 75 cents/share. The company’s largest competitors include Conagra Brands Inc (NYSE:CAG), Kraft Foods Group Inc (NASDAQ:KRFT) and Hershey Co (NYSE:HSY).
Over the past decade this dividend growth stock has delivered an annualized total return of 14.10% to its shareholders.
The company has managed to deliver an 8.90% average increase in annual EPS since 2006. Analysts expect J. M. Smucker to earn $7.69 per share in 2017 and $8.09 per share in 2018. In comparison, the company earned $5.76/share in 2016.
Future increases in earnings would likely be generated by acquisitions and some by cost restructuring. The company has a track record of making acquisitions that work. The company has taken the initiative to improve operations and production efficiencies, and improving its cost base. The demand for products in Smucker’s end markets is stable, and would grow slowly over time.
The demand for coffee, peanut butter, jelly, and cooking oils is pretty stable, and results in repeatable sales to consumers, once you establish that relationship.
International sales account for less than a quarter of revenues, which is an opportunity for growth. Product innovation could also provide opportunities for growth.