All three food companies offer good yields
At the current trading price, General Mills offers its shareholders quite a decent dividend yield of 3%. The dividend yield of Mondelez is much lower, at only 1.7%. Pinnacle Foods has just announced its quarterly dividend of around $0.18 per share. Thus, the dividend seems to be quite good too, at 2.80%. Pinnacle Foods is the cheapest valued food company. The market values the company at 10.72 times EV/EBITDA. Among the three, Mondelez has the highest EV multiple at more than 14, while the EV multiple of General Mills is in between at 11.36.
My Foolish take
With a leading position in the U.S. food market, a good dividend yield, and the lowest EV multiple, Pinnacle Foods seems to be a good stock for long-term income investors. If Pinnacle Foods Inc (NYSE:PF) could reduce its debt level, it could be much more flexible with its financial position. Moreover, it could substantially reduce its debt expense, which has been around $190 million in the past twelve months. Consequently, the bottom line will grow, bringing more return for shareholders.
The article An Enticing Food Company for Your Portfolio originally appeared on Fool.com and is written by Anh HOANG.
Anh HOANG has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Anh 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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