We recently published a list of the 20 Best Dividend Growth Stocks with High Yields. In this article, we are going to take a look at where The J. M. Smucker Company (NYSE:SJM) stands against other best dividend growth stocks.
Dividend-paying stocks have been gaining popularity among investors due to their long-term advantages. According to Jeremy Zirin, who leads the US equity team for private clients at UBS Asset Management, companies with a consistent track record of increasing dividends are a smart choice for investors seeking a balanced approach in the current market environment. When markets dipped in April after President Donald Trump announced new tariff policies, investors gravitated toward high-yield dividend stocks. However, as trade tensions began to ease and negotiations progressed, markets recovered. Stocks surged particularly after the US and China agreed to temporarily reduce tariffs. He made the following comment about dividend stocks:
“The higher-dividend-yielding strategies tend to do better when markets are in real turmoil and declining, but if there’s more chop, more volatility and potentially upside … you don’t want to be overly defensive.”
Historically, companies that consistently increase their dividends have tended to be less volatile and often delivered stronger returns than the broader market, including benchmarks like the S&P Equal Weight Index. According to a report by Guggenheim, from May 2005 through December 2024, firms that either initiated or raised their dividends generated an average annual return of 10.5%. In contrast, companies that cut or suspended their payouts posted just 5.5% annually. The overall market returned 10.4% during this timeframe, slightly behind the dividend growers. The report also highlighted that dividend growth strategies have historically performed well in both rising and falling markets, making them an attractive option for investors focused on long-term gains and downside protection.
According to a report by S&P Global, the growth of global dividend payments had been slowing since the post-COVID recovery, but that trend reversed last year. In 2024, the growth rate unexpectedly accelerated to 8%, with shareholders receiving approximately $180 billion more than the previous year. This increase came as a surprise given the persistent geopolitical and economic challenges. The report also highlighted that several sectors and regions saw record dividend initiations, including the US technology, media, and telecom (TMT) sector, banks in Italy and Spain, Japan’s automotive industry, and a general rise in payouts from Mainland China. Even with extreme price fluctuations, dividend payments from the oil and gas sector remained strong. Looking ahead, the report suggested that this high level of dividends is likely to hold steady, with global payouts expected to remain at $2.3 trillion in 2025.
With growing investor appetite for dividend-paying stocks, many companies have responded by gradually increasing their dividend payouts. A report by Janus Henderson revealed that global dividend payments reached a record $1.75 trillion in 2024, reflecting a 6.6% rise on an underlying basis. The overall growth rate came in at 5.2%, slightly held back by a drop in special one-time dividends and the effect of a stronger U.S. dollar. Out of the 49 countries covered in the report, 17—including major economies such as the US, Canada, France, Japan, and China—posted record-high dividend levels. In total, 88% of companies either raised or held their dividends steady over the year.
A wholesaler distributing peanut butter, fruit spreads and specialty spreads to a retailer.
Our Methodology
For this list, we screened for dividend stocks with yields higher than 3% as of May 13. From this group, we further refined our selection criteria by identifying stocks with a dividend growth streak of 10 years or more. The stocks are ranked in ascending order of their dividend yields.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
The J. M. Smucker Company (NYSE:SJM)
Dividend Yield as of May 13: 3.87%
The J. M. Smucker Company (NYSE:SJM) is an American food company, headquartered in Ohio. The company manufactures a wide range of food and beverage products. In its recent quarterly update, the company emphasized the importance of its procurement strategies amid rising commodity prices, especially green coffee, to help safeguard margins. The company also pointed to one-time factors, such as trademark impairments and supply chain disruptions, that negatively affected its overall operating performance and contributed to mixed results.
For fiscal Q3 2025, The J. M. Smucker Company (NYSE:SJM) reported $2.2 billion in revenue, a 2% year-over-year decline. It posted a net loss of $6.22 per diluted share, mainly due to noncash impairment charges tied to its Sweet Baked Snacks business. However, on an adjusted basis, earnings per share rose 5% to $2.61. Gross profit increased by $55 million, or 7%, thanks to improved pricing, cost efficiencies, and benefits from the Hostess Brands acquisition, though lower volumes and recent divestitures partially offset these gains.
Though The J. M. Smucker Company (NYSE:SJM) is a strong dividend company, its cash position took a hit this quarter. Free cash flow dropped significantly to $151.3 million, down 39.3% from the prior year, due to timing differences in tax payments and increased working capital needs. Operating cash flow also declined, highlighting the need for more disciplined cash management going forward. Despite these challenges, SJM remains appealing to income-focused investors, supported by a 23-year streak of dividend growth. Currently, it offers a quarterly dividend of $1.08 per share and has a dividend yield of 3.87%, as of May 13.
Overall, SJM ranks 15th on our list of the best dividend growth stocks with high yields. While we acknowledge the potential of SJM as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than SJM but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.
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Disclosure: None. This article is originally published at Insider Monkey.
