The J.M. Smucker Company (SJM) is a “Dividend Contender”
that has increased its dividend for 20 consecutive years. After being
overvalued for most of fiscal year 2017 (fiscal year ends in April) the company
has since fallen into attractive valuation territory. As a result, the company
is available at a low P/E ratio relative to historical norms and offers a
current dividend yield of 2.9%. Moreover, the company has consistently
increased its dividend in line with its historical 10% earnings growth.
“The J. M. Smucker Company engages in manufacturing and
marketing branded food and beverage products on a worldwide basis.
The majority of the company’s sales are in the U.S. Its
operations outside the U.S. are principally in Canada, although products are
exported to other countries as well. The company’s branded food and beverage
products include a portfolio of primary brands that are sold to consumers
through retail outlets in North America.
The company has three segments: U.S. Retail Coffee, U.S.
Retail Consumer Foods, and U.S. Retail Pet Foods. The U.S. retail market
segments represent a major portion of the company’s strategic focus – the sale
of branded food and beverage products with primary positions to consumers
through retail outlets in North America. Within the company’s segment results,
International and Foodservice represents a combination of the strategic business
areas not included in the U.S. retail market segments.
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