McCormick & Company, Incorporated, a specialty food company, engages in the manufacture, marketing, and distribution of flavor products and other specialty food products to the food industry worldwide. It operates in two segments, Consumer and Industrial. The company, which has raised dividends for 23 consecutive years, is a member of the Mergent’s dividend achievers index. Back in November McCormick & Company increased its quarterly dividend by 8.30% to 26 cents per share
Since 1999 this dividend growth stock has delivered an average total return of 10.70% annually.
The company has managed to deliver a 11.70% average annual increase in its EPS between 1999 and 2008. Analysts expect McCormick & Company to earn $2.33 share next year, followed by an increase to $2.51/share in the year after that. The company is in the middle of a cost restructuring program, where annual savings have reached almost 56 million in 2008. In addition to that the company is trying to grow through acquisitions, which add to its diverse portfolio of consumer and industrial brands.
Although the Return on Equity is high at 23.90%, it is below its highs in the early 2000s. Rather than focus on absolute values for this indicator, I generally want to see at least a stable return on equity over time.
The annual dividend payment has increased by an average of 11.10% annually since 1999, which is commensurate with the growth in EPS.
An 11 % growth in dividends translates into the dividend payment doubling every six and a half years. If we look at historical data, going as far back as 1990, McCormick & Company has actually managed to double its dividend payment every six years on average.
The dividend payout ratio has consistently remained below 50% over the past decade. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.
Currently the McCormick & Company is attractively valued at 17.8 times earnings, yields 2.90% and has an adequately covered distribution payment. I would look to enter McCormick & Company (MKC) on dips below $34.
Full Disclosure: None
- Eight stocks with positive dividend momentum
- What are your dividend investing goals?
- Where are the original Dividend Aristocrats now?
- Estimating future Dividend Growth
ConocoPhillips (COP) just announced that it is cutting its quarterly dividend from 74 to 25 cents/share. This comes after management consta...
It is nice to have a diversified income stream . While many seem to look for a focused method, I look for a diversified method of generating...
In the first two weeks of this year, the stock market has been down a lot . For someone who invests for dividends, I am relatively agnostic ...
Today marks the eight year of Dividend Growth Investor website . I wanted to thank all of you who follow my humble site. I didn’t really exp...
Warren Buffett is one of the best investors in the world . He is skilled in the art of capital allocation. I have always suspected that the ...
Most of my money is invested in a portfolio of companies that have a track record of regular dividend increases . I have found that dividen...
Most readers know me as a person that buys a stock in a company I like, and then I keep building a position as long as valuation and allocat...
To be honest, I didn’t do much investing wise in January. Of course, I didn't panic and I stayed the course . Per my earlier article I s...
"You pay a dear price for cheery consensus. " Warren Buffett I like to buy shares when prices go down. This ensures that my c...
The first three weeks of this month have been terrible for investors worldwide . It could be painful to watch your portfolio value decrease ...