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Why SJM Is a Top Pick for Income-Focused Investors in 2025
ZACKS· 2025-07-17 14:56
Key Takeaways SJM raised its quarterly dividend by 2% to $1.10 per share, marking 24 consecutive years of growth. SJM boasts a 4.1% yield and 43% payout ratio, supporting dividend sustainability. SJM plans to cut $500M in debt annually, targeting a 3.0x net debt/EBITDA ratio by fiscal 2027.The J.M. Smucker Co. (SJM) has once again rewarded its shareholders by increasing its quarterly dividend from $1.08 to $1.10 per share — a 2% hike. This marks the company’s 24th consecutive fiscal year of dividend growt ...
X @Bloomberg
Bloomberg· 2025-07-15 19:10
Corporate Strategy - Kraft Heinz is considering spinning off its slower-growing brands [1] Investment Analysis - Bond investors are positioning for potential winners and losers resulting from the spin-off [1]
SJM vs. POST: Which Food Stock Deserves a Spot in Your Cart?
ZACKS· 2025-07-15 14:06
Core Insights - Food companies are facing increased price sensitivity, uneven volume trends, and challenges to brand loyalty as consumers seek value [1] - Companies that can protect margins, manage input costs, and adapt to changing consumption habits are likely to succeed [1] The J. M. Smucker Company (SJM) - SJM is undergoing a strategic transformation, focusing on portfolio optimization through acquisitions and divestitures, including the acquisition of Hostess Brands in late 2023 [3][4] - The Hostess acquisition enhances SJM's position in the snacking category, with a 3% year-over-year sales increase in its International and Away From Home segment [4] - Despite growth, SJM's adjusted gross profit declined by 9% year-over-year in the fiscal fourth quarter due to higher input costs and weaker volume [5] - SJM is increasing marketing investments for key brands, leading to a 3% rise in selling, distribution, and administrative expenses [6] Post Holdings, Inc. (POST) - POST is strengthening its position through consistent performance, with Foodservice segment net sales rising 9.6% year-over-year to $607.9 million in Q2 fiscal 2025 [7] - Strategic pricing actions have allowed POST to protect margins amid inflation, offsetting input cost inflation and volume softness [8][9] - POST's recent acquisitions, including 8th Avenue Food & Provisions and Potato Products of Idaho, support a diversified growth strategy [10] - POST benefits from a well-diversified portfolio and disciplined execution, positioning it as a resilient player in the food industry [11] Financial Comparisons - The Zacks Consensus Estimate for POST's fiscal 2025 EPS is $6.63, while SJM's estimate has decreased by 4% to $9.28 [12] - POST trades at a forward P/E of 14.54x compared to SJM's 11.1x, reflecting stronger earnings momentum for POST [13] - In the past three months, POST's stock has declined by 6.9%, outperforming SJM's 8.8% drop, justifying the valuation gap [13] Conclusion - SJM is in a rebuilding phase, focusing on long-term growth through portfolio reshaping, while POST is growing through strategic pricing and disciplined execution [16] - In the current inflation-sensitive market, POST is viewed as the safer and smarter investment choice [16]
