B&G Foods is probably best avoided by conservative dividend investors. Given the high yield, this might be difficult. However, the dividend’s safety and the company’s debt-heavy and aggressive business approach are significant concerns. Finally, B&G Foods is best suited to more aggressive investors. Even so, considering the enormous stock increase of the previous year, some extra care may be warranted.
Is B&G Foods a good investment?
B&G Foods, Inc. may be undervalued, according to valuation criteria. It has an A Value Score, indicating that value investors should consider it.
Is B&G Foods a dividend aristocrat?
This is why a number of well-known food blue chips make the list of dividend aristocrats and dividend kings, respectively, with 25+ and 50+ years of consecutive annual dividend growth. B&G Foods (BGS) has one of the highest dividend yields among food stocks, at 4.6 percent.
Is Tyson Foods a good dividend stock?
We prefer a payout that is consistent over time, therefore determining if it is sustainable is critical. Tyson Foods’ dividend was, however, amply supported by both cash flow and earnings previous to this declaration. As a result, a significant amount of its profits were re-invested in the company.
In the coming year, profits per share are expected to increase by 2.2 percent. We anticipate the payout ratio will be 33 percent if the dividend continues on its current path, which is within the range that makes us confident in the dividend’s long-term viability.
Tyson Foods Has A Solid Track Record
Even after a long history of dividend payments, the company’s payouts have remained impressively consistent. The dividend has increased from US$0.16 in 2011 to US$1.78 in the most recent payout. Over that time, this translates to a compound annual growth rate (CAGR) of around 27% every year. We can observe that payments have maintained a steady upward trend without faltering, which gives us some confidence that future payments will be reliable as well.
Tyson Foods Could Grow Its Dividend
Based on the company’s dividend history, some investors will be salivating at the prospect of purchasing some of the company’s stock. Tyson Foods has expanded earnings per share at a rate of 9.2 percent each year for the past five years, which is encouraging. With a healthy level of growth and a low payout ratio, we believe Tyson Foods’ dividend payments will continue to expand in the future.
Tyson Foods Looks Like A Great Dividend Stock
Overall, we believe that this is an excellent income investment, and that maintaining the dividend this year was a prudent decision. The company’s earnings comfortably support payouts, and it generates a lot of cash. Overall, this ticks a lot of our boxes when it comes to picking an income stock.
Investors prefer companies that have a consistent, steady dividend policy over those that have an inconsistent one.
Apart from dividend payments, investors must evaluate a variety of other variables when evaluating a company. For example, we’ve identified two red flags for Tyson Foods that investors should be aware of. Are you looking for more high-yielding dividend stocks to invest in? Take a look at our carefully curated selection of high-yielding dividend payers.
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How much debt does B&G Foods have?
The historical figures are available by clicking the chart below, but it reveals that B&G Foods had US$2.33 billion in debt as of April 2021, up from US$1.98 billion a year earlier. It also doesn’t have much cash, thus its net debt is similar.
A Look At B&G Foods’ Liabilities
B&G Foods has obligations of US$207.6 million due within the next 12 months and liabilities of US$2.69 billion due after that, according to the most recent balance sheet data. It has US$43.1 million in cash and US$150.7 million in receivables due in the next 12 months to offset this. As a result, its liabilities exceed its cash and short-term receivables by US$2.71 billion.
Given that this deficit exceeds the company’s market capitalization of US$2.14 billion, we believe that shareholders should closely monitor B&G Foods’ debt levels, much like a parent watching their child learn to ride a bike for the first time.
If the company were compelled to pay down its liabilities by raising capital at the current share price, significantly heavy dilution would be required.
We utilize two major ratios to figure out how much debt we have in relation to our profits. The first is net debt divided by earnings before interest, taxes, depreciation, and amortization (EBITDA), while the second is how many times EBIT covers interest expense (or its interest cover, for short). This method has the advantage of accounting for both the total amount of debt (with net debt to EBITDA) and the actual interest expenses connected with that debt (with its interest cover ratio).
B&G Foods has a debt-to-EBITDA ratio of 6.2, indicating a significant debt load.
The good news is that it has a reassuring interest cover of 2.9 times, indicating that it will be able to meet its commitments responsibly.
On a brighter note, we should mention that B&G Foods increased its EBIT by 22% in the previous year.
If it can keep improving at this rate, its debt will start to melt away like glaciers in a warming planet.
The balance sheet is the obvious place to start when looking at debt levels.
But, more than anything else, future revenues will decide B&G Foods’ capacity to maintain a strong balance sheet in the future.
So, if you’re curious about what the experts say, this free study on analyst profit estimates might be of interest.
But there’s one more factor to consider: a corporation can’t pay its debts with phantom profits; it requires genuine cash. As a result, we must determine whether that EBIT generates corresponding free cash flow. B&G Foods’ free cash flow amounted to 49 percent of its EBIT in the last three years, which is lower than we expected. When it comes to debt repayment, that’s not ideal.
Our View
We’re not very excited about B&G Foods’ attempt to manage its debt, based on its EBITDA. On the plus side, its EBIT growth rate is encouraging and gives us reason to be positive. We believe that debt makes B&G Foods stock hazardous when looking at the balance sheet and considering all of these aspects. That’s not inherently a negative thing, but we’d prefer to have less leverage in general. The balance sheet, without a question, teaches us the most about debt. However, every organization can, in the end, manage risks that lie outside of the balance sheet. Be warned that in our investment research, B&G Foods has two danger indicators, one of which is major…
At the end of the day, it’s typically preferable to concentrate on organizations with no net debt. You can find a unique list of such businesses on our website (all with a track record of profit growth). It’s completely free.
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Where are B&G Foods located?
B&G Foods is a branded food holding business based in the United States. It began selling pickles, relish, and condiments in 1889. The Bloch and Guggenheimer families were pickle dealers in Manhattan, hence the B&G moniker. It employs roughly 2,500 people and is based in Parsippany, New Jersey. B&G has been publicly listed for more than a decade, and as part of its expansion strategy, it has been acquiring orphaned trademarks. B&G sells frozen and shelf-stable foods at the moment.
Regina wine vinegar, Brer Rabbit molasses, Wright’s liquid smoke, and Vermont Maid pancake syrup were among the brands bought by B&G from Nabisco. Trappey’s Fine Foods (producer of Louisiana’s Trappey’s spicy sauce and pickled peppers) is also owned by the corporation. Maple Grove Farms of Vermont makes maple syrup and maple sweets, among other products. B&G bought B&M baked beans, Ac’cent flavor enhancer, Las Palmas Mexican sauces, Joan of Arc canned ingredient beans, and Underwood meat spreads from Pillsbury Company.
How often does Capital Southwest pay dividends?
Capital Southwest pays dividends on a regular basis. Capital Southwest distributes quarterly dividends to its shareholders (NASDAQ:CSWC).
Is Tyson Foods a good stock to buy?
According to Zacks’ proprietary analysis, Tyson Foods, Inc. is now rated a Zacks Rank 1 stock, and we predict the TSN stock will outperform the market over the next several months. Tyson Foods, Inc. also has a VGM Score of A. (this is a weighted average of the individual Style Scores which allow you to focus on the stocks that best fit your personal trading style). Tyson Foods, Inc. may be undervalued, according to valuation criteria. It has an A Value Score, indicating that value investors should consider it. TSN’s financial health and development prospects show that it has the ability to outperform the market. It has a B Growth Score right now. With a Momentum Score of B, recent price fluctuations and earnings estimate revisions indicate that this is a good stock for momentum investors.
Is Tyson food stock a buy?
Tyson Foods is rated as a Buy by the majority of investors. The average rating score for the company is 2.50, based on four buy ratings, four hold recommendations, and no sell ratings.
Who owns Green Giant foods?
Green Giant was purchased by Pillsbury in 1979. Green Giant was acquired by General Mills in 2001 when it bought Pillsbury. General Mills operates the Green Giant business in Europe and a few other export markets under license from B&G Foods as of November 2015.
