New dividend aristocrat The J.M. Smucker Company (SJM)

J.M. Smucker (SJM) is a leading American food company that produces and markets a wide range of food products, including coffee, pet food, peanut butter, fruit spreads, and baking products. The company was founded in 1897 and has since become a household name in the United States, known for its high-quality and trusted brands.

One of the key strengths of J.M. Smucker is its strong portfolio of brands, which includes household names such as Folgers, Jif, Smucker’s, and Meow Mix. These brands have a long history of success and are trusted by consumers for their quality and taste. J.M. Smucker invests heavily in marketing and innovation to ensure that its brands remain relevant and appealing to consumers.

Financial position

J.M. Smucker’s financial performance has been impressive over the years, with steady revenue growth and profitability. The company’s revenue for the fiscal year 2021 was $7.9 billion, up 2% from the previous year. Net income for the same period was $759 million, an increase of 19% from the previous year.

J.M. Smucker is also a dividend aristocrat, having increased its dividend payout for 26 consecutive years. The company’s current dividend yield is 3.2%, which is above the industry average of 1.5%. J.M. Smucker’s dividend payout ratio is also reasonable at 53.9%, which indicates that the company has the financial flexibility to continue paying and increasing its dividend over the years.

J.M. Smucker has a strong balance sheet, with a debt-to-equity ratio of 0.59 and a current ratio of 1.85. This indicates that the company has a healthy financial position and is able to meet its short-term obligations. J.M. Smucker also has a solid cash position, with $1.2 billion in cash and equivalents as of the end of fiscal year 2021.

In terms of valuation, J.M. Smucker’s price-to-earnings (P/E) ratio of 13.7 is below the industry average of 25.4. This indicates that the company is currently undervalued compared to its peers, which may present an opportunity for investors.

Final Thoughts

In conclusion, J.M. Smucker is a solid investment choice for investors looking for exposure to the food industry. The company’s strong portfolio of brands, financial strength, and reliable dividend payments make it a reliable choice for long-term investors. Furthermore, J.M. Smucker’s reasonable valuation may present an opportunity for investors to purchase shares at an attractive price. It’s always important to do your own research and consult with a financial advisor before making any investment decisions.