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The board of directors of Pinnacle Foods Inc. (PF - Snapshot Report) recently announced a 16.7% increase in its quarterly dividend, from 18 cents to 21 cents per common share.

This translates to an annual dividend of 84 cents per share for fiscal 2014, up from 72 cents per share for fiscal 2013. The annual dividend yield is now 3.0%.  

The first increased quarterly dividend will be effective with the fourth quarter payment, which will be made on Jan 10, 2014 to shareholders of record as of Dec 2.

The decision to increase the quarterly dividend follows the company’s early October acquisition of Wish-Bone salad dressings business from consumer products giant Unilever N.V. (UN - Analyst Report) for $575 million.

Wish-Bone is a leading salad dressing brand and holds the number one position in the Italian segment of the category. Wish Bone dressings include a broad range of liquid and dry-mix salad dressing flavors and come under the Wish-Bone and Western brands.

This acquisition is expected to prove beneficial to the company as the brands have attractive margins. The acquisition is expected to immediately enhance Pinnacle’s profits. The deal is also in line with the company’s 'Reinvigorating Iconic Brands' strategy, which involves actively managing iconic food brands with leading market positions.

In the recently concluded third quarter of fiscal 2013, Pinnacle generated $141.7 million of cash from operations. Capital expenditure in the quarter was approximately $62.7 million. Cash and cash equivalents were $110.4 million at the end of Sep 29, 2013 while long-term debt was $1.97 billion at the end of third quarter. Pinnacle Foods carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

Some stocks going strong in the food industry are Omega Protein Corp and The J. M. Smucker Co. (SJM - Analyst Report). While Omega Protein carries a Zacks Rank #1 (Strong Buy), Smucker hold a Zacks Rank #2 (Buy).

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