We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
B&G Foods Fundamentals Solid: Should You Add the Stock?
Read MoreHide Full Article
The North American food industry has been witnessing sluggish growth and slowdown in consumption over the last few quarters due to a soft consumer spending environment. Despite the moderate improvement in economic growth, consumers are increasing their spending only modestly, as the surge in job growth is yet to translate into significantly higher wages.
Nonetheless, one should not ideally overlook the sector as good food choices are healthy for ones portfolio.
B&G Foods, Inc. (BGS - Free Report) , a Zacks Rank #1 (Strong Buy) stock, is one of the food stocks that is a good investment choice.
Headquartered in Parsippany, NJ, B&G Foods is involved in the manufacturing, selling and distributing of shelf-stable along with frozen food and household products in the U.S, Canada, and Puerto Rico.
What Makes the Stock Attractive?
Share Price Movement: B&G Foods’ shares gained around 21.6% year to date, compared to 10% growth of the Zacks categorized Food-Miscellaneous industry. Although the industry is going through a rough phase, this food stock has been riding high since Apr 2016.
Impressive Dividend Yield: B&G Foods’ dividend yield is way more attractive than its peers. The $1.86 dividend on a $43.50 share price now yields just under 4.28%, compared with the industry average of 0.00%. Its five-year average dividend yield is 4.09%.
Superior ROE: B&G Foods’ trailing twelve-month Return on Equity (ROE) ratio is 21.8% compared with the industry average of 19.65%. This indicates that the company reinvests more efficiently as compared to the industry.
Focus on Inorganic Growth: The company actively pursues acquisitions which are appreciated by investors from time to time. Since the IPO pricing of $13 a share in 2007, the company has touched around $52, indicating an increase of 4 times.
In Dec 2016, B&G Foods took over Victoria Fine Foods Holding Company and Victoria Fine Foods, LLC from Huron Capital Partners and other sellers for roughly $70 million in cash. With the addition of Victoria brands, the company has broadened its sauce line of offerings. This follows the acquisition of the spices and seasonings business of ACH Food Companies, Inc. in Nov 2016, bolstering its presence in the shelf-stable product market.
Acquisitions have been a key growth driver for B&G Foods. Total revenue of $318.2 million in the third quarter of 2016 was driven by recent acquisitions. Revenues in the third quarter increased 49.2% year over year on strong sales at Green Giant, which was taken over in Nov 2015.
Earnings Estimate Revisions: The present EPS scenario is quite favorable for B&G Foods.
Over the past 60 days, three estimates for earnings moved north for the to-be-reported quarter as well as next year. Further, two estimates were revised higher for the next quarter as well as current full year. These revisions have helped raise the consensus estimate for BGS Foods to $2.18 per share for the full year by 0.5% and $2.43 for the next year by 5.2%.
Other Key Picks
Investors can consider other favorably ranked stocks in the same space that include Tate & Lyle PLC (TATYY - Free Report) , J&J Snack Foods Corp. (JJSF - Free Report) and Lancaster Colony Corp. (LANC - Free Report) .
J&J Snack Foods is expected to witness 5.8% EPS growth this year.
Lancaster Colony has an impressive earnings surprise history, beating the Zacks Consensus Estimate in three of the last four quarters, with an average positive surprise of 8.59%. Both the J&J Snack Foods and Lancaster Colony hold a Zacks Rank #2 (Buy).
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
B&G Foods Fundamentals Solid: Should You Add the Stock?
The North American food industry has been witnessing sluggish growth and slowdown in consumption over the last few quarters due to a soft consumer spending environment. Despite the moderate improvement in economic growth, consumers are increasing their spending only modestly, as the surge in job growth is yet to translate into significantly higher wages.
Nonetheless, one should not ideally overlook the sector as good food choices are healthy for ones portfolio.
B&G Foods, Inc. (BGS - Free Report) , a Zacks Rank #1 (Strong Buy) stock, is one of the food stocks that is a good investment choice.
Headquartered in Parsippany, NJ, B&G Foods is involved in the manufacturing, selling and distributing of shelf-stable along with frozen food and household products in the U.S, Canada, and Puerto Rico.
What Makes the Stock Attractive?
Share Price Movement: B&G Foods’ shares gained around 21.6% year to date, compared to 10% growth of the Zacks categorized Food-Miscellaneous industry. Although the industry is going through a rough phase, this food stock has been riding high since Apr 2016.
Impressive Dividend Yield: B&G Foods’ dividend yield is way more attractive than its peers. The $1.86 dividend on a $43.50 share price now yields just under 4.28%, compared with the industry average of 0.00%. Its five-year average dividend yield is 4.09%.
Superior ROE: B&G Foods’ trailing twelve-month Return on Equity (ROE) ratio is 21.8% compared with the industry average of 19.65%. This indicates that the company reinvests more efficiently as compared to the industry.
Focus on Inorganic Growth: The company actively pursues acquisitions which are appreciated by investors from time to time. Since the IPO pricing of $13 a share in 2007, the company has touched around $52, indicating an increase of 4 times.
In Dec 2016, B&G Foods took over Victoria Fine Foods Holding Company and Victoria Fine Foods, LLC from Huron Capital Partners and other sellers for roughly $70 million in cash. With the addition of Victoria brands, the company has broadened its sauce line of offerings. This follows the acquisition of the spices and seasonings business of ACH Food Companies, Inc. in Nov 2016, bolstering its presence in the shelf-stable product market.
Acquisitions have been a key growth driver for B&G Foods. Total revenue of $318.2 million in the third quarter of 2016 was driven by recent acquisitions. Revenues in the third quarter increased 49.2% year over year on strong sales at Green Giant, which was taken over in Nov 2015.
Earnings Estimate Revisions: The present EPS scenario is quite favorable for B&G Foods.
Over the past 60 days, three estimates for earnings moved north for the to-be-reported quarter as well as next year. Further, two estimates were revised higher for the next quarter as well as current full year. These revisions have helped raise the consensus estimate for BGS Foods to $2.18 per share for the full year by 0.5% and $2.43 for the next year by 5.2%.
Other Key Picks
Investors can consider other favorably ranked stocks in the same space that include Tate & Lyle PLC (TATYY - Free Report) , J&J Snack Foods Corp. (JJSF - Free Report) and Lancaster Colony Corp. (LANC - Free Report) .
Tate & Lyle, also a Zacks Rank #1 stock, is expected to see EPS growth of 12% in the current year. You can see the complete list of today’s Zacks #1 Rank stocks here.
J&J Snack Foods is expected to witness 5.8% EPS growth this year.
Lancaster Colony has an impressive earnings surprise history, beating the Zacks Consensus Estimate in three of the last four quarters, with an average positive surprise of 8.59%. Both the J&J Snack Foods and Lancaster Colony hold a Zacks Rank #2 (Buy).
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>