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Lamb Weston (LW) Rewards Investors With a Dividend Raise
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Lamb Weston Holdings, Inc. (LW - Free Report) is focused on boosting shareholders’ returns. The provider of value-added frozen potato products announced a dividend hike. It will now pay a dividend of 28 cents per share, suggesting a 14% annualized increase to the quarterly dividend. The hiked dividend will be paid out on Mar 3, 2023, to shareholders of record as of Feb 3, 2023.
Lamb Weston currently has a dividend payout of 37%, a dividend yield of 1.1% and a free cash flow yield of 0.8%. With an annual free cash flow return on investment of 3.2%, the increased dividend is likely to be sustainable.
During the first quarter of fiscal 2023, management paid out dividends worth $35.3 million and bought back shares worth $28.4 million, returning $63.7 million to its shareholders. Dividend payouts and share buybacks are investors’ biggest enticements and LW is committed to spurring shareholders’ value.
Image Source: Zacks Investment Research
What Else Should You Know?
Lamb Weston’s sturdy balance sheet and capacity to generate cash keep it well-placed to boost production capacity and fuel long-term growth. For 13 weeks ended Aug 28, 2022, capital expenditures (including IT expenditures) amounted to $121.2 million, as it continues to develop new French fry lines in Idaho and China.
In September 2022, Lamb Weston unveiled expansion plans for french fry processing capacity in Argentina with the construction of a new manufacturing unit in Mar del Plata, Buenos Aires. In July 2021, the company announced the expansion plan for french fry processing capacity at its existing American Falls, ID facility — with an envisioned capacity to manufacture more than 350 million pounds of frozen french fries and other potato products annually. In March 2021, the company unveiled plans to build a new french fry processing facility in Ulanqab, Inner Mongolia, China. Lamb Weston’s efforts to boost offerings and expand capacity enable the company to meet rising demand conditions for snacks and fries.
Apart from the abovementioned capacity-expansion endeavors, the company (in October 2022) signed an agreement to buy the remaining equity interests in its European joint venture with Meijer Frozen Foods B.V. The acquisition is in sync with LW’s capital allocation and acquisition framework. The move will solidify Lamb Weston’s manufacturing footprint to better serve its customers and tap into growth opportunities across Europe, the Middle East and Africa. The company (in Jul 2022) bought an additional 40% stake in Lamb Weston Alimentos Modernos S.A. ("LWAMSA") — which is its joint venture in Argentina — taking its total ownership to 90%.
All said, the hike in dividend is in synch with the company’s prudent capital allocation strategy. This and capacity expansions and acquisitions are likely to keep enhancing LW’s long-term growth and drive its capital allocation decisions.
Shares of the Zacks Rank #3 (Hold) company have gained 33.7% in the past six months compared with the industry’s 13.2% growth.
The Chef's Warehouse, which distributes specialty food products, currently sports a Zacks Rank #1 (Strong Buy). Chef's Warehouse has a trailing four-quarter earnings surprise of 93.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CHEF’s current financial year sales suggests growth of 46.5% from the year-ago reported number, while earnings indicate significant growth.
Conagra Brands, operating as a consumer-packaged goods food company, currently carries a Zacks Rank of 2 (Buy). CAG has a trailing four-quarter earnings surprise of 1.8%, on average.
The Zacks Consensus Estimate for Conagra Brands’ current financial year sales and earnings suggests growth of 5.2% and 3.4%, respectively, from the corresponding year-ago reported figures.
McCormick, a manufacturer, marketer and distributor of spices, seasoning mixes and condiments, currently carries a Zacks Rank #2. MKC delivered an earnings surprise of 6.2% in the last reported quarter.
The Zacks Consensus Estimate for McCormick’s current financial-year sales suggests growth of 1.8%, from the year-ago reported figure.
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Lamb Weston (LW) Rewards Investors With a Dividend Raise
Lamb Weston Holdings, Inc. (LW - Free Report) is focused on boosting shareholders’ returns. The provider of value-added frozen potato products announced a dividend hike. It will now pay a dividend of 28 cents per share, suggesting a 14% annualized increase to the quarterly dividend. The hiked dividend will be paid out on Mar 3, 2023, to shareholders of record as of Feb 3, 2023.
Lamb Weston currently has a dividend payout of 37%, a dividend yield of 1.1% and a free cash flow yield of 0.8%. With an annual free cash flow return on investment of 3.2%, the increased dividend is likely to be sustainable.
During the first quarter of fiscal 2023, management paid out dividends worth $35.3 million and bought back shares worth $28.4 million, returning $63.7 million to its shareholders. Dividend payouts and share buybacks are investors’ biggest enticements and LW is committed to spurring shareholders’ value.
Image Source: Zacks Investment Research
What Else Should You Know?
Lamb Weston’s sturdy balance sheet and capacity to generate cash keep it well-placed to boost production capacity and fuel long-term growth. For 13 weeks ended Aug 28, 2022, capital expenditures (including IT expenditures) amounted to $121.2 million, as it continues to develop new French fry lines in Idaho and China.
In September 2022, Lamb Weston unveiled expansion plans for french fry processing capacity in Argentina with the construction of a new manufacturing unit in Mar del Plata, Buenos Aires. In July 2021, the company announced the expansion plan for french fry processing capacity at its existing American Falls, ID facility — with an envisioned capacity to manufacture more than 350 million pounds of frozen french fries and other potato products annually. In March 2021, the company unveiled plans to build a new french fry processing facility in Ulanqab, Inner Mongolia, China. Lamb Weston’s efforts to boost offerings and expand capacity enable the company to meet rising demand conditions for snacks and fries.
Apart from the abovementioned capacity-expansion endeavors, the company (in October 2022) signed an agreement to buy the remaining equity interests in its European joint venture with Meijer Frozen Foods B.V. The acquisition is in sync with LW’s capital allocation and acquisition framework. The move will solidify Lamb Weston’s manufacturing footprint to better serve its customers and tap into growth opportunities across Europe, the Middle East and Africa. The company (in Jul 2022) bought an additional 40% stake in Lamb Weston Alimentos Modernos S.A. ("LWAMSA") — which is its joint venture in Argentina — taking its total ownership to 90%.
All said, the hike in dividend is in synch with the company’s prudent capital allocation strategy. This and capacity expansions and acquisitions are likely to keep enhancing LW’s long-term growth and drive its capital allocation decisions.
Shares of the Zacks Rank #3 (Hold) company have gained 33.7% in the past six months compared with the industry’s 13.2% growth.
3 Solid Staple Picks
Some top-ranked stocks are The Chef's Warehouse (CHEF - Free Report) , Conagra Brands (CAG - Free Report) and McCormick & Company (MKC - Free Report) .
The Chef's Warehouse, which distributes specialty food products, currently sports a Zacks Rank #1 (Strong Buy). Chef's Warehouse has a trailing four-quarter earnings surprise of 93.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CHEF’s current financial year sales suggests growth of 46.5% from the year-ago reported number, while earnings indicate significant growth.
Conagra Brands, operating as a consumer-packaged goods food company, currently carries a Zacks Rank of 2 (Buy). CAG has a trailing four-quarter earnings surprise of 1.8%, on average.
The Zacks Consensus Estimate for Conagra Brands’ current financial year sales and earnings suggests growth of 5.2% and 3.4%, respectively, from the corresponding year-ago reported figures.
McCormick, a manufacturer, marketer and distributor of spices, seasoning mixes and condiments, currently carries a Zacks Rank #2. MKC delivered an earnings surprise of 6.2% in the last reported quarter.
The Zacks Consensus Estimate for McCormick’s current financial-year sales suggests growth of 1.8%, from the year-ago reported figure.