The J. M. Smucker Co. : SJM-US: Dividend Analysis : November 10th, 2017 (record date) : By the numbers : November 13, 2017

Our analysis is based on comparing The J. M. Smucker Co. with the following peers – Hain Celestial Group, Inc., TreeHouse Foods, Inc., General Mills, Inc., Pinnacle Foods, Inc., B&G Foods, Inc., Conagra Brands, Inc., Kraft Heinz Company, Coffee Holding Co., Inc. and Farmer Bros. Co. (HAIN-US, THS-US, GIS-US, PF-US, BGS-US, CAG-US, KHC-US, JVA-US and FARM-US).

The J. M. Smucker Co.’s dividend yield is 2.94 percent and its dividend payout is 63.66 percent. This compares to a peer average dividend yield of 2.99 percent and a payout level of 72.36 percent. This relatively lagging dividend performance could spur some dividend action going forward – except the company’s current dividend quality score of 50 out of a possible score of 100 is only about average.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to July 31, 2017), SJM-US paid a high quality dividend, which represents a yield of 2.91% at the current price.
  • Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 4 were high quality and 1 was low quality.
  • The ending cash balance is less than the last full year dividend payment and cannot be relied on to cushion any significant reduction of cash flows in the future.
Dividend Quality Score Vs Dividend Yield

Quadrant label definitions. Hover to know more

High Score;High Yield, High Score;Low Yield, Low Score;Low Yield, Low Score;High Yield

Dividend Coverage

Over the last twelve months (prior to July 31, 2017), SJM-US paid a high quality dividend.

The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 3.25x), investing cash flow (coverage of -0.48x), issuance cash flow (coverage of -1.58x) and twelve-month prior cash (coverage of 0.32x), for a total dividend coverage of 1.53x.

SJM-US’s issuance cash flow includes outflows from net debt repayment (coverage of -0.35x) and net share buybacks (coverage of -1.23x). Thus, the total coverage including share buybacks is 2.76x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.

Dividend Coverage by Cash Flow (TTM)

These coverage ratio factors imply that the firm’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high dividend quality.

Dividend History

Item 2013-04-30 2014-04-30 2015-04-30 2016-04-30 2017-04-30 Latest
Dividend Yield (%) 2.03 2.42 1.83 2.14 2.36 2.94
Dividend Payout (%) 41.6 42.8 76.88 46.53 58.82 63.66

A complete list of metrics and analysis is available on the company page.

Company Profile

The J. M. Smucker Co. engages in the production and market of fruit spreads, peanut butter and other food products. The company operates through the following segments: U.S. Retail Coffee; U.S. Retail Consumer Foods; U.S. Retail Pet Foods; International and Foodservice. The U. S. Retail Coffee segment includes the domestic sales of Folgers, Dunkin Donuts, and Café Bustelo branded coffee. The U.S. Retail Consumer Foods segment sells Jif, Smucker’s, Crisco, and Pillsbury branded products. The U.S. Retail Pet Foods comprises of Meow Mix, Milk-Bone, Natural Balance, Kibbles’n Bits, 9Lives, Pup-Peroni, and Nature’s Recipe branded products. The International and Foodservice segment covers the products distributed domestically and in foreign countries. The company was founded by Jerome Monroe Smucker in 1897 and is headquartered in Orrville, OH.


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