There is a lot to be liked about The J M Smucker Company (NYSE:SJM) as an income stock, over the past 10 years it has returned an average of 2.00% per year. The company is currently worth US$12.18b, and now yields roughly 2.91%. Let's dig deeper into whether J. M. Smucker should have a place in your portfolio. See our latest analysis for J. M. Smucker
5 checks you should do on a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is their annual yield among the top 25% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has it increased its dividend per share amount over the past?
- Is is able to pay the current rate of dividends from its earnings?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does J. M. Smucker fare?
J. M. Smucker has a trailing twelve-month payout ratio of 26.47%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 38.66%, leading to a dividend yield of around 3.18%. However, EPS is forecasted to fall to $7.29 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
If there is one thing that you want to be reliable in your life, it's dividend stocks and their constant income stream. SJM has increased its DPS from $1.28 to $3.12 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes SJM a true dividend rockstar.Compared to its peers, J. M. Smucker produces a yield of 2.91%, which is high for Food stocks but still below the market's top dividend payers.
Keeping in mind the dividend characteristics above, J. M. Smucker is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three important aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for SJM’s future growth? Take a look at our free research report of analyst consensus for SJM’s outlook.
- Valuation: What is SJM worth today? Even if the stock is a cash cow, it's not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether SJM is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
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Simply Wall St has no position in any of the companies mentioned. This article is general in nature. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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