Recent acquisitions support their dividends

Article Excerpt

These two foodmakers recently acquired smaller firms with premium brands. While expanding by acquisition adds risk, the new operations should support their current dividend payouts. CAMPBELL SOUP CO. $43 is a buy. The company (New York symbol CPB; Conservative-Growth Payer Portfolio, Consumer sector; Shares outstanding: 298.1 million; Market cap: $12.8 billion; Dividend yield: 3.4%; Dividend Sustainability Rating: Above Average; www.campbellsoupcompany.com) sold most of its international and refrigerated-foods businesses in 2018. That let it focus on canned soups, pasta and V8 vegetable juices. Campbell also kept its snack food operations. They were significantly expanded in March 2018 when the company paid $6.1 billion for snack-foods maker Snyder’s-Lance. Campbell last raised your quarterly dividend with the February 2021 payment. Investors now receive $0.37 a share, up 5.7% from $0.35. The annual rate of $1.48 yields a solid 3.4%. The company recently completed its $2.7 billion acquisition of Sovos Brands Inc. (Nasdaq symbol SOVO), the maker of Rao’s pasta sauces. The new operations will add $1 billion to its annual…