Kellogg Company Serves 3.5% Dividend Yield to Shareholders (K)
By: Ned Piplovic,
Featured Image Source: http://www.kelloggcompany.com/en_US/brandportfolio.html
The Kellogg Company (NYSE:K) has been serving 14 years of annual dividend hikes and offers a current dividend yield of 3.5%, which should help its shareholders digest a double-digit- percentage share price decline over the past 12 months.
The Kellogg Company has provided investors with steady asset appreciation for more than three decades. Every share-price correction during that period proved to be a buying opportunity as the price bounced back and exceeded its pre-correction level every time. After losing more than a third of its value during the 2008-2009 financial crisis, the share price gained more than 125% before reaching its all-time high in July 2016.
The company is certainly facing some headwinds and needs to figure out how to handle some recent setbacks, such as discontinuing its operations in Venezuela and the subsequent seizure of their factory by the Venezuelan government. However, the company’s share price could start showing signs of trend reversal shortly.
Interested investors should be on the lookout for signs of recovery and be ready to initiate a long position at the first signs of a rising trend. Investors convinced that the share price has bottomed and might start bouncing back shortly should consider taking advantage of the upcoming ex-dividend date on March 31, 2018, and lock in eligibility for the next round of dividend distributions on the company’s pay date of June 15, 2018.
Kellogg Company (NYSE:K)
Headquartered in Battle Creek, Michigan, and founded in 1906, the Kellogg Company manufactures and markets ready-to-eat cereal and convenience foods. The company operates through U.S. Morning Foods, U.S. Snacks, U.S. Specialty, North America Other, Europe, Latin America and Asia Pacific segments. The Kellogg Company’s main products include cookies, crackers, savory snacks, toaster pastries, cereal bars, granola bars and bites, fruit-flavored snacks and ready-to-eat cereals. The company also offers a line of frozen breakfast foods, including waffles, pancakes and French toast. In addition to the Kellogg brand, the company offers its products under the Kashi, Bear Naked, Eggo, Morningstar Farms, Keebler, Cheez-It, Pringles, Famous Amos and several other brands. As of 2018, the company operated 25 manufacturing facilities in the United States. To support the distribution in approximately 180 countries, the company also operates an additional 31 plants internationally.
The company’s share price entered the trailing 12 months on a declining trend and passed through its 52-week high of $73.49 on June 16, 2017. The share price reversed trend in November 2017 and rose to within 4% of its 52-week high by mid-March 2018. However, that recovery was only temporary as the share price plunged nearly 20% to its 52-week low of $56.65 by May 2, 2018. Since bottoming out at the beginning of May, the share price regained 8.6% and closed on May 22, 2018 at $61.52.
Juxtaposed to the company’s share price troubles is the company’s dividend performance. The company has been paying dividends for nearly a century. It has not cut its dividend in the past two decades and has boosted its annual dividend over the past 14 consecutive years. The company’s current $0.54 quarterly distribution is 3.8% higher than it was in the same period last year. Additionally, the company’s current quarterly distribution is equivalent to a $2.16 annualized amount and a 3.5% yield, which is 17% higher than its 3% average yield over the past five years.
In addition to outperforming its own average dividend yield, the Kellogg Company’s current 3.5% yield is 81% higher than the 1.94% average yield of the entire Consumer Goods sector and 68% higher than the 2.1% average yield of all the companies in the Processed & Packaged Goods market segment. Furthermore, as the fifth highest current yield in the Processed & Packaged Goods segment, Kellogg’s yield is also 9.4% higher than the 3.2% average dividend yield of the segment’s dividend-paying companies.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.