VelhoJunior/iStock Editorial via Getty Images The Campbell's Company ( CPB ) is offering a 7% dividend yield but this is a trap in a different way. This sector has been punished over the past year, so all their competitors have lower share prices and higher yield. The dividend payout is safe, in my opinion, but this is most likely not the bottom in share price. The Campbell's Company was originall...
VelhoJunior/iStock Editorial via Getty Images The Campbell's Company ( CPB ) is offering a 7% dividend yield but this is a trap in a different way. This sector has been punished over the past year, so all their competitors have lower share prices and higher yield. The dividend payout is safe, in my opinion, but this is most likely not the bottom in share price. The Campbell's Company was originally founded in 1869, and went public in 1954. Below is the long term share performance: Data by YCharts Their brand portfolio is somewhat diverse with 16 brands totao, but their major standouts are Campbell's, Goldfish, Pepperidge Farms, and Rao's, all of which bring in over a billion dollars in sales. The current business model focuses primarily on North America, after shedding all international divisions in 2019. They employ over 13,000 people with over 23 production facilities. Below is the return profile for CPB and their competitors: Company Revenue 10-Year CAGR Median 10-Year ROE Median 10-year ROIC EPS 10-Year CAGR FCF 10-Year CAGR CPB 1.5% 14% 5% -5.6% -0.3% Kraft Heinz ( KHC ) -0.5% 5.3% 4.2% n/a 6.2% General Mills Inc. ( GIS ) 0.8% 13.5% 8.4% 3.8 3.4 Conagra Brands ( CAG ) 2.9% 9.6% 6.5% n/a 1.9% The JM Smucker Company ( SJM ) 1.1% 30.5% 10.9% n/a -3% Hormel Foods Corporation ( HRL ) 2.4% 14.2% 11% -6.3% -4.1% Click to enlarge Capital Allocation Let's see how capital has been allocated for the past decade: Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Revenue 7,961 5,837 6,615 8,107 8,691 8,476 8,562 9,357 9,636 10,253 EBIT 1,376 1,225 972 1,074 1,295 1,270 1,148 1,312 1,226 1,353 FCF 1,150 950 898 1,014 1,097 760 939 773 668 705 CAPEX 341 338 407 384 299 275 242 370 517 426 Acquisitions 6,781 47 11 2 1 13 2,646 144 Debt Repayment 8,923 8,492 10,007 6,998 7,408 1,501 997 4,315 5,676 3,346 Dividends 390 420 426 423 426 439 451 447 445 459 Repurchases 141 435 86 34 164 120 65 62 SBC 64 60 61 58 61 64 59 63 99 57 Click to enlarge Source I don't have much criti...