#3 - Kellogg (NYSE:K)
Dividend stocks tend to perform well as interest rates decline. Value and income investors typically flee bonds and are looking for a return wherever they can get it. That makes stocks like Kellogg (NYSE:K) very attractive. The company has increased its dividend for the last 15 years (the last increase was issued in July 2019).
In addition to offering investors an attractive, and reliable, dividend, the company was offering some nice growth potential before the Covid-19 outbreak and subsequent social distancing guidelines. In the face of declining cereal sales, the company has put an emphasis on its snack foods. And when it comes to snack foods, Kellogg’s has a powerful quintet of brand names (Pop-Tarts, RXBAR, Pringles, Rice Krispies Treats, Cheez-It) that account for 75% of the company’s total snack sales.
Kellogg’s is also moving into the meatless product category with a soy-based line of products know as “Incogmeato”. And, Kellogg was also showing growth in emerging markets. And again, all of this was prior to the imposed social distancing guidelines.
With many Americans limited to only going out of their house to get groceries, it puts Kellogg’s in a good position. It will be interesting to see if the company gets a bump in sales into its core cereal products, as well as the snack foods that many families will find essential as they are confined in their homes.
Kellogg stock is down about 5% in 2020, but is up nearly 10% in the last 12 months. In its last earnings report, Kellogg’s beat analysts’ expectations for earnings and revenue. It’s likely that the company will enjoy a similar beat for the first quarter report which is scheduled for the end of April.
About Kellanova
Kellanova, together with its subsidiaries, manufactures and markets snacks and convenience foods in North America, Europe, Latin America, the Asia Pacific, the Middle East, Australia, and Africa. Its principal products include crackers, crisps, savory snacks, toaster pastries, cereal bars, granola bars and bites, ready-to-eat cereals, frozen waffles, veggie foods, and noodles.
More- Current Price
- $81.79
- Consensus Rating
- Hold
- Ratings Breakdown
- 1 Buy Ratings, 13 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $77.96 (4.7% Downside)
