Summary
MKC built an impressive brand portfolio, with many #1 brands in the industry.
Investors can expect a healthy $2.28 payout from this Dividend Aristocrat stock.
Upcoming quarters will be to monitor as margins will be a key figure to profitability.
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This article has been written by Olivier Gelinas for Dividend Stocks Rock.
Everyone knows that the food industry doesn’t play gentle. Competition is intensive, margins are slim and developing new markets is costly. McCormick & Company (MKC) knows that too well. Founded in 1889, the company built a spicy empire, delivering flavor to consumers around the world. Dividend Aristocrat with its 32 consecutive years of increased dividends, investors seem to have appreciated the company’s strategic move this year. Stock price soared after the Reckitt Benckiser food acquisition. Going forward, the company might just have the lineup it needs to come on top of its peers to maintain its sustainability.
Understanding the Business
McCormick & Company operates in the flavor business. This $4.8B annual sales company brings out the flavor in meals around the globe. 150 countries and territories are using MKC’s spices, translating into many No. 1 brands in their categories. Operations are split into two segments. The consumer portfolio, representing 62% of the sales, in which we can find spices, extracts, condiments, marinades and more. Recently, the company added to their lineup French’s mustard as well as Frank’s Red Hot sauce, being part of a recent acquisition.
