Ingredion Inc (INGR), McCormick & Company, Incorporated (MKC), The J.M. Smucker Company (SJM): Three Companies That Add Taste and Texture to Your Portfolio

Jam, peanut butter, coffee, etc.

Food conglomerate The J.M. Smucker Company (NYSE:SJM), best known for its iconic jelly products, also makes Folger’s coffee, ice cream toppings, pancake syrup, and Uncrustables jelly sandwiches.

Members of The J.M. Smucker Company (NYSE:SJM) family still control more than 3% of the company and they serve in active management roles. This means they retain a vested interest in keeping the company going at a profitable pace.

Over the past five years, The J.M. Smucker Company (NYSE:SJM)’s revenue and free cash flow increased 125% and 364%, respectively (chart below). Smucker’s expansion in share price equates to 99% over the same time versus the S&P 500 return of 16%. Currently J.M. Smucker pays out 31% of its free cash flow in dividends. It currently pays out $2.08 per share per year yielding approximately 2% as of this writing.

SJM Revenue TTM data by YCharts

The future looks bright as The J.M. Smucker Company (NYSE:SJM)’s enters into emerging markets. International sales and profit increased 28% during its most recent quarter. Overall sales increased 6% in The J.M. Smucker Company (NYSE:SJM)’s most recent quarter and free cash flow declined 21%; however, free cash flow increased year to date due to lower inventory purchase needs. People like their jelly, donuts, and coffee, and with the company backed by strong management, Smucker should reward shareholders handsomely for the foreseeable future.

Conclusion

Food serves a vital role in society. The above companies make products that produce or enhance the eating experience. Over the long term they should provide superior returns with dividend payments while you wait. These companies deserve a place in your portfolio.

The article 3 Companies That Add Taste and Texture to Your Portfolio originally appeared on Fool.com and is written by William Bias.

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