The J.M. Smucker Company (SJM): This Stock Could Be Your Family Fortune

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ConAgra Foods, Inc. (NYSE:CAG) competes with Smucker in the area of consumer foods, which accounts for more than half of ConAgra’s sales. With brands such as Hunts, Healthy Choice, and Chef Boyardee, the company is known for producing second-tier foods. The gross margin of ConAgra is 23%, which is low compared to Smucker’s 35%. This shows that Smucker retains more of its revenue than ConAgra.

Kraft Foods Group Inc (NASDAQ:KRFT) is a recent spinoff of Mondelez International; it focuses on consumer packaged food and beverages. The company experienced issues related to its spinoff but has been slowly returning to business as usual. The company had a 2.1% and 2.4% increase in revenue and volume, respectively, during its last quarter. Kraft Foods Group Inc (NASDAQ:KRFT) produces coffee, and followed Smucker in reducing the price of its coffee by 6%. Kraft has a smaller coffee market share of at 6.8% compared to Smucker’s 11.8%.

Smucker has a lower dividend yield of 2.18%, compared to ConAgra Foods, Inc. (NYSE:CAG) and Kraft’s 2.80% and 3.60%, respectively. This is after a recent dividend increase of 11.5% by Smucker.

Conclusion

The J.M. Smucker Company (NYSE:SJM) continues to innovate quality products and is a great example of how a founding family can successfully run a publicly owned company.  The company continues to increase dividends and repurchase shares to return wealth to investors.  With a beta of 0.49 showing low volatility, this is a good defensive stock for risk averse investors.

The article This Stock Could Be Your Family Fortune originally appeared on Fool.com and is written by Ben Popkin.

Ben Popkin has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Ben is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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