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If 2011 has brought strong performance for Altera, it's done one better for
J.M. Smucker(SJM - Get Report), the food company behinds such brands as Smucker's, Jif, Folgers and Pillsbury. Shares of the food firm have gained more than 20% so far this year -- and they've more than doubled since the 2009 market bottom.
It's that double that makes J.M. Smucker's most recent dividend hike all the more compelling. The 9% dividend increase brings the firm's yield to 2.45% at current prices -- or more than 5% for those who've held since the start of 2009.
Like other food companies, Smucker has had to deal with the challenges of rising input costs in the last year or two. Even so, the company's scale has largely spared it from having to tighten its belt too much in 2011. The acquisition of coffee giant Folgers in 2008 substantially changed J.M. Smucker's business -- and the timing meant that Wall Street mostly underappreciated the implications until the recession started to shake itself out.
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High brand significance is one of the biggest advantages Smucker's has in its corner; consumers have proven less likely to substitute the firm's grocery offerings cheaper store brands. Cash flow generation is impressive at J.M. Smucker, and the firm is easily able to maintain the increased debt load that it took on as a result of bargain-priced expansion during the recession. Expect dividends to remain unencumbered in 2011.
Smucker is one of TheStreet Ratings'
top-rated food products stocks