Spice up your portfolio with a sprinkle of this dividend darling
I now have two shares worth $204.04 (2.15% of my portfolio) at an average cost of $99.43 (I bought my other share early last month for $97).
If you’re not familiar with the business, look in your cabinet or on your spice rack and get acquainted. Go ahead, don’t be shy.
The brand is everywhere. McCormick and Co. (MKC) distributes spices, seasoning mixes, condiments, etc. to each and every nook and cranny of the food industry and, well, if you don’t think that’s a big deal, you haven’t had unseasoned grilled chicken. The stuff can be amazing with a little Cajun seasoning or even a pinch of good-ole’ salt and pepper, but tends to taste like a cardboard box without it.
Food, as awesome as it is, is often only as good as what it’s seasoned with: exactly why McCormick and Co. isn’t going anywhere anytime soon.
But don’t just take my word for it … the company was ranked No. 14, and first in the food products industry, in the 2017 Global 100 Most Sustainable Corporations Index at the World Economic Forum in Davos, Switzerland.
Admittedly, I hadn’t heard of the Global 100 Most Sustainable Corporations Index prior to penning this post, but I’m pretty sure it’s legit. Sustainability is key when it comes to dividend-growth investing. The longer a company is around, and the more it’s able to grow its business, the more it can pay out in dividends … which is something McCormick and Co. has been doing for quite some time.
MKC has raised its dividend each of the last 30 years. That’s the stat that drew me in. The yield isn’t eye-popping (1.84%), but it’s consistently growing. It’s annualized payout of $1.88 means I’ll pocket $0.47 per share each quarter … until they raise it again (fingers crossed). MKC just raised its quarterly payment from $0.43 last quarter, so it looks like I’ll have to wait at least three more quarters to get a raise.
With a P/E ratio of 27.57, shares aren’t as cheap as I’d like. The profit margin (12.83%), EPS growth (6.90%) and dividend payout ratio (50.95%) make up for it, though.
I should probably mention Trump’s proposed border tax wouldn’t be a good thing for McCormick and Company as a good chunk of its ingredients are grown south of the border. As the CEO put it, we “can’t move the equator.” If you’re considering buying a few shares, it might be good to keep that in mind. I’m not all that concerned as my plan is to hold for a long, long time.
If interested, here are some links to posts about my most recent purchases:
Disclaimer: I’m the furthest thing from a pro investor you’ll ever find, so don’t confuse my blog posts with sound investment advice. I love to invest and am a big fan of blogging … so that’s what I do. I share my success and failures because I enjoy documenting the journey.