Up to date on January thirty first, 2025 by Bob Ciura
So as to grow to be a Dividend Aristocrat, an organization will need to have a powerful model and a dominant {industry} place. The Dividend Aristocrats are a gaggle of 69 firms within the S&P 500 Index, with 25+ consecutive years of dividend will increase.
With this in thoughts, we have now created a listing of all 69 Dividend Aristocrats.
You may obtain your free copy of the Dividend Aristocrats checklist, together with essential monetary metrics equivalent to price-to-earnings ratios and dividend yields, by clicking on the hyperlink under:
Disclaimer: Positive Dividend will not be affiliated with S&P World in any approach. S&P World owns and maintains The Dividend Aristocrats Index. The knowledge on this article and downloadable spreadsheet is predicated on Positive Dividend’s personal evaluate, abstract, and evaluation of the S&P 500 Dividend Aristocrats ETF (NOBL) and different sources, and is supposed to assist particular person buyers higher perceive this ETF and the index upon which it’s based mostly. Not one of the data on this article or spreadsheet is official information from S&P World. Seek the advice of S&P World for official data.
A fantastic instance of a Dividend Aristocrat with an industry-leading model is shopper merchandise firm McCormick & Firm (MKC).
McCormick has paid dividends every year since 1925 and has elevated its dividend for 39 years in a row.
Its dividend progress streak is because of its high-quality enterprise. McCormick is the worldwide chief in meals spices, seasonings, and flavors. It has grown its management place organically and likewise by means of acquisitions.
This has fueled McCormick’s dividend progress for a few years.
Enterprise Overview
McCormick was shaped in 1889, when founder Willoughby M. McCormick began making flavors and extracts in his cellar, which he then offered door-to-door. At first, the enterprise grew at a gradual tempo.
In 1896, McCormick entered spices by issuing its first McCormick’s Cookbook. Over time, the corporate has steadily constructed itself into the main spices and seasonings firm on this planet.
McCormick & Firm produces, markets, and distributes seasoning mixes, spices, condiments, and different merchandise to clients within the meals {industry}.
Main manufacturers embrace McCormick, Lawrys, Stubb’s, Membership Home, Ducros, Schwartz, Kamis, Kohinoor, Zatarains, Thai Kitchen, and Merely Asia.
On January twenty third, 2025, McCormick reported fourth-quarter and full year-results for the interval ending November thirtieth, 2024.
Supply: Investor Presentation
For the quarter, income grew 2.7% $1.8 billion, which was $28 million greater than anticipated. Adjusted earnings-per-share of $0.80 in contrast unfavorably to $0.85 within the prior yr, however this topped estimates by $0.03.
Quantity and blend improved 2.2% whereas pricing was weaker by 0.4%. The Shopper section grew 2.4% for the interval. Quantity and blend enhancements (+3.7) have been solely partially offset by pricing (-1.3%).
The Americas had natural progress of three.7% as quantity features have been offset by decrease costs. EMEA continues to carry out properly, with gross sales greater by 2.9% as quantity and blend have been up 4.9%.
Asia/Pacific decreased 10.3% on account of weaker ends in China. Taste Options grew 0.8% as pricing (+1.0%) was offset by decrease volumes (-0.2%). The Americas grew 1.4% on account of higher pricing.
EMEA decreased 4.0% as demand from fast service eating places was down. Asia/Pacific returned to progress as gross sales have been up 6.5% on account of will increase in quantity associated to promotions and new merchandise.
McCormick’s gross margin expanded 20 foundation factors to 40.2% for the quarter and improved 90 foundation factors to 38.5% for the yr.
For the yr, income grew 1% to $6.7 billion whereas earnings-per-share of $2.92 in comparison with $2.52 within the prior yr.
Development Prospects
Going ahead, there’s loads of room for continued progress for McCormick, on account of progress within the rising markets, and likewise acquisitions.
First, worldwide progress is a powerful catalyst for McCormick. The gradual reopening of China following strict pandemic-related restrictions is already benefiting the corporate.
Increased demand for herbs and spices, in addition to elevated costs additionally contributed to gross sales progress within the area. Individually, acquisitions are a serious a part of McCormick’s progress technique.
In 2018, McCormick acquired Frank’s RedHot and French’s as a part of a $4.2 billion buy of RB Meals, the meals division of shopper merchandise large Reckitt Benckiser (RGBLY).
This was the most important deal in McCormick’s historical past, and has been a serious driver of progress over the previous a number of years.
Supply: Investor Presentation
McCormick has utilized its management place in {industry} to rapidly increase these high manufacturers globally. Frank’s RedHot is the main sizzling sauce model within the U.S., whereas French’s leads the mustard class.
The frequent theme inside McCormick’s M&A technique is that it seeks out high manufacturers that lead their respective classes, that may be simply scaled up.
This theme is obvious as soon as once more with the latest acquisitions of Cholula Scorching Sauce and FONA Worldwide.
First, in November 2020 McCormick acquired Cholula, the premium Mexican sizzling sauce model, for $800 million. This acquisition matches completely into McCormick’s technique of buying top-quality manufacturers and rapidly scaling them.
McCormick adopted this up with the December 2020 acquisition of FONA Worldwide, a number one producer of unpolluted and pure flavors with clients throughout the meals, beverage, and dietary markets.
McCormick acquired FONA Worldwide for $710 million in money.
We count on that the corporate’s varied acquisitions, mixed with its personal sturdy manufacturers, will lead to sturdy earnings-per-share progress going ahead.
We estimate that McCormick can develop earnings at a price of seven% per yr by means of fiscal 2030.
Aggressive Benefits & Recession Efficiency
The 2 most essential aggressive benefits for McCormick are its model power and international scale. McCormick is the highest model within the international spices and seasonings {industry}, which is anticipated to develop for the following 5 years.
Because of this, this offers McCormick leverage with retailers and pricing energy. These qualities assist the corporate generate constant income every year, even when the financial system enters recession.
McCormick managed to develop earnings-per-share every year over the past recession. Earnings-per-share in the course of the Nice Recession are under:
2007 earnings-per-share of $1.92
2008 earnings-per-share of $2.14 (11% improve)
2009 earnings-per-share of $2.34 (9.3% improve)
2010 earnings-per-share of $2.65 (13% improve)
As you’ll be able to see, McCormick & Firm grew earnings-per-share yearly by means of the Nice Recession.
Not solely that, the corporate averaged double-digit annual progress every year, which was extremely spectacular and a really uncommon accomplishment, even for a Dividend Aristocrat.
Valuation & Anticipated Returns
On the midpoint of full-year steering, McCormick expects adjusted earnings-per-share of roughly $3.02 this yr. Because of this, the inventory trades at a ahead price-to-earnings ratio of 25.6.
That is barely above our truthful worth price-to-earnings ratio of ~25.
McCormick’s valuation a number of has expanded significantly in recent times, as the corporate has turned in sturdy earnings progress. Now, the inventory seems to be barely overvalued.
If the P/E a number of contracts to our goal P/E by 2030, the corresponding impression would scale back shareholder returns by -0.5% per yr over the following 5 years.
Shareholder returns will even be derived from anticipated earnings progress and dividends. The corporate’s sturdy model and a number of catalysts for future progress ought to add as much as greater EPS progress as properly.
We count on MKC to develop its EPS by 7% per yr, whereas the inventory has a 2.3% present dividend yield. Complete annual returns may attain 8.8% per yr over the following 5 years, making the inventory a purchase.
Remaining Ideas
McCormick dominates the spices and seasonings class. Its sturdy manufacturers present the corporate with high-profit margins and progress alternatives, each within the U.S. and the worldwide markets.
McCormick has a market-beating dividend yield of two.3%, and has a really sturdy dividend progress historical past. The corporate ought to be capable of carry the dividend every year, seemingly at a mid-to-high single-digit annual price.
With an anticipated price of return of 8.8% yearly going ahead, we price the inventory a maintain.
Moreover, the next Positive Dividend databases comprise essentially the most dependable dividend growers in our funding universe:
If you happen to’re searching for shares with distinctive dividend traits, think about the next Positive Dividend databases:
The key home inventory market indices are one other stable useful resource for locating funding concepts. Positive Dividend compiles the next inventory market databases and updates them month-to-month:
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