Kellogg: A Solid Play for Growth and Income

12/19/2017 5:00 am EST


Vita Nelson

Founding Publisher and Editor, Moneypaper

The Kellogg Company (K), the multinational food manufacturing company headquartered in Battle Creek, Michigan, has long history of consistent earnings growth and dividend payments makes it a solid company, notes dividend expert Vita Nelson, editor of DirectInvesting.

It is considered a well-diversified business with a durable competitive advantage over its rivals. The company enjoys a solid management and excellent corporate culture.

Consensus estimates call for the company to earn about $4.04 per share this year, up from $3.74 per share last year, and to go to about $4.26 per share next year.

It has paid dividends to investors since 1923 and has increased its payments for 12 consecutive years. During the past five years, it has increased its dividends at an average rate of 3.8%, with its quarterly payment of $0.54 currently providing a yield of 3.20%.

Technically, Kellogg also looks attractive, trading 20.2% below its all-time high, and 3.8%below its 200-day moving average line (200sma), while it is forming a long base (price consolidation pattern) between $82 and $59, in which $59 is acting as a technical support level.

Kellogg’s dividend reinvestment plan charges no fees for cash investing, dividend reinvestment, automatic investment or termination of the plan. With the stock being fundamental and technically attractive, this may be an excellent entry point for investors with a longer-term investment horizon.

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