McCormick: Spice Up Your Portfolio

03/04/2014 7:00 am EST


Vita Nelson

Founding Publisher and Editor, Moneypaper

The recent sell-off might scare some folks, but it also relieved some of the overvaluation that may have built up in some stocks, advises dividend investing specialist Vita Nelson in Moneypaper.

Still, it can be difficult to find outright bargains—stocks trading at low price/earnings multiples.

The good thing about many DRIP stocks is that they represent well-known businesses that entail straight-forward operations and stable product lines.

For conservative, long-term investors, especially those planning to use dollar-cost averaging, that provides an ideal match between investor and 'compounding machine' that can last for years, if not decades of happy 'marriage.'

Founded in 1889 and headquartered in Sparks, Maryland, McCormick & Company (MKC) is a leading manufacturer, marketer, and distributor of spices, seasonings, flavorings, and other specialty food products for the consumer, industrial, and foodservice markets.

Its brands include Lawry's, McCormick, Zatarain's, Simply Asia, and Thai Kitchens (in the United States), Club House (in Canada), Ducros, Vahine, and Silvo (in Europe), and Schwartz (in the United Kingdom). Foreign operations account for over 40% of total revenues.

Consensus estimates called for the company to earn about $3.32 per share for the fiscal year that ends in November, and to net about $3.63 in fiscal 2015, compared with $3.13 in fiscal 2013. The dividend has been increased for 28 consecutive years and provides a yield of 2.3%.

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