National Beverage: Fond of FIZZ

03/07/2017 7:00 am EST


Glenn Rogers

Contributing Editor, Internet Wealth Builder and The Income Investor

National Beverage Company (FIZZ) is a small cap stock based in Florida that is really gaining traction from the trend away from traditional soft drinks and towards low-calorie, healthy, non-caffeinated beverages, explains Glenn Rogers, contributing editor to Internet Wealth Builder.

Its products have wide distribution through the U.S. with Lacroix, Faygo, and Shasta being three of the best known. Faygo Moon Mist and Shasta Tiki Punch have been made and marketed in the U.S. for over 100 years so you could say they have staying power.

These products are all made and distributed in the U.S., which these days is a big political plus. The company has twelve of its own manufacturing plants strategically located near major American cities.

Most beverage companies outsource their production, which makes National unique and helps improve their margins. Those margins are likely to improve even more when Congress reveals its long speculated corporate tax cuts.

Last year was a breakout one for the company. Sales for the past few years have been steady but not exciting but the last quarterly report really started showing some acceleration. The company has an earning release coming up on March 9, which should be a very positive event.

Additionally, the company is shareholder friendly, and recently declared a special dividend of $1.50 per share, its seventh since 2004. It has paid out 73% of earnings and has shown compounded growth of 23% over the last 10 years.

I believe it could be a takeover target for one of the larger beverage companies, particularly since the founder and CEO is in his eighties and growth is hard to come by for some of the beverage giants. National could be a great add-in for one of them.

Overall, the trend to healthy hydration is still in the early innings and there is no reason why National will not continue to benefit.

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