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Mead Johnson Nutrition Just Declared Quarterly Dividend

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Price movement of Mead Johnson

Mead Johnson Nutrition Company (MJN) has a market cap of $13.6 billion. MJN fell by 1.2% to close at $73.16 per share on March 2, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were 0.66%, 1.7%, and -7.3%, respectively, as of the same day.

Currently, MJN is trading 1.8% above its 20-day moving average, 0.19% above its 50-day moving average, and -9.0% below its 200-day moving average.

The iShares Russell 3000 ETF (IWV) invests 0.09% of its holdings in Mead Johnson. IWV tracks a cap-weighted index that measures the investable US equities market, covering the entire market-cap spectrum, including micro-caps. The YTD price movement of IWV was -3.5% as of March 1, 2016.

The market caps of MJN’s competitors are as follows:

  • WhiteWave Foods (WWAV)—$7.1 billion
  • Post Holdings (POST)—$4.6 billion
  • Dean Foods (DF)—$1.8 billion
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Mead Johnson declared dividend

Mead Johnson Nutrition has declared a regular quarterly dividend of just over $0.41 per share on its common stock. The dividend will be paid on April 1, 2016, to shareholders recorded as of the close of business on March 14, 2016.

Mead Johnson’s performance in 4Q15 and 2015

Mead Johnson reported 4Q15 net sales of $967 million, a fall of 11.6% compared to net sales of nearly $1.1 billion in 4Q14. The company’s gross profit and EBIT (earnings before interest and tax) fell by 8.4% and 6.6%, respectively, in 4Q15 over 4Q14.

Its net income and EPS (earnings per share) fell to $128 million and $0.67, respectively, in 4Q15, compared to $158.4 million and $0.78, respectively, in 4Q14.

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2015 results

In 2015, MJN reported net sales of nearly $4.1 billion, a fall of 7.7% YoY (year-over-year). Its net income and EPS fell to $653.5 million and $3.27, respectively, in 2015, compared to $719.8 million and $3.54, respectively, in 2014.

Meanwhile, the company’s cash and cash equivalents rose by 31.1%, and inventories fell by 12.7% in 2015. Its current ratio rose to 2.1x in 2015, compared to 1.9x in 2014.

The price-to-earnings and price-to-sales ratios of Mead Johnson are 22.4x and 3.4x, respectively, as of March 2, 2016.

Projection

The company has made the following projections for 2016:

  • constant dollar sales growth in the range of 0%–2%
  • non-GAAP (generally accepted accounting principles) EPS in the range of $3.48–$3.60 based on current exchange rates
  • expectations of charges of ~$25 million–$30 million associated with its fuel for growth program in 2016

In the next part of this series, we’ll look at Allison Transmission.

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