How Much Did J.M. Smucker Return to Shareholders in Fiscal 2016?


Jul. 5 2016, Updated 9:06 a.m. ET

Increased dividend

The J.M. Smucker Company (SJM) returned $750 million worth of cash to its shareholders in fiscal 2016 in the form of dividends and share repurchases. It also raised its quarterly dividend for fiscal 2016 by ~5%.

The first increased dividend of $0.67 per share was paid to shareholders on September 1, 2015. The company had a dividend yield of 1.8% as of June 29, 2016. The company’s management has been raising its dividend at a CAGR (compound annual growth rate) of 10.1% in the last five years.

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Recent dividend paid

On June 1, 2016, the company paid a cash dividend of ~$0.67 per share for its fiscal 4Q16 to shareholders on record as of May 13, 2016.

The following were the dividend yields of SJM’s peers in the industry as of June 29:

  • Mondelez (MDLZ) had a dividend yield of 1.5%.
  • Pinnacle Foods (PF) had a dividend yield of 2.2%
  • Flowers Foods (FLO) had a dividend yield of 3.2%.

The First Trust Capital Strength ETF (FTCS) and the Fidelity MSCI Consumer Staples Index ETF (FSTA) invest 1.8% and 3.2% of their respective portfolios in MDLZ.

Share repurchases

The company repurchased nearly 3% of its shares outstanding for ~$430 million. This was led by proceeds from the divestiture of its milk business and its strong free cash flow in fiscal 2016.

SJM repurchased 3.4 million shares in fiscal 4Q16. Its management mentioned during the earnings call that the lower share count would compensate for the EPS (earnings per share) impact of the eight months of lost profit associated with its divested milk business in fiscal 2017.

The company also exceeded its debt target for the year, reducing its total debt by nearly $750 million and ending the year with debt of $5.4 billion.


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