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Pinnacle Foods Declares Dividend of $0.29 Per Share

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Price movement

Pinnacle Foods (PF) has a market cap of $5.8 billion. It fell by 0.34% to close at $49.52 per share on August 16, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 0.36%, 1.8%, and 18.1%, respectively, on the same day. PF is trading 0.52% above its 20-day moving average, 5.8% above its 50-day moving average, and 13.4% above its 200-day moving average.

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Related ETFs and peers

The PowerShares DWA Consumer Staples Momentum Portfolio ETF (PSL) invests 3.4% of its holdings in Pinnacle Foods. The ETF tracks an index of US consumer cyclical firms selected and weighted by price momentum. The YTD price movement of PSL was 3.4% on August 16.

The iShares Dow Jones US ETF (IYY) invests 0.02% of its holdings in Pinnacle Foods. The ETF tracks a broad, cap-weighted index of companies covering 95% of the US market.

The market caps of Pinnacle Foods’ competitors are as follows:

  • Mondelēz International (MDLZ) — $66.4 billion
  • General Mills (GIS) — $42.0 billion
  • ConAgra Foods (CAG) — $20.1 billion

Pinnacle Foods declares dividend

Pinnacle Foods has declared a quarterly cash dividend of $0.29 per share, a rise of ~12%, on its common stock. The dividend will be paid on October 10, 2016, to shareholders of record at the close of business on August 30, 2016.

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Performance of Pinnacle Foods in 2Q16

Pinnacle Foods reported 2Q16 net sales of $756.4 million, a rise of 19.7% over the net sales of $631.7 million in 2Q15. Sales from its Birds Eye frozen segment rose by 6.1% and sales from its Duncan Hines grocery and specialty foods segments fell by 2.7% and 8.0%, respectively, between 2Q15 and 2Q16.

PF reported Boulder Brands sales of $122.6 million in 2Q16. The company’s gross profit margin and EBIT (earnings before interest and tax) rose by 9.2% and 20.0%, respectively, between 2Q15 and 2Q16.

Its net income and EPS (earnings per share) rose to $45.8 million and $0.39, respectively, in 2Q16, compared with $43.7 million and $0.37, respectively, in 2Q15. It reported adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $141.5 million and $0.42, respectively, in 2Q16, rises of 29.5% and 16.7%, respectively, from 2Q15.

Pinnacle Foods’ cash and cash equivalents fell by 28.4% and its inventories rose by 9.5% between 4Q15 and 2Q16. Its current ratio fell to 2.0x and its debt-to-equity ratio rose to 2.5x in 2Q16, compared with 2.1x and 1.9x, respectively, in 4Q15.

Projections

The company has made the following projections for 2016:

  • adjusted EPS in the range of $2.10–$2.15, which includes ~$0.07–$0.08 from the Boulder Brands acquisition
  • input cost inflation at the low end of the range of 2%–3%
  • interest expense of ~$140 million
  • capital expenditure in the range of $115 million–$125 million

In the next article, we’ll discuss Wolverine World Wide.

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