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Mead Johnson Nutrition Declares Dividend of $0.41 Per Share

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Price movement

Mead Johnson Nutrition (MJN) has a market cap of $14.9 billion. It rose by 0.04% to close at $79.99 per share on September 8, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -6.0%, -9.7%, and 2.4%, respectively, on the same day. MJN is trading 6.3% below its 20-day moving average, 9.1% below its 50-day moving average, and 1.4% below its 200-day moving average.

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Related ETFs and peers

The Guggenheim S&P Equal Weight Consumer Staples ETF (RHS) invests 3.1% of its holdings in Mead Johnson Nutrition. The ETF tracks an equal-weighted index of large-cap US consumer staples stocks drawn from the S&P 500. The YTD price movement of RHS was 7.4% on September 8.

The iShares Russell 3000 ETF (IWV) invests 0.08% of its holdings in Mead Johnson Nutrition. The ETF tracks a cap-weighted index that measures the investable US equities market, covering the entire market-cap spectrum, including micro-caps.

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

  • WhiteWave Foods (WWAV) — $9.8 billion
  • Post Holdings (POST) — $5.4 billion
  • Dean Foods (DF) — $1.5 billion

Mead Johnson Nutrition declares dividend

Mead Johnson Nutrition has declared a regular quarterly dividend of $0.42 per share on its common stock. The dividend is payable on October 3, 2016, to shareholders of record at the close of business on September 19, 2016.

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Performance of Mead Johnson in 2Q16

Mead Johnson Nutrition reported 2Q16 net sales of $941.5 million, a fall of 8.8% from the net sales of $1.0 billion in 2Q15. Sales from its Asia, Latin America, and North America and Europe segments fell by 11.1%, 16.1%, and 0.62%, respectively, between 2Q15 and 2Q16. The company’s gross profit margin and EBIT (earnings before interest and tax) fell by 1.3% and 6.5%, respectively.

Its net income and EPS (earnings per share) fell to $155.1 million and $0.83, respectively, in 2Q16, compared with $162.9 million and $0.80 in 2Q15. It reported non-GAAP (generally accepted accounting principles) EPS of $0.88 in 2Q16, a rise of 15.8% from 2Q15.

MJN’s cash and cash equivalents rose by 0.86% and its inventories fell by 3.9% between 4Q15 and 2Q16. Its current ratio rose to 2.3x in 2Q16, compared with 2.1x in 4Q15.

The company reported that “additional savings opportunities of $60 million have been identified within Fuel for Growth, resulting in expected total cost savings of approximately $180 million by 2018. The program is ahead of schedule and is now expected to deliver approximately $75 to $80 million of savings in 2016.”

Projections

The company has made the following projections for 2016:

  • sales 0%–2% lower than in 2015 on a constant dollar basis, or 5%–7% lower on a reported basis, reflecting increased customs at border points in China, a rise in trade investments in China, and a fall in the US market share in 1H16
  • GAAP EPS in the range of $2.91–$3.03
  • non-GAAP EPS in the range of $3.48–$3.60

In the next part of this series, we’ll discuss Ford Motor (F).

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