Campbell Soup · Company Review Thursday · Smuckers

Pantry Wars: Soup or PB&J?

Campbell Soup and Smucker’s are well known household brands. You’ve probably seen commercials about the Smucker’s Uncrustables or a throwback Campbell’s Tomato Soup ad all targeted to a family audience. Uncrustables appeal to the kids who don’t like the crust on their PB&J sandwich like me and Campbell’s Soup is clutch on those cold winter evenings you just want to warm up under a blanket. Now I understand peanut butter & jelly sandwiches or soups seem like unlikely sources for investment ideas, but nonetheless, I’ll try to make a case.

Campbell Smucker’s Summary
Underlying Brands V8, Pepperidge Farm, Bolthouse, Goldfish, Campbell Soup Jiff, Pillsbury, Crisco, Hungry Jack, Smucker’s Jelly I personally have more interation with the Campbell Soup brand, so I personally think Campbell wins here.
Market Capitalization $18,963,000 $17,666,000 Campbell Soup wins this category not by much though.
Price Per Share $60.87 $152.77 In my mind, both of them are priced a bit too high for me to be willing to pay for them. But between the two, I’d pick Smucker’s simply because their leaders feel more confident in their current position about generating revenue through its product offering.
EPS 2.28 5.76 Smucker’s wins this category pretty handily. Considering that the EPS of Smucker’s is more than double that of Campbell Soup’s, it make sense that Smucker’s price is more than double that of Campbell Soup.
Dividend(Yield) .31 (2.03%) .75 (1.95%) Seems like Smucker’s is a little stingy with the dividends, but for good reason. They recently acquired Big Heart Pet Brands so it took some cash to add diversity to the portfolio. Campbell didn’t report much  movement.
Avg. Free Cash Flow Growth (Since 2011) .85% 43.52% With weak cash flow, it’s hard to expect much growth from Campbell Soup. Combine that with a less than enthusiastic tone at the investor meeting, Campbell is struggling. Smucker’s takes this too.

 

Now I’ll be honest with you…if I’m going to pay those prices for a stock in the household consumer staples sector, I’d be looking at Proctor & Gamble or Clorox as well. They are priced at $86.62 and $131.50 respectively at the writing of this blog. But in this version of Pantry Wars, Smucker’s wins.

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