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Heinz (HNZ) is not just a maker of ketchup. It's also a company that can deliver for its shareholders. Today, the stock isn't up that much; with a little over an hour to go before the market closes its doors for the day, it was higher by about 0.7%, with a price of $44.57, not too far away from the 52-week high of $47.84. Volume, however, is healthy, as is the one-year chart (save for the little rough bit on the right, which anyone would expect to see considering what's been going on in the major indexes as of late). The company did a cool thing this morning. Besides reporting a nice set of data for its fiscal fourth quarter, management raised the dividend. Music to the ears of those who count this equity as a portfolio member.
The new annual payout is $1.80 per share, a figure which represents an increase of over 7%. Sure, I like to see double-digit increases in dividends (or close to it), but we'll take a reasonable single-digit change, too.
Earnings per share came in at 60 cents, which was a penny better than expectations. Annual operating free cash flow from continuing operations, according to the press release, was strong at over $1 billion.
Long-term shareholders should love this quarterly release. No, we're not talking the greatest growth story ever told. We're talking a safe situation, one that might be applicable to participants who are desirous of defending themselves during the macro volatility.
However, as I've said before, don't kid yourself into thinking that a defensive stock can't go down. It can. Thing is, in the case of Heinz, you've at least got a good dividend yield to go along with the risk. No thesis is perfect, but owning names like Kraft (KFT) and Kellogg (K) and other stocks that are backed by brand equity linked to products people consume every day of the week might be the better alternative to rampant speculation in non-dividend-yielding businesses.
Disclosure: I don't own any company mentioned; positions can change without notice.
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