Consumer Sector Ideas

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>>> Philip Morris Ramps Up Dividend By 2.6% As Jefferies Sees Headwinds


SmarterAnalyst

September 10, 2020


https://finance.yahoo.com/news/philip-morris-ramps-dividend-2-110456353.html


Philip Morris International announced that it is raising its regular quarterly dividend by 2.6% to an annualized rate of $4.80 per share.

Shares closed 1.8% higher at $80.47 on Wednesday after Philip Morris (PM) said that its board of directors increased its quarterly dividend to $1.20 per share, up from $1.17 per share. The dividend is payable on October 13, 2020, to shareholders of record as of September 24, 2020. The ex-dividend date is September 23, 2020.

Tobacco giants including Philip Morris have been under pressure as health awareness, a stricter regulatory environment and the emergence of alternatives like e-cigarettes over recent months have led to a decline in cigarette volumes. Yet, some investors prefer these companies for their high dividend yields. Philip Morris has increased its annual dividend every year since becoming a public company in 2008, representing a total increase of 160.9%, or a compound annual growth rate of 8.3%.

Furthermore, the company has been focusing on capturing the demand for heated tobacco products and its IQOS tobacco heating device to offset a decline in cigarette shipments.

Shares in PM are currently trading down 5.5% year-to-date after recouping a chunk of this year’s earlier losses, and analysts have a cautiously optimistic Moderate Buy consensus on the stock’s outlook. This is with a $88.43 average analyst price target (9.9% upside potential).

Jefferies analyst Owen Bennett last month raised the stock’s price target to $73 from $70 due to FX gains but maintained a Hold rating noting that an expected volume miss and multiple headwinds in 2021 could be overlooked by investors. (See Philip Morris stock analysis on TipRanks).

"The bigger risk for us on PM (vs. cigs), and the reason we remain cautious near term, is possible heated slowdown,” Bennett wrote in a note to investors. “While we increase our estimates for the current year, we do think the pace of growth could slow into FY21.”

Bennett expects heated volumes for FY21 at 86 billion vs the target of 90-100 billion.

“Likely a bigger risk over volumes is to sales, and the threat of heated taxes. We think as we enter a recession, increased taxes are likely. The best indicator of this is Italy, the largest EU heated market, where a widely supported amendment to hike taxes was proposed in July" he said.

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Home Depot - >>> If You're Retired, Consider Buying These 3 Stocks

Not only do these companies have stable businesses with growing dividend payouts, they can also beat the market.


Motley Fool

by Jon Quast

Aug 31, 2020


https://www.fool.com/investing/2020/08/31/if-youre-retired-consider-buying-these-3-stocks/


Investors assign labels to companies at the risk of creating false dichotomies. For example, "growth stocks" and "value stocks" are two prevalent categories, but these ideals aren't necessarily opposed.

Another misleading label is "retirement stock." On the surface, it typically suggests a company with a stable business paying a healthy dividend. And that's a great goal. But a retirement investment doesn't have to come at the expense of giving up any chance of beating the market average. Instead, there are stocks that offer the complete package of income and growth.

For three companies fitting this description, consider Lockheed Martin (NYSE:LMT), Home Depot (NYSE:HD), and Starbucks (NASDAQ:SBUX). All three have stable businesses, growing dividend payouts yielding at least 2%, and long histories of market-beating performance.


Lockheed Martin

Under President Trump, government contractor Lockheed Martin has benefited from increased military spending. The company had $46 billion in net sales in 2015. In 2019, that figure was $60 billion, up around 30%. It used its record-setting results to continue rewarding shareholders by buying back stock and paying a growing dividend that currently yields 2.4%.

Even though Lockheed Martin has benefited under the current administration, investors don't need to fret about the upcoming election. Every president brings an agenda to the national budget, but the implementation can take years. Furthermore, the company can endure Pentagon budget cuts because it provides certain products and services that aren't in danger of being cut. And the contractor had a record backlog of $150 billion as of the second quarter of 2020. This is already under contract and will be realized over the course of years.

Besides that existing backlog, Lockheed Martin has inked a $62 billion deal to manufacture F-16 fighter jets for U.S. allies. This decade-long tailwind isn't reliant on domestic budget decisions. Additionally, new CEO James Taiclet believes the company has something to offer in the development of 5G technology, which could even provide an unforeseen growth avenue.

In short, Lockheed Martin's core business is safe, it has new avenues for growth, and I expect it will keep rewarding shareholders over the next five years as it's done over the previous five.


Home Depot

I consider Home Depot's business safe because it sells products for something virtually everyone has: a home. We all live somewhere, and whether it's regular maintenance or cosmetic upgrades, we incur costs somewhere. The company has a broad application, equally appealing to the professional contractor and the do-it-yourself customer. And as this stable business keeps humming, management has systematically reduced the outstanding share count (boosting per-share profits) and regularly increased the dividend.

We may be in a global pandemic, but Home Depot is thriving like never before. In the quarter ending Aug. 2, the company had record quarterly sales of $38 billion, up 23% year over year. And in the first half of 2020, net sales are up 16%, as people stuck at home decide to tackle their to-do lists.

It's not realistic to expect the good times to keep rolling like this for Home Depot. As to-do items get checked off, customers are likely to decrease these spending levels in coming quarters. Furthermore, the company benefited from inflation in items like lumber, which are probably only temporary spikes resulting from the coronavirus disruption to supply chains. These are headwinds facing Home Depot's year-over-year comparisons.

But it's also not realistic to expect Home Depot's business to fall off a cliff -- only return to normal. And under normal conditions, Home Depot grows revenue, grows profits, and grows its dividend. While I think both Lowe's and Home Depot are winners, I acknowledge Home Depot's dividend yield is superior at 2%, versus 1.4% for Lowe's.


Starbucks

As a global food-service company, Starbucks was hit particularly hard by the coronavirus. Through the first three quarters of its fiscal 2020, net revenue is down 12.4% from the comparable period in fiscal 2019. The impact was most acute in the third quarter, with net revenue down 38%. But despite the challenge of limited cafe seating, Starbucks didn't pause or reduce its dividend.

The worst is hopefully over for Starbucks. It started Q3 with 56% of U.S. locations closed, but ended the quarter with 96% open. That led to a steady improvement in sales. In fact, comparable sales at U.S. locations that were open for the entire quarter were actually up 2% year over year in July, suggesting business will return to normal soon after everything's back open.

Starbucks has been a massive winner over the long haul, a 100-bagger since 1994. But of the three stocks here, Starbucks is the one that has underperformed the market over the last five years. Buying today gives retirees a stock still down 15% from highs set in 2019, with great growth prospects. The company looks like a buy as it opens new locations in China again after a brief pause, and as it pursues better profits in the U.S. by closing low-volume locations and replacing them with operations that are to-go only.

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>>> Church & Dwight Gains 30% in 3 Months on Pandemic-Led Demand


Zacks

August 13, 2020


https://finance.yahoo.com/news/church-dwight-gains-30-3-151303245.html


Amid all the coronavirus disruptions, a number of consumer staple companies appear to be on safe grounds. These companies are benefiting from the rising demand for essential items amid the pandemic-led increased at-home consumption and pantry-loading trends. One such player gaining from these trends is Church & Dwight Co., Inc. CHD, which has returned 30.3% in the past three months, outpacing the industry’s growth of 16.8%. Also, the company has comfortably outperformed the S&P 500 and the Zacks Consumer Staples sector’s respective gains of 16.5% and 12.5%.

Notably, Church & Dwight had earlier announced that all its products have been categorized as essential commodities, per the requirements and guidance of the government. Hence, the company has been witnessing significant increases in demand for its products, especially household cleaning products as consumers are focusing on increased cleanliness. Also, the demand for brands like FLAWLESS is benefiting from elevated at-home grooming sessions.

Other than Church & Dwight, other consumer staple stocks gaining from the increased demand trends include Clorox CLX, Colgate-Palmolive CL and Procter & Gamble PG, to name a few.

Robust Q2 Results & Guidance

Robust demand drove Church & Dwight in second-quarter 2020, wherein the top and bottom lines rose year over year and beat the consensus mark. Earnings were backed by solid sales, improved gross margin and reduced marketing costs. Results gained from the strong household and personal care businesses owing to consumers’ shifted preference for essential products amid the coronavirus outbreak. In this regard, the company witnessed double-digit growth in the consumption of products like gummy vitamins, women’s hair removal, cleaners and baking soda. Markedly, online sales also remained sturdy.

The solid results encouraged management to raise its sales and earnings guidance for 2020. The company now anticipates sales growth of 9-10% compared with 6.5% growth expected earlier. For 2020, adjusted earnings per share are expected to grow 13%, higher than the previously mentioned 7-9% increase. The robust outcome and guidance have been boosting investors’ sentiments as Church & Dwight’s shares have gained 5.3% since the earnings release on Jul 31.

Growth Drivers

Church & Dwight has been benefiting from a robust brand portfolio, thanks to its focus on innovation and buyouts. Notably, the company earlier said that it looks forward to having 20 power brands in its portfolio, over time. Additionally, the company’s regular innovation helps improve brand positions and market share in the consumer categories. During its first-quarter conference call, management stated that it is focused on innovation and R&D spending for product development even amid the pandemic.

Talking of buyouts, we note that FLAWLESS has been a prudent addition to Church & Dwight’s portfolio. Sales in the FLAWLESS brand contributed to its Consumer Domestic segment’s results in the second quarter of 2020. The brand witnessed robust consumption growth from May to July due to customers’ reduced access to salons. The brand is poised to keep gaining from rising at-home grooming trends and management has solid advertising plans in place for FLAWLESS for the second half of 2020. Some of the previous noteworthy acquisitions of the company include WATERPIK, Agro BioSciences and VIVISCAL business.

Can Margin Concerns be Offset?

The company is grappling with a rise in expenses, such as SG&A costs. Notably, adjusted SG&A expenses increased 30 bps in the second quarter of 2020 due to impacts of acquisitions, elevated incentive compensation and R&D investments. Additionally, the company witnessed escalated manufacturing costs due to COVID-19 supply-chain expenses. Management expects gross margin to fall in the second half due to new product promotional support, FLAWLESS accounting effect, increased tariffs on WATERPIK and additional investments in manufacturing and distribution capacity. Incidentally, management plans to make additional investments to boost manufacturing, R&D, consumer research, digital advertising, new product development and predictive analytics in the second half of 2020, which is likely to spike up costs.

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>>> Church & Dwight Jumps 7% on 2Q Earnings; Analyst Sees More Upside Ahead


SmarterAnalyst

August 2, 2020


https://finance.yahoo.com/news/church-dwight-jumps-7-2q-065243989.html


Shares of Church & Dwight (CHD) soared nearly 7% on Friday, thanks to its better-than-expected 2Q earnings and upbeat guidance. It's adjusted EPS increased by 35.1% to $0.77 year-over-year and beat analysts’ estimates of $0.63.

Revenues grew 10.6% to $1.19 billion year-over-year and surpassed Street estimates of $1.15 billion. Robust demand for household and personal care products amid the COVID-19 pandemic supported its 2Q sales.

Buoyed by strong quarterly results, the company raised its 2020 adjusted EPS growth outlook to 13% from the previous projection of a 7%-9% increase. CHD’s anticipated revenue growth guidance range of 9%-10% also exceeded Street estimates of an 8% increase.

Oppenheimer analyst Rupesh Parikh raised the price target on the stock to $105 (9% upside potential) from $100 and reiterated a Buy rating. Parikh said, "We still see double-digit upside from here, even following the recent rally. Broad-based organic sales momentum coupled with defensive characteristics of the CHD model continue to setup shares for further outperformance, in our view"

Overall, CHD has a Moderate Buy analyst consensus. The average analyst price target stands at $92.20, implying 4.3% downside potential. (See CHD stock analysis on TipRanks).

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>>> YETI Holdings, Inc. (YETI) designs, markets, retails, and distributes products for the outdoor and recreation market under the YETI brand in the United States, Canada, Australia, and Japan. The company offers hard and soft coolers, as well as storage, transport, outdoor living, and associated accessories. It also provides drinkware products, including colsters, lowballs, stackable pints, mugs, tumblers, bottles, and jugs, as well as accessories comprising bottle straw caps, tumbler handles, and jug mounts under the Rambler brand. In addition, the company offers YETI-branded gear products, such as hats, shirts, bottle openers, ice substitutes, and dog bowls. The company sells its products through independent retailers, including outdoor specialty, hardware, sporting goods, and farm and ranch supply stores, as well as through Website. YETI Holdings, Inc. was founded in 2006 and is headquartered in Austin, Texas.

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>>> Brown-Forman Creates Two International Units to Unlock Value


Zacks

June 11, 2020


https://finance.yahoo.com/news/brown-forman-creates-two-international-124112242.html


Brown-Forman Corporation BF.B revealed some changes to its organizational structure with an aim to unlock the growth potential of markets, brands and people. The changes will mainly relate to its international business, which will be split into two parts — Europe and Emerging International. The changes will be effective from Aug 1, 2020.

The Europe division will primarily comprise the UK/Ireland; Germany/Czechia; France/Spain/Portugal; Poland; and the greater Europe markets that make up for the Developing Europe markets. Meanwhile, markets in the Emerging International division will mainly include — Global Travel Retail (GTR); Asia; Australia/New Zealand; Latin America; and Russia/CIS/Turkey/India/Middle East and Africa.

To oversee the operations, the company appointed Marshall Farrer as the president of the Europe division and Thomas Hinrichs as the president of Emerging International.

The move is also in sync with Brown-Forman’s goal to deliver balanced growth across geographies by establishing competitive routes to consumers. The company notes that this calls for a more agile and simplified organizational structure.

Earlier this week, Brown-Forman reported mixed fourth-quarter fiscal 2020 results, wherein earnings missed estimates and revenues beat the same. Results were marred by the impacts of the coronavirus pandemic on its on-premise channel — representing 20% of its global business — and the Travel Retail business. Meanwhile, strong growth in the off-premise and e-premise channels in most of the developed markets supported the top line.

The nationwide lockdowns and government restrictions imposed to curtail the spread of coronavirus led to increased at-home consumption and pantry loading, which mainly resulted in accelerated growth in the channels.

In the United States, the company witnessed a significant acceleration in the off-premise takeaway trends for alcoholic beverages since the pandemic spread. While the off-premise channel benefited initially from the robust pantry-loading trends in March, the company notes that consumption trends have gradually shifted from on-premise due to increased at-home consumption occasions. Further, it witnessed impressive growth for its brands in the e-premise channel, as consumers made fewer shopping trips. The company benefited from quickly shifting focus and resources based on consumer demand trends. This also led Brown-Forman to report strong underlying sales growth in the United States.

Driven by the robust trends despite the ongoing impacts of the pandemic, shares of this Zacks Rank #3 (Hold) company gained 36.8% in the past three months compared with the industry’s growth of 22.3%.

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>>> Celsius Holdings (CELH) -


https://www.kiplinger.com/investing/stocks/small-cap-stocks/601067/10-splendid-small-cap-growth-stocks-to-buy


Market value: $928.4 million
YTD total return: 177.0%
3-year annualized revenue growth: 48.9%


Morningstar classifies Celsius Holdings (CELH, $13.38) as a "speculative growth" stock, which isn't surprising given that it participates in the ultra-competitive world of beverage sales.

Operating under the Celsius brand, the Florida-based company sells healthy carbonated and non-carbonated energy drinks that contain no sugar, aspartame, high-fructose corn syrup, artificial preservatives, etc. Instead, it focuses on healthy ingredients such as ginger, guarana, green tea and essential vitamins.

When Celsius first launched its products in 2009, it marketed its drinks to the weight-loss crowd and found limited traction. It burned through $15 million in IPO money within a year. Current CEO John Fieldly came on board as CFO in 2012, just as it was headed to bankruptcy.

After its setback, Celsius changed its focus from fat-burning to energy and fitness. Fieldly took over as interim CEO in 2017, then took the role on a permanent basis a year later. CELH has been off to the races since then.

CELH's arguably biggest break came in 2018, when 7-Eleven brought Celsius into all of its U.S. convenience stores. It also doesn't hurt to have large investors such as Kimora Lee Simmons (5.7%), ex-wife of record executive Russell Simmons, and Li Ka Shing, one of Hong Kong's wealthiest persons (13.1%).

Celsius's revenues have more than doubled, to $75.2 million, over the past three years. During the first quarter of 2020, sales rocketed 95% higher to $28.2 million; international revenues were up 186%, while U.S. sales climbed 70%. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $2.8 million more than tripled year-over-year.

If you're going to speculate in small-cap growth stocks, CELH offers the kind of growth you want to be a part of.

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Pool - >>> 19 of the Best Stocks You've Never Heard Of


Kiplinger

by Jeff Reeves

6-23-20


https://www.kiplinger.com/slideshow/investing/t052-s001-19-of-the-best-stocks-youve-never-heard-of/index.html


Pool Corp.

Sector: Consumer discretionary
Market value: $10.6 billion
Dividend yield: 0.9%

Even if you've never heard of Pool Corp. (POOL, $265.15), you probably still can guess what this company is peddling.

POOL distributes swimming pool chemicals, equipment and related leisure products. But despite being incredibly specialized, this stock is no small fry. It operates in North America, Europe, South America, and Australia and boasts a market capitalization on par with oil giant Halliburton (HAL) or investment broker E*Trade (ETFC).

Pool Corp. is among the best lesser-known stocks to buy, given the analyst community's rave reviews on it. POOL is among just a handful of stocks to earn the vaunted A+ rating from S&P Capital IQ. And research firm CFRA notes that beyond the obvious benefit of higher sales this summer as coronavirus squashes beach vacations and keeps more folks in their home pools, POOL is one of its favorite defensive plays.

Analysts credit its dominant market share of regular maintenance spending and "a strong balance sheet and liquidity position" to weather any downturn.

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>>> Pool Corporation (POOL) distributes swimming pool supplies, equipment, and related leisure products in North America, Europe, South America, and Australia. The company offers maintenance products, including chemicals, supplies, and pool accessories; repair and replacement parts for pool equipment, such as cleaners, filters, heaters, pumps, and lights; packaged pool kits comprising walls, liners, braces, and coping for in-ground and above-ground pools; pool equipment and components for new pool construction and the remodeling of existing pools; and irrigation and landscape products consisting of irrigation system components, and professional lawn care equipment and supplies. It also provides building materials, such as concrete, plumbing and electrical components, functional and decorative pool surfaces, decking materials, tiles, hardscapes, and natural stones for use in pool installations and remodeling; and commercial products, such as ASME heaters, safety equipment, and commercial pumps and filters. In addition, the company offers discretionary recreational and related outdoor lifestyle products that enhance consumers' use and enjoyment of outdoor living spaces, such as spas, grills, and components for outdoor kitchens. It serves swimming pool remodelers and builders; specialty retailers that sell swimming pool supplies; swimming pool repair and service businesses; irrigation construction and landscape maintenance contractors; golf courses; and commercial customers that serve hotels, universities, and community recreational facilities. As of December 31, 2018, the company operated 364 sales centers. Pool Corporation was founded in 1993 and is headquartered in Covington, Louisiana.

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>>> Doug Baker Positions Ecolab for Post-Pandemic Future


Corporation boosts its cash reserves by $1.25 billion to ride out virus threat and keeps employees on its payroll to serve customers in hopes of emerging strong in recovery.


Twin Cities Business

APRIL 18, 2020

LIZ FEDOR


http://tcbmag.com/news/articles/2020/april/doug-baker-positions-ecolab-for-post-pandemic-future


Ecolab employees are being spared the financial carnage of layoffs, large-scale furloughs and pay cuts that have rolled across many American companies, which CEO Doug Baker contends is the right response to the Covid-19 pandemic.

The St. Paul-based corporation, which employs 24,000 in the United States, makes an array of disinfecting and cleaning products that are in high demand among its global customers. It also has a long history of serving schools, restaurants and hotels, many of which are closed.

“The way we are thinking about the company is we want to manage through this in a way that basically enables us to come through healthy,” Baker says.

“I need my team intact,” Baker says, referring to his global workforce of 50,200 that includes 3,200 based in Minnesota. Baker, who became CEO in 2004, says the company did not immediately start slashing employee jobs to save money in response to the spread of the coronavirus.

At Ecolab, Baker has told employees: “We are living through history, and we want to look back and be proud of how we did it.”

In a wide-ranging interview with Twin Cities Business on Wednesday, Baker acknowledged that he needed to quickly address the economic and health-related fears of his employees.

Consequently, Ecolab’s management crafted a strategy to keep workers on the payroll to serve customers in the short-term, but also to be well-positioned to take advantage of market opportunities after a vaccine is developed.

Because Ecolab is providing job security, Baker says employees can focus on their work that includes aiding customers on the front lines of the pandemic. “We’ve basically said, ‘We are not going to cast you off adrift in this mess,’ ‘’ Baker explains.

Protecting pay and health

Nearly all of Ecolab’s office-based employees are working from home and Ecolab is providing masks and other equipment to increase the safety of employees in its manufacturing plants. The company operates 130 plants globally, including 32 in the United States.

?Baker says the company has extended sick pay and expanded health care benefits for employees, so they will not be harmed by health care costs if they contract Covid-19.

While Ecolab may be best-known for its cleaning products, it’s a huge corporation that reached $14.9 billion in sales in 2019. It offers water, hygiene and energy products and services, and has a large number of sales employees.

Ecolab has traditionally compensated its sales staff through salaries and commissions, including those whose customers include hotels, cruise lines and restaurants. “Their commissions are going to be terrible,” Baker says. In response, Ecolab changed its compensation approach under its “pay protection” policy. “We basically said, ‘We will give you your average pay for the last 12 months pre-Covid, or whatever you earn, whichever is highest,” Baker says. “They can be comfortable that they can continue to pay their bills. [Their customer sales declines] are not their fault.”

Ecolab has stopped making new hires, and Baker says leaders should not expect to be paid bonuses. “Our goal is really to minimize team damage,” he says, which means preserving jobs and pay checks.

To prevent plant employees from contracting the virus, Ecolab has separated production lines to reduce contact among workers and also regulates when they can use common areas, such as lunchrooms and break areas.

In its manufacturing plants, Baker says, “We mask everybody. If everybody is masked, everybody is more protected.”

Cash for worst-case scenario

Baker, in a call with Wall Street analysts in late March, characterized the destruction caused by Covid-19 as the biggest global event since World War II.

To calculate the potential damage to Ecolab’s business, the company ran models for several scenarios—including a base model, one that’s severe and one that’s catastrophic.

The company then moved to safeguard the business by increasing its cash reserves by $1.25 billion. Ecolab raised $750 million by issuing bonds and another $500 million through a bank facility, which has not been drawn upon.

“You need to understand where your business cash flow break points are,” Baker says in the interview. He also wanted to be able to withstand the catastrophic scenario. “We secured more than enough cash to cover that [catastrophic] eventuality,” he says, which he argues has less than a 1 percent probability of occurring.

Citing the economics metaphor about companies “burning the furniture” to stay alive when they run out of cash, Baker says Ecolab is following a path in 2020 that it took during the Great Recession. “We went and made sure we had plenty of cash,” he says. “We were able to manage 2009 more for the long-term than having to do a bunch of disruptive things if we didn’t have a cushion.”

In good times, Baker says, Ecolab often has met the short-term expectations of Wall Street investors as well as made strategic expenditures to support the business for the long haul. 2020 will not be a good year. That’s clear when scanning a chart of Ecolab’s customer markets, which shows that 41 percent of its sales markets are expected to experience declines in demand.

Food and beverage, which comprises 20 percent of Ecolab sales, is a bright spot. Ecolab provides products for food businesses ranging from dairy farms to soft drink bottlers to breweries. “There is a huge demand shift going on everywhere, but it’s particularly acute in the United States from food service to food retailers,” Baker says. “They are also upping hygiene standards with the facilities.” Since the coronavirus pandemic emerged, demand for Ecolab’s hand care and hand sanitizer products has increased by five to 15 times normal sales.

On the “depressed” end of Ecolab’s business, full-service restaurants, lodging, textile care, and cruise lines are among the companies hardest hit by Covid-19 fallout. Full-service restaurants and lodging provide 22 percent of Ecolab sales in a regular year.

In 2020, Baker says, “Our sales, as a consequence of Covid, will net be lower than they would have been otherwise.” But it’s difficult to estimate how much sales will drop. “I’ve told [Wall] Street, I don’t care about my Q2 or Q3 results,” Baker says. “We are going to manage for the long term on this.”

Helping Minnesota acquire PPE

In addition to leading Ecolab during the Covid-19 crisis, Baker has been working with Minnesota Gov. Tim Walz and the Minnesota Business Partnership on joint efforts to battle the virus and its effects.

The Minnesota Business Partnership, which consists of top executives from the state’s largest employers, has been holding twice weekly conference calls to facilitate communication among its members. One of the weekly calls also involves dialogue among the business leaders and members of the Walz administration.

Charlie Weaver, Partnership executive director, enlisted Baker’s help to secure personal protective equipment (PPE) for health care workers and other key employees. Baker said he was drafted by Weaver after the governor’s staff contacted Weaver. “Literally the next day, I met with people on the governor’s staff to hear what the challenges were,” Baker recalls.

He asked Jill Wyant, Ecolab’s executive vice president and president of global regions, to help the administration source PPE. He also wrote a letter to other Partnership companies and asked for their assistance. Baker notes that Mayo Clinic, Donaldson, C.H. Robinson, 3M and Toro are among the Partnership members working with the state of Minnesota on securing personal protective equipment.

Wyant, one of Ecolab’s top five executives, is leveraging her overseas experience in sourcing PPE, which is led at the state level by Administration Commissioner Alice Roberts-Davis.

“The governor has reached out for assistance where they want it and they think the business sector can help,” Baker says. He anticipates another Ecolab employee will soon join a state committee on office social distancing and related issues.

“This isn’t what deals can we do for the business community,” Baker says. “There has been zero of that. It’s basically, how can we help?”

Reopening the economy

Gov. Walz and other governors have come under increasing criticism from people who want more segments of the economy to be reopened for commerce.

“This is a very fair debate,” Baker says. “You do need ultimately to open it.” He’s concluded that it makes sense to allow more activity in phases.

“If you are going to make a mistake, you’d rather open up days late than days early,” Baker notes. “Gov. Walz is science based and he understands. He is struggling with the decisions because they are hard. If he wasn’t struggling, I would be nervous.”

Baker is pragmatic and candid in how he views the balancing act between public health and economic activity. “I don’t think you are going to see a return to normal behavior until, at a minimum, people are confident they’re not going to die, and better yet there’s a vaccine so they’re not going to get sick at all,” he says.

Lacking a major decline in the infection rate and the availability of widespread testing, right now Baker says many states simply have “this big blunt instrument called everybody go home to prevent a spread.”

Within Ecolab, a team of employees is working on criteria for when and how to open some of Ecolab’s offices. “We’ve done hygiene protocol standards and social distancing standards,” he says.

One of the big considerations for Ecolab employees is when and whether schools will be closed during the duration of the pandemic. “If schools continue to be closed, then I don’t think you have any choice but making it optional” to work from home instead of an office, he says.

Rethinking the business

The damage from Covid-19 “is going to be more severe economically” than the Great Recession, Baker says. “This is not going to be a snap back V-shaped recovery.”

Fear of the virus will persist, so Baker says economic sectors that rely on discretionary consumer spending will continue to see challenges.

In some ways, he says, the economic risks are easier to diagnose with Covid-19. During the Great Recession of 2008-2009, Baker was CEO of Ecolab and served on the U.S. Bank board.

“If the financial system imploded, you don’t know how to put Humpty Dumpty back together again,” he recalls. “So I would say the unknowns were even larger then. And then as ’09 went on, the ground shaking slowed and stopped.”

In the current crisis, Baker says, it’s hard to gauge how long the recession will last. He’s focused on what he can control, and he acknowledges that Ecolab is in a much better position than other companies that were forced to close for several weeks.

Based on the coronavirus experience, Baker says, “We are going to have to reshape the business like everybody else, in one way or another. I don’t have enough information about how to reshape it intelligently right now.”

But he’s launched an Ecolab planning approach with four steps—respond, rethink, retool, reignite. The response stage consisted of retaining employees and securing a cash cushion.

Before he gets to the execution or reignite phase, Baker says he will want to narrow the exploration of what questions the company needs to answer and what possible outcomes it should address. He calls his employees his “intellectual idea generators,” and will look to them for conceiving of future strategies.

However, he won’t send the Ecolab employees off to simply think big. “You’ve got to be clear on what you are trying to achieve,” Baker says. “Get a way of communicating to your audience or your team on how to think about it.”

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[tramos520]

September 20, 2019 / Blockchain e-commerce platform - Theodor / $0.0375 Reg. A+ or cheaper for Series A

S.E.C. qualified JOBS Act - Reg. A, exempt offerings, CIK #s 0001579586, and 0001640170 at authorized asking price of $0.0375. Authorized to accept crypto in payment for shares.

Series A - U.S. and Series A - London preferred convertible to common with dilution also available.

Not an offer to sell shares in any U.S. State, except New York.

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>>> Altria and Philip Morris in talks on a merger that would reunite them after more than a decade apart


MarketWatch

By Ciara Linnane

Aug 27, 2019


https://www.marketwatch.com/story/altria-and-philip-morris-in-talks-on-a-merger-that-would-reunite-them-after-more-than-a-decade-apart-2019-08-27


Timing of talks is surprising given the uncertain outlook facing e-cigarette maker Juul, in which Altria owns a 35% stake, analyst says

Philip Morris and Altria own the same portfolio of cigarettes including market leader Marlboro.

Altria Inc.’s stock soared more than 8% Tuesday, while shares of Philip Morris International Inc. fell 11%, after the latter confirmed speculation that the two are in talks on a potential merger of equals that would reunite them after more than 10 years apart.

Altria MO, -2.02% spun off Philip Morris in 2008 to allow it to focus on the international tobacco business, and to let Altria focus on the U.S. market. The two companies hold a portfolio of cigarette and tobacco brands led by Marlboro, which is sold by Altria in the U.S. and by Philip Morris PM, -6.03% overseas.

Both companies have been grappling with declining sales as anti-tobacco health campaigns encourage more people to quit smoking and younger people are drawn to e-cigarettes sold by companies including Juul. Altria acquired a 35% stake in Juul last year for $12.8 billion.

Read now: Altria stock smoked as cigarette shipments drop, Amazon readies for a big ad quarter

Wells Fargo analyst Bonnie Herzog noted unusual trading in both stocks on Monday and said it might have to do with renewed speculation that the two were planning to merge, “a call we first made in December 2016 and we still very much believe will happen.”

Herzog wrote in a note to clients that the reasons a deal is now more likely include that Altria looks more attractive because of its Juul stake, as Juul would make a strong partner for Philip Morris given its dominance of the U.S. e-cigarette and vapor market and its international ambitions. At the same time, Philip Morris’s ownership of iQOS, the electronic device that heats tobacco-filled sticks wrapped in paper to generate a nicotine aerosol, would be worth more to it if it owned Altria, she said.

“Philip Morris will capture the full margin and accelerate the growth of iQOS in the U.S. given its full control over sales and distribution,” Herzog wrote. The company would further have the chance to invest Altria’s strong U.S. free cash flow to promote iQOS sales globally.

“As such, we think there will be tremendous value created if a deal in fact happens,” said the analyst, reiterating outperform ratings from Wells Fargo on both Philip Morris and Altria.

Jefferies analyst Ryan Tomkins said the news seems a bit odd, in that the outlook for Juul is clouded by litigation and investigations by the Food and Drug Administration and a congressional committee over e-cigarette use by teenagers. The company's vape pens are popular with young people, who are especially keen on flavors, including crème brûlée, cucumber and mango, that are now banned from convenience stores and gas stations.

Read now: FDA warns teens against ‘epidemic of addiction’ — amid revelation that Juul representatives visited high schools

Related: Teen vaping is a ‘public health tragedy’ and the FDA has a plan to stop it

The March ban came after an FDA crackdown spearheaded by former commissioner Scott Gottlieb, who threatened to fully ban pod-based vaporizers such as Juul’s if underage vaping were to continue to increase. Gottlieb has described the popularity of the devices as an epidemic, a characterization that has been echoed by the U.S. Surgeon General.

“While this merger makes sense and will create a more valuable company when combined (in our view) we do think it is strange timing given possible risk to Juul in the U.S. with regards to regulatory action,” Tomkins wrote in a note to clients. “Maybe Philip Morris are willing to take this risk as they believe it can easily be offset by the potential international opportunity for Juul under their distribution and the value of fully owning IQOS in the world’s biggest reduced risk market.”

However, just last week a lawsuit brought by a 19-year-old accuses Juul and Philip Morris of illegally marketing their products to minors and deceiving them about the risks of addiction and health hazards. The suit alleges that the companies violated the Racketeer Influenced and Corrupt Organizations Act, known as RICO, that the Justice Department used to sue the tobacco industry in the late 1990s.

Don’t miss: Teens can spend $1,000 a year on vaping — and the crackdown on Juul is making it more expensive

“Mimicking Big Tobacco’s past marketing practices, defendants prey on youth for financial gain,” said the lawsuit, which was filed last week in a Chicago court, as the Los Angeles Times reported.

On Tuesday, North Carolina Attorney General Josh Stein sued eight e-cigarette companies, alleging the companies are “aggressively targeting children” and do not require appropriate age verification in selling their products. The e-cigarette companies facing lawsuits are Bears Vape, Direct eLiquid, Electric Lotus, Electric Tobacconist, Eonsmoke, Juice Man, Tinted Brew and VapeCo. Stein had filed a suit against Juul back in May.

On Friday, public health officials said a patient in Illinois had become the first to die of a lung illness tied to vaping, as the New York Times reported. That news came as hospitals across the U.S. report a growing number of illnesses that appear to be linked to vaping, the paper reported.

See also: CEO of pot producer Cronos talks about Altria deal, weed drinks and the rise of CBD

Philip Morris cautioned that there can be no assurance that any deal will result from the talks. The company said it will not make any further comment regarding the negotiations until it is appropriate to do so.

Philip Morris shares have gained 4.4% in 2019, while Altria has risen 1.8%. The Dow Jones Industrial Average DJIA, -0.26% is up 11% on the year, and the S&P 500 SPX, -0.21% has matched that year-to-date advance.

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>>> Core-Mark Holding Company, Inc. markets fresh and broad-line supply solutions to the convenience retail industry. The company sells and distributes food products, including fast food, candies, snacks, and groceries, as well as beverages and fresh products, such as sandwiches, juices, salads, produce, dairy, and bread; and non-food products comprising cigars, tobacco, alternative nicotine products, health and beauty care products, and general merchandise and equipment. Its customers include traditional convenience stores comprising national and super-regional convenience store operators, as well as independently owned convenience stores. In addition, the company's alternative outlet customers include various store formats, which comprise grocery stores, drug stores, big box or supercenter stores, liquor stores, cigarette and tobacco shops, hotel gift shops, military exchanges, college and corporate campuses, casinos, hardware stores, airport concessions, and other specialty and small format stores that carry convenience products. It provides its products to 43,000 customer locations through a network of 32 distribution centers in the United States and Canada. The company was founded in 1888 and is headquartered in South San Francisco, California.

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>>> Forget marijuana stocks — put your money in booze, nicotine and caffeine instead


By Michael Brush

Oct 4, 2018


https://www.marketwatch.com/story/forget-marijuana-stocks-put-your-money-in-booze-nicotine-and-caffeine-instead-2018-10-04?siteid=yhoof2&yptr=yahoo



Investing in ‘vice’ stocks is a defensive play, and there’s no speculation involved, as is there is with marijuana stocks

The Rat Pack was a big proponent of cigarettes, spirits and coffee.
Investors are tripping over themselves chasing marijuana-related stocks.

The logic of investing in the likes of Tilray TLRY, -1.02% New Age Beverages NBEV, +1.13% Canopy Growth CGC, -0.87% and Cronos Group CRON, -3.91% makes sense, even if the stock prices don’t.


After all, investing early on in a new trend can pay off big. And vice stocks make good investments.

But if you want to invest in vice, I stay stick with the old-school tried-and-true variety. Put your money in booze, nicotine, caffeine and sugar.

Insiders certainly agree with me. Many insiders with great records have been putting their own money into the three vice-related stocks I drill down on below. I just suggested all these names in my stock letter, Brush Up on Stocks, because I think these insiders are on to something.

According to one thoroughly cynical theory in investing, it makes sense to invest in vice stocks because no matter what happens to the economy, people will probably find a way to keep on buying stuff they really enjoy — and may even be addicted to.

At a time when analysts debate whether we are at the end of the cycle, which would suggest the S&P 500 Index SPX, -0.68% and tech-heavy Nasdaq COMP, -1.34% could be topping out, it probably makes sense to move some money to defensive plays. To me, these vice companies are super-defensive plays. Because if the economy gets really bad, people may even use more of their products.

Indeed, insiders at these companies might be buying because they know what’s coming in the economy. Otherwise, their purchases look like plays on bullish company trends.

Of course, whether you want to make money off of other people’s vices and addictions is something you will have to grapple with on your own. That’s a personal choice. But if you are OK with it — maybe because you share libertarians’ respect for the exercise of free will — here are three the insiders like.

I think these three stocks are much safer bets than the marijuana stocks above, marijuana-related funds like ETFMG Alternative Harvest exchange-traded fund MJ, -0.95% and India Globalization Capital IGC, -35.91% or other small- and mid-cap stocks like Aurora Cannabis ACBFF, -0.95% CannTrust Holdings CNTTF, -0.26% Supreme Cannabis Co. SPRWF, +0.00% DAVIDsTEA DTEA, -7.03% and Level Brands LEVB, +12.87%


MGP Ingredients (TICKER:MGPI)

Though millennials are said to favor marijuana over alcohol, booze is not going away. And when millennials do drink, they prefer premium spirits over beer and wine. This helps explain why sales of American whiskeys grew by 8% last year, according to the Distilled Spirits Council. Robust foreign demand is a big source of growth, too.

MGP Ingredients is a play on this trend. The “MGP” here stands for Midwest Grain Products. This Kansas-based company was once owned by Seagrams. The Seagrams name is still emblazoned on some of its buildings.

MGP stock is weak in part because the company saw temporary softness in the first half. It says this was because a few customers delayed or reduced orders since they had overstocked inventory.

That sounds like a typical management excuse. But the insider buying in the weakness supports the plausibility of this explanation. The company insists sales will rebound in the second half as this effect wears off, and as the company attracts new customers. MGP has reaffirmed guidance for the year.

Meanwhile, the company is planning for the future by building up an inventory of aged whiskey. The company sells alcohol for use by other spirits companies. But MGP has its own brands including Remus Repeal Reserve and Rossville Union Rye.

MGP has a strong balance sheet and decent cash flow. The company gets about 61% of its distillery revenue from spirits alcohol and around 26% from alcohol used in industry and food. This mix makes it a defensive play on food sales, too.

Keurig Dr Pepper (TICKER:KDP)

Like a lot of drinks companies, Keurig Dr Pepper is getting hit by higher commodity prices and rising logistical costs. But it’s hanging in there. The stock is not far from 52-week highs. I’ll chock it up to the brand strength here, which supports sales and pricing power. Besides Keurig, popular brands include Dr Pepper, 7UP, Canada Dry and Mott’s.

The Dr Pepper Snapple division posted 5% sales growth in the most recent quarter. A big part of that is coming from price increases. Further price hikes and cost cutting should improve results from here. One problem for Dr Pepper is that about 80% of its sales volume is in soda, which is going out of style. This division needs to develop more drinks beyond soda.

Keurig Green Mountain faces a different problem. Its coffee pods are too expensive. This prevents consumers from buying more of its brew machines. Keurig Green Mountain is solving this problem by walking down pod prices. That’s hitting sales in the near term. But it should pay off in the long term with improved brew-machine sales and market share. This would lead to higher coffee-pod sales on an ongoing basis.

Keurig brewers are in about 20% homes and offices in the U.S. Ongoing price cuts should help move that higher. In the background, margins have been advancing due to improving efficiency in its warehouses and delivery system.

Turning Point Brands (TICKER:TPB)

Turning Point Brands is a tobacco company that sells just about everything in tobacco but cigarettes.

It has three lines of business:

1. “Smokeless tobacco products,” like snuff and chewing tobacco sold under the Stoker’s brand.

2. “Smoking products” like Zig-Zag cigarette papers, cigar wraps, cigars and pipe tobacco.

3. Vaping devices and liquids, in a division it calls “NewGen” products.

Unlike cigarettes, other kinds of tobacco products like these have seen ongoing demand growth for years, at least in the low- to mid-single digit range. This company is doing even better, and it’s not just because of the popularity of vaping.

Sales grew 12.5% in the second quarter due to improvements in both volumes and price in its tobacco products. Some of that growth came from the acquisition of a company called Vapor Supply, which sells under brands such as VaporFi, South Beach Smoke and DirectVapor.

The company has a fair amount of debt. But it has decent cash flow and very strong profitability, as you might expect from a tobacco company.

The “insider” buy here was a $5.3 million purchase by beneficial owner Standard General, an investment shop. In my approach to insider analysis in my stock letter, I discount purchases by investment funds, since most active managers lag behind the markets. But Standard General has a good record here. In fact, Standard General’s most recent purchase happened at $34.60, just before a 25% spike in the stock, probably on news of the Vapor Supply purchase.

Talk about lucky timing!

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[Alexulf]

HEMP on MAJOR GROCERY CHAIN - Sales go very good at the HUNDREDS of stores around the country. Take a look at it;
https://www.facebook.com/queenslandbauxitelimited/

This will mean major Revenues to QBL as the largest shareholder in there subsidiary. Things are looking very Bright

[Alexulf]

VITAHEMP has released its "Black Label" Premium range of Hemp Seed Oil soft gel capsules.
120CAPS x 750mg. Hemp Seed Oil Capsules are a wonderful plant-based alternative to conventional fish oil. Each soft gel capsule contains a rich source of EFA's (Omega 6 and 3) in a 3:1 ratio and Gamma Linolenic Acid.
If you are taking Fish Oil capsules consider this plant-based alternative. No fishy aftertaste! :) (y)
https://www.facebook.com/vitahemp/
https://vitahemp.com/product/hemp-seed-oil-capsules/


With a great distribution network, they have managed to get a major window to the public for there Products. They also sell on-line threw there e-shop on the website.


8 Products so far and more on the way - hemp will be big !

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>>> Crown Crafts, Inc. operates indirectly through its subsidiaries, Crown Crafts Infant Products, Inc., Hamco, Inc. and Carousel Designs, LLC, in the infant and toddler products segment within the consumer products industry. The Company operates though the segment of infant and toddler products. These products consist of infant and toddler bedding, bibs, soft bath products, disposable products and accessories. Its focus is on infant, toddler and juvenile products, including crib; blankets and swaddle blankets; nursery and toddler accessories; room decor; reusable and disposable bibs; hooded bath towels and washcloths; reusable and disposable placemats and floor mats; disposable cup labels, toilet seat covers and changing mats, and other infant, toddler and juvenile soft goods. Sales of its products are made directly to retailers, which are mass merchants, juvenile specialty stores, value channel stores, grocery and drug stores, restaurants, Internet accounts and wholesale clubs. <<<

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>>> Philip Morris hopes smokeless is the new smoking


By Saabira Chaudhuri

Nov 6, 2017


https://www.marketwatch.com/story/philip-morris-hopes-smokeless-is-the-new-smoking-2017-11-06?siteid=bigcharts&dist=bigcharts



‘Heat not burn’ products have become an obsession for the company’s CEO


Bloomberg


Philip Morris International is hoping smokers will prefer IQOS, which heats tobacco, instead of existing e-cigarette options that heat a nicotine-laced liquid but contain no tobacco.

Cigarette maker Philip Morris International Inc. PM, +0.55% is betting big on smokeless products with a device called IQOS that heats but doesn’t burn tobacco.

The number of cigarettes big companies sell is declining and, with regulations continuing to tighten, the companies are focused on future-proofing their business, investing in e-cigarettes and “heat not burn” products that they say are less harmful than traditional cigarettes. Philip Morris has joined with Altria Group Inc. MO, +0.79% to apply for Food and Drug Administration approval to market IQOS in the U.S. as a less risky alternative to cigarettes.

Philip Morris, spun off from Altria in 2008, sells cigarettes only outside the U.S.; Altria sells cigarettes only in the U.S. If Philip Morris’s IQOS wins FDA approval, it will be sold in the U.S. by Altria in a licensing agreement with Philip Morris, which will receive royalties from U.S. sales.

Making IQOS—pronounced eye-koss—a success has become an obsession for the company’s chief executive, André Calantzopoulos.

A tobacco industry lifer and former smoker, Calantzopoulos is a walking advertisement for his new product, puffing away on the cigarette-shaped device through the day. He’s counting on lower taxes and looser marketing restrictions than those levied on traditional cigarettes to push smokers to switch to these new, higher-margin products.

He’s also betting many smokers will prefer IQOS, which heats tobacco, to existing e-cigarette options that heat a nicotine-laced liquid but contain no tobacco, making for an experience that’s less like traditional smoking.

Philip Morris has poured money into clinical trials that have shown IQOS is safer than smoking. The company maintains that combustion, rather than the tobacco or nicotine in cigarettes, is what’s harmful. Critics say more long-term studies and independent research are needed to evaluate IQOS’s health effects.

The company in January relaunched its website, stripping away prominent mentions of big moneymakers like Marlboro and Benson & Hedges cigarettes and touting its decision to “develop, market, and sell smoke-free alternatives, and switch our adult smokers to these alternatives, as quickly as possible around the world.” In September, Philip Morris pledged $1 billion to create a foundation to encourage people to switch to smoke-free alternatives.


Critics note the company is still aggressively selling traditional cigarettes while challenging display bans and rules in some places that require plain packaging with graphic health warnings.

“I don’t see any sign at all they’re backing off the very aggressive effort to sell as many traditional Marlboros to as many people as they can,” says Matthew Myers, head of the Campaign for Tobacco-Free Kids.

In an interview with The Wall Street Journal, Calantzopoulos discussed how Philip Morris sees the future of smoking and why he thinks IQOS is the key to the company’s success. Edited excerpts follow.

Filling a gap

WSJ: With e-cigarettes already available in so many markets, why do we need IQOS?

Calantzopoulos: The problem we had with electronic cigarettes since the beginning of development was the satisfaction of the smoker. Because the taste is dramatically different and, at the initial stages, the nicotine pharmacokinetics were very slow. You could not get the satisfaction. It’s not so easy to crack this code.

The taste satisfaction is very important. The closest you are to this, the more chances you have to switch people. It’s very nice to have a zero-risk product, but if nobody uses it, you don’t have any reduction in public health risk.

Which markets are likely to be the biggest ones for these new, alternative products?

Calantzopoulos: When you look at the potential of these products you need to understand what is the readiness of smokers to switch. That relates to public-health concerns, social pressure, concern for people around you and many other more subtle things. You cannot say that Indonesia is at the same level of readiness as the U.K, Western Europe or the U.S.

The potential is in every market, because eventually I think people will switch to these products as they become available. There are two unmet needs in smokers: something that is much better for my health and something that bothers others much less or doesn’t bother them. These are things cigarettes can’t resolve. These new products are developed to address these needs.

What’s more profitable for you, IQOS or traditional cigarettes?

Calantzopoulos: Today it’s IQOS because of the lower taxes.

You say you don’t want to encourage new cigarette smokers. If that’s true, will you have a business in 40 years? What’s the long-term plan?

Calantzopoulos: First, I don’t think it’s 40 years we’re talking about here. It’s much longer. Second, we only have, if you include China, a 15.4% share of the world [cigarette market outside the U.S.] With [alternatives to traditional cigarettes] we have seen we can grow our market share even if the market reduces. Plus we’ve started introducing accessories for the product.

At over $100 for the starter kit, IQOS isn’t cheap. Can you explain your pricing strategy?

Calantzopoulos: Innovation, in the minds of people, cannot be something extremely cheap. If you are an average person and you hear that something that is much better than cigarettes comes to the market at the cheapest possible price, you’ll not trust it. This is the reason we didn’t initially manufacture in China, because you need to create that credibility.

Over time you need to make the products available and affordable to different categories of people.

The big shift

You redesigned your website recently to describe yourself as “committed to a smoke-free future” even though most of your business is still in traditional cigarettes. Why?

Calantzopoulos: We developed the website because we needed to make clear to our own stakeholders and employees here that this is the direction of the company.

This is not an easy thing, because we are entering into a territory that is very unknown. It’s not your traditional competitors.

Our industry has been a fairly linear and predictable industry. You know what’s going to happen every year. You know from time to time you are going to have a tax increase, you are going to have regulatory restriction, but, as it applies to everybody, I think we are doing very well.

But now you move to a model that from linear can become exponential for a period of time. It’s much more technology-driven, much more digital-driven. Competitors other than our traditional competitors can come in, whether legitimate or fly-by-night ones, and you have to anticipate all those things. We are the first ones to be in the category, so we anticipated quite a lot. We are learning every day. The whole organization has to gear up to this new reality and these new competitive rules around it.

There are still many regions of the world where you’re actively trying to grow revenues in your traditional cigarette business. How do you reconcile those actions with your mission statement of switching adult smokers to alternatives as quickly as possible?

Calantzopoulos: Shifting the company to these products doesn’t mean that I will give market share to my competitors free of charge. In the markets where we are not present with IQOS yet or the other reduced-risk products, you still need to defend your share of the market.

They still represent the bulk of our income, and so far they have financed the billions of dollars we have put behind these new products. But once we go national in a market, and absent capacity constraints, then you shift your resources and your focus to these new products.

But isn’t there an inherent contradiction here? Your new efforts are being funded by your traditional cigarette business, so it’s important that you keep that going.

Calantzopoulos: Take a market like Indonesia as an example. If I just take my foot off the pedal completely, nothing is going to happen to the total market except that I lose share.

The logic says you don’t do this until you go with IQOS.

We are focusing the organization much more on the new business. We will have very few new traditional product introductions, and as markets switch to IQOS we would remove resources [from the old business] completely.

Next year IQOS becomes profitable, so even the financing from these traditional businesses isn’t necessary anymore, because it becomes fully self-sustaining.


What should the regulatory environment look like for cigarettes and these new products?

Calantzopoulos: It’s pretty clear that we will need measures to accelerate the conversion to new products. Governments can either make measures even worse for cigarettes or do something different on these [new] products to show consumers they are different. I think they should do both.

I think over time the fiscal environment on cigarettes will become different, and the regulatory environment has to differentiate the products. If that is at the expense of cigarettes, so be it—it’s not a problem for me. But we need some logical forum where we don’t talk ideology but rather we talk about what can really accelerate the conversion. If you do display bans everywhere in the world on cigarettes but you can display IQOS, that’s a differentiating measure for me. Then I’m more than willing to accept these measures because they are really conducive to make people switch.

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>>> Orchids wins big contract


Higher-end work will put new client among tissue maker’s top five


by Geert De Lombaerde

09-01-17


http://www.nashvillepost.com/business/area-stocks/article/20974369/orchids-wins-big-contract


Executives with Orchids Paper Products say they have landed a big new customer that will help their new South Carolina plant ramp up operations.

In a filing with regulators, Orchids leaders don’t identify their new client, which is in a new distribution channel and has asked Orchids to make ultra-premium products starting late this year. But they expect that, once fully up and running next spring, the relationship will be one of their five largest and will — combined with some other recently won business — push Orchids’ revenue run rate to between $220 million and $240 million. Last year, the company’s sales totaled $164 million, with Dollar General and Family Dollar accounting for more than half of that number.

“We are extremely pleased to have qualified ultra-premium products on our new tissue machine,” President and CEO Jeff Schoen said in a statement. “We are also pleased to have added a new customer in a new distribution channel that we believe will help Orchids diversify its business and will move Orchids rapidly toward meeting its long-term goals.”

Brentwood-based Orchids spent $150 million on its new factory in Barnwell, South Carolina, and started operations there earlier this year. Through the first six months of this year, the company posted a net loss of $2.9 million on sales of nearly $74 million.

Shares of Orchids (Ticker: TIS) rose more than 3 percent Thursday to $10.20. They are, however, still down nearly 30 percent over the past three months. <<<

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Philip Morris - >>> 10 Dividend Growth Stocks That Simply Print Money


http://www.kiplinger.com/slideshow/investing/T018-S015-10-dividend-growth-stocks-that-simply-print-money/index.html?rid=SYN-yahoo&rpageid=16086



Philip Morris International



Symbol: PM

Dividend yield: 4.6%

FCF margin: 25.8%

5-year annual dividend growth: 8%



Philip Morris International Inc. holds all the international rights to sell dominant cigarette brands such as Marlboro, and this gives it a wide moat with plenty of pricing power to offset the gradual declines in cigarette volumes over time.

In fact, in the past year, PM was able to increase the price of its products by a very impressive 5%, resulting in constant currency EPS growth of 18%.

Better yet, Philip Morris is finding great success in its smokeless tobacco product, iQOS, in which tobacco is heated but not burned. That should provide PM with solid continued long-term growth potential as global consumers migrate away from cigarettes and towards electronic alternatives.

And with massive economies of scale, and ongoing cost cutting efforts Philip Morris International should be able to maintain its exceptional margins, including operating margins in the low to mid-40% range.

Combined with a low-capital-intensive business model, PM generates exceptional FCF per share that makes the current generous dividend not just highly secure, but likely to keep growing steadily in the years to come.

Philip Morris’ high yield makes it a favorite holding for investors living off dividends in retirement.

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Church & Dwight - >>> 6 Stocks With Growing Yield and Strong Returns



GuruFocus.com

October 10, 2016



http://finance.yahoo.com/news/6-stocks-growing-yield-strong-211748598.html



- By Tiziano Frateschi


Using the GuruFocus All-In-One Screener, I want to highlight stocks that have a 5-year growing dividend yield with strong profitability and a long-term track of solid returns and growing asset value.


Church & Dwight Co. Inc.(CHD) has a dividend yield that has grown by 31.80% over the last five years. The yield is now 1.49% with a payout ratio of 40%. The company has a 10-year asset growth rate of 8%, supported by a current return on assets (ROA) of 10.66% that, during the last 10 years, has had a median value of 9.19%.

The GuruFocus profitability and growth rank of 9/10 is confirmed by a current return on equity (ROE) of 22.76% that has been strong over the last 10 years, with an average ratio of 17.23%. ROE and ROA are outperforming the industry median and are ranked higher than 84% of competitors. Financial strength is ranked 6/10 and shows a cash to debt ratio of 0.20 that is underperforming 72% of its competitors and an equity to asset ratio of 0.47 that is below the industry median of 0.52.

Church & Dwight develops, manufactures and markets household, personal care and specialty products. The Company has eight power brands, Arm & Hammer, Trojan, Oxiclean, Spinbrush, First Response, Nair, Orajel and Xtra.

The largest investors in the company among the gurus are Ron Baron (Trades, Portfolio) with 1.42% of outstanding shares, followed by Jeremy Grantham (Trades, Portfolio) with 0.36%, Mario Gabelli (Trades, Portfolio) with 0.16%, Joel Greenblatt (Trades, Portfolio) with 0.1%, Pioneer Investments (Trades, Portfolio) with 0.1% and Paul Tudor Jones (Trades, Portfolio) with 0.03%.

CVS Health Corp. (CVS) has a dividend yield that has grown by 31.60% over the past five years. The yield is now 1.88% with a payout ratio of 36%. The company has a 10-year's asset growth rate of 15%, supported by a current ROA of 5.40% that, during the last 10 years, has had a median value of 6.14%.

The GuruFocus profitability and growth rank of 8/10 is confirmed by a current ROE of 13.18% that over the last 10 years has an average ratio of 11.33%. ROE and ROA are outperforming the industry median and are ranked higher than 60% of their competitors. Financial strength has a rating of 6/10. Its cash to debt ratio of 0.04 is underperforming 100% of its competitors and its equity to asset ratio of 0.38 is barely above the industry median of 0.34.

CVS is an integrated pharmacy health care provider. The company has three segments: Pharmacy Services, Retail Pharmacy and Corporate.

Pioneer Investments (Trades, Portfolio), who holds 0.54% of outstanding shares, is the main investor of the company among the gurus, followed by Jim Simons (Trades, Portfolio) with 0.36%, PRIMECAP Management (Trades, Portfolio) with 0.33%, Jeremy Grantham (Trades, Portfolio) with 0.17% and Mario Gabelli (Trades, Portfolio) with 0.11%.


Allied World Assurance Co. Holdings AG (AWH) has a dividend yield that has grown by 29.40% over the past five years. The yield is now 2.38% with a payout ratio of 52%. The company has a 10-year's asset growth rate of 7%, supported by a current ROA of 1.31% that has had a median value of 4.14% over the last 10 years.

The GuruFocus profitability and growth rank of 7/10 is confirmed by a current ROE of 4.98% that over the last 10 years, had an average ratio of 14.34%. ROE and ROA are underperforming the industry median and are ranked lower than 74% of their competitors. Financial strength has a ratio of 7/10 and shows a cash to debt ratio of 0.44 that is underperforming 77% of its competitors and an equity to asset ratio of 0.26.

Allied World Assurance is a Swiss-based insurance and reinsurance holding company whose subsidiaries underwrite a diverse portfolio of property and casualty lines of business.

The main investors of the company among the gurus are Columbia Wanger (Trades, Portfolio) with 1.08% of outstanding shares, followed by Jim Simons (Trades, Portfolio) with 0.44%, Keeley Asset Management Corp (Trades, Portfolio) with 0.31% and Chuck Royce (Trades, Portfolio) with 0.21%.


Packaging Corp. of America (PKG) has a dividend yield that has grown by 29.30% over the last five years. The yield is now 2.83% with a payout ratio of 47%. The company has a 10-year asset growth rate of 13%, supported by a current ROA of 8.48% that, during the last 10 years, has had a median value of 7.87%.

The GuruFocus' profitability and growth rating of 9/10 is confirmed by a current ROE of 27.59%, which has been steady over the last 10 years with an average ratio of 22.48%. ROE and ROA are outperforming the industry median and are ranked higher than 80% of their competitors. Financial strength has a rating of 6/10, it shows a cash to debt ratio of 0.09 that is underperforming 82% of its competitors and an equity to asset ratio of 0.31 that is below the industry median of 0.51.

Packaging Corp. of America is a producer of container board and corrugated products in the United States. The company also produces multi-color boxes and displays, as well as meat boxes and wax-coated boxes for the agricultural industry.

First Eagle Investment (Trades, Portfolio) holds 1.33% of outstanding shares and is the main investor in the company among the gurus, followed by HOTCHKIS & WILEY with 0.93%, Joel Greenblatt (Trades, Portfolio) with 0.54%, Robert Olstein (Trades, Portfolio) with 0.11%, Pioneer Investments (Trades, Portfolio) with 0.09%, Ray Dalio (Trades, Portfolio) with 0.01% and Paul Tudor Jones (Trades, Portfolio) with 0.01%.


NewMarket Corp. (NEU) has a dividend yield that has grown by 28.60% over the last five years. The yield is now 1.59% with a payout ratio of 31%. The company has a 10-year asset growth rate of 7%, supported by a current ROA of 18.50% that, during the last 10 years, has had a median value of 17.95%.

The Gurufocus' profitability ratio of 9/10 is even confirmed by a current return on equity of 58.10% that is strong since the last 10 years, with an average ratio of 41.53%. ROE and ROA are outperforming the industry median, with a ratio that is ranked higher than 94% of their competitors. Financial strength has a ratio of 6/10 and it shows a cash to debt ratio of 0.30 that is under performing 30% of its competitors and an equity to asset ratio of 0.32 that is below industry median of 0.54.

NewMarket Corp. manufactures and sells petroleum additives used in lubricating oils and fuels to enhance their performance in machinery, vehicles and other equipment. The petroleum additives market has two products: lubricant additives and fuel additives.

The main investors among the gurus are Jim Simons (Trades, Portfolio) with 0.42% of outstanding shares, followed by Mario Gabelli (Trades, Portfolio) with 0.14% and Murray Stahl (Trades, Portfolio) with 0.01%.


Equifax Inc. (EFX) has a dividend yield that has grown by 28% over the last five years. The yield is now 0.98% with a payout ratio of 32%. The company has a 10-year asset growth rate of 9%, supported by a current ROA of 8.57% that, during the last 10 years, has had a median value of 7.88%.

The GuruFocus profitability and growth ranking of 8/10 is confirmed by a current ROE of 19.72% that over the last 10 years had an average ratio of 16.48%. ROE and ROA are outperforming the industry median and are ranked higher than 79% of their competitors. Financial strength has a rating of 5/10 and shows a cash to debt ratio of 0.03 that is underperforming 97% of its competitors and an equity to asset ratio of 0.38 that is below the industry median of 0.49.

Equifax Inc. provides information solutions and human resources business process outsourcing services for businesses and consumers.

Ken Fisher (Trades, Portfolio) holds 0.16% of outstanding shares and is the largest investor among the gurus followed by Jeremy Grantham (Trades, Portfolio) with 0.14% and Meridian Funds (Trades, Portfolio) with 0.14%

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Reynolds American - >>> These 3 Companies Could Be Bought in 2017



There's buyout buzz around Reynolds American, GNC, and Michael Kors



Leo Sun

Jan 8, 2017




http://www.fool.com/investing/2017/01/08/these-3-companies-could-be-bought-in-2017.aspx?source=yahoo-2-news&utm_campaign=article&utm_medium=feed&utm_source=yahoo-2-news



The stock market's upside potential might seem limited as the major indexes hover near historic highs, but a few stocks could still rise this year on big takeovers. Let's examine three companies that might be acquired soon -

Reynolds American

Reynolds American, the second-largest domestic tobacco maker after Altria, rallied over 20% last year as low fuel prices apparently boosted cigarette sales as people had more money to spend and its acquisition of Lorillard boosted its top-line growth. Reynolds was well-insulated from the strong dollar because it generates most of its revenue domestically, and many investors bought the stock as a dependable dividend play in a low-interest rate environment.

With interest rates set to rise, Reynolds might seem vulnerable as bonds become more attractive income plays. However, Reynolds' trailing price-to-earnings ratio of 15 is much lower than Altria's P/E of 25 and the industry average of 21. Its Newport menthol brand, Vuse e-cigarettes, and "additive-free" Natural American Spirit brand are also the dominant players in their respective markets.

Those qualities make Reynolds an attractive takeover target for bigger tobacco makers. British American Tobacco (NYSEMKT:BTI), which already owns 42% of Reynolds, offered to acquire the rest of the company for $56.50 per share last October. Reynolds rejected the initial offer, fueling speculation that higher bids could follow. That buyout interest, along with Reynolds' ability to keep cutting costs and raising prices to offset weaker shipments, should help it outperform its industry peers this year.

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>>> Orchids Paper Products Company manufactures and sells tissue products for at-home and away from home markets in the United States. Its products include paper towels, bathroom tissues, and paper napkins. The company offers its products under Colortex, My Size, Velvet, Big Mopper, Linen Soft, Soft & Fluffy, and Tackle brands; and licensed brands, such as Virtue, Truly Green, Golden Gate Paper, and Big Quality. It also sells parent rolls to other converters. The company serves discount retailers, grocery stores, grocery wholesalers and cooperatives, convenience stores, janitorial supply stores, and stores in the food service market. Orchids Paper Products Company was founded in 1976 and is headquartered in Pryor, Oklahoma. <<<

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>>> Orchids Paper Products Company manufactures and sells tissue products for at-home and away from home markets in the United States. Its products include paper towels, bathroom tissues, and paper napkins. The company offers its products under Colortex, My Size, Velvet, Big Mopper, Linen Soft, Soft & Fluffy, and Tackle brands; and licensed brands, such as Virtue, Truly Green, Golden Gate Paper, and Big Quality. It also sells parent rolls to other converters. The company serves discount retailers, grocery stores, grocery wholesalers and cooperatives, convenience stores, janitorial supply stores, and stores in the food service market. Orchids Paper Products Company was founded in 1976 and is headquartered in Pryor, Oklahoma. <<<

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>>> The Clorox Company manufactures and markets consumer and professional products worldwide. The company operates in four segments: Cleaning, Household, Lifestyle, and International. It offers laundry products, including bleach products under the Clorox brand, and stain fighter and color booster products under the Clorox 2 brand; home-care products primarily under the Clorox, Formula 409, Liquid-Plumr, Pine-Sol, S.O.S, and Tilex brands; naturally derived home care products under the Green Works brand; and cleaning and disinfecting products under the Clorox, Dispatch, Aplicare, HealthLink, and Clorox Healthcare brands. The company also offers plastic bags, wraps, and containers under the Glad brand; cat litter products under the Fresh Step, Scoop Away, and Ever Clean brands; and charcoal products under the Kingsford and Match Light brands. In addition, the company provides dressings and sauces primarily under the Hidden Valley, KC Masterpiece, and Soy Vay brands; water-filtration systems and filters under the Brita brand; and natural personal care products under the Burt?s Bees brand. The company markets its products primarily under the Javex, Glad, PinoLuz, Ayudin, Limpido, Clorinda, Poett, Mistolin, Lestoil, Bon Bril, Nevex, Agua Jane, and Chux brands. The company sells its products primarily through mass retail outlets, e-commerce channels, distributors, and medical supply providers. The Clorox Company was founded in 1913 and is headquartered in Oakland, California. <<<

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>>> Ecolab Inc. provides water, hygiene, and energy technologies and services for customers worldwide. The company operates in four segments: Global Industrial, Global Institutional, Global Energy, and Other. The Global Industrial segment provides water treatment and process applications, and cleaning and sanitizing solutions primarily to large industrial customers within the manufacturing, food and beverage processing, chemical, mining and primary metals, power generation, pulp and paper, and commercial laundry industries. The Global Institutional segment offers specialized cleaning and sanitizing products to the foodservice, hospitality, lodging, healthcare, government and education, and retail industries. The Global Energy segment provides the process chemicals and water treatment needs of the petroleum and petrochemical industries in both upstream and downstream applications. The Other segment offers pest elimination, and kitchen repair and maintenance services. The company sells its products through company-employed field sales personnel, healthcare distributors, and dealers. Ecolab Inc. was founded in 1923 and is headquartered in St. Paul, Minnesota. Ecolab Inc. operates as a subsidiary of Athlon Solutions, LLC <<<

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Church & Dwight, Colgate Palmolive, Reynolds American -



>>> 3 Consumer Staple Stocks That Aren’t So Safe



Ben Kramer-Miller

June 20, 2014



http://wallstcheatsheet.com/business/3-consumer-staple-stocks-that-arent-so-safe.html/?a=viewall




Investors looking for safety and consistency often look towards consumer staple companies. These companies generally don’t grow rapidly, but they generate consistent returns that compound over long periods of time. Thus they are often recommended to risk-averse investors and to retirees or those who are approaching retirement. From a traders perspective, these stocks outperform when the market turns down and we see a rotation out of economically sensitive stocks into recession resistant stocks, which often include consumer staple stocks.

What investors seem to forget is that just because these investments generate stable returns doesn’t mean that the can be bought at any valuation. The fact that bond yields are so low and the lack of high yielding assets in the market place has sent investors pouring into several of these names, especially if they demonstrate even the slightest hint of growth. But while these stocks are cheaper than bonds, that hardly makes them cheap. In fact some well-known names trade at lofty valuations. This eliminates the safety factor, and you are probably better off buying some inexpensive economically sensitive stocks than you are buying these from the standpoint of a risk averse investor. Thus the stocks I list below are risky despite the fact that they have relatively consistent earnings and pay stable dividends.


1. Colgate Palmolive (NYSE:CL)

Colgate Palmolive is currently trading at an all-time high. It also trades at an incredible 30-times earnings despite the fact that earnings growth has been rather minimal over the past couple of years. Investors seem to be hunting for reasons to justify owning this stock when they simply aren’t there. For instance the lack of earnings growth is explained away by arguing that the company is growing earnings if you correct for weakness in foreign currencies. The high valuation is justified by arguing that the company has an earnings yield (i.e. the inverse of a price to earnings multiple) that exceeds Treasury Bonds.

Finally, investors like to point to the earnings number if we exclude one-time expenses. But a quick glance at the company’s income statement reveals that these one-time items occur with such regularity that ignoring them makes no sense. Ultimately Colgate is a solid company that has generated value for long-term shareholders, but that doesn’t mean that it is a good investment at $69/share and 30-times earnings on virtually no growth.


2. Church and Dwight (NYSE:CHD)

As a smaller consumer staple company Church and Dwight has had more room to grow over the years, and it has done just that. It has been a phenomenal investment that bucked the trend in the stock market over the past fifteen years or so. However, more recently the company hasn’t been growing. Last quarter its sales were flat and its earnings were down. This points to deceleration in growth as well as margin compression, and this doesn’t bode well for the company. Nevertheless the stock hit an all-tie high on Thursday and it trades at just over 25 times earnings.

While a 4 percent earnings yield looks pretty good compared with Treasuries, or even when compared with investment grade corporate bonds, the fact remains that the company’s earnings are vulnerable to the downside. Furthermore, this valuation will not appear so compelling if bond prices fall. Consequently investors need to consider taking profits in this name. It has had a great run, and it seems that everybody is bullish, making now a great time to sell.


3. Reynolds American (NYSE:RAI)

It was just a few years ago when tobacco companies such as Reynolds American traded at a steep discount to other consumer staples companies considering that investors feared anti-smoking legislation. But the managements of these firms have solved this problem. They have grown revenues by raising prices, and they have manufactured growth through aggressive stock repurchase programs. The latest stunt, which has yet to be implemented, is the potential merger between Reynolds American and Lorillard (LO), which is expected to add substantial cost savings to the industry.

However, the fact is that these measures can only go so far in generating value for shareholders. What these companies need is for more Americans to smoke and to use tobacco products. While e-cigarettes have added some interest amongst consumers, we generally see a decline in smoking, and as a result these companies should be trading at lower valuations than companies such as the two mentioned above. Reynolds American trades at 22 times earnings despite decelerating growth and margin compression. While the merger with Lorillard—assuming it goes through—will shave this number down, the issue remains that these companies have exhausted every growth prospect. Therefore this company deserves to trade a much lower multiple, and I suspect that investors will realize this soon.

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>>> Church & Dwight: Methodically Expanding Across the World



By Philip Saglimbeni

April 12, 2014



http://www.fool.com/investing/general/2014/04/12/church-dwight-methodically-expanding-across-the-wo.aspx



Relatively small consumer-goods company Church & Dwight (NYSE: CHD ) is in a great position currently. The company's strong brands like Arm & Hammer, OxiClean, and Trojan have become household names over the years and their popularity is only increasing.


However, as successful as Church & Dwight management has been at building brand strength and awareness, the company is still primarily focused on domestic markets. In recent years, though, the company has been expanding its global footprint, and this is projected to continue going forward.

With so much room for international expansion, Church & Dwight remains a more interesting long-term growth prospect than larger industry competitors including Procter & Gamble (NYSE: PG ) .



Growing global footprint

At the company's investor conference in February, management gave 10 reasons why Church & Dwight will continue to lead peers in total shareholder returns going forward. One of the reasons was the company's commitment to increase its global exposure.

The company is already well on its way to doing this. In 2013, approximately 17% of Church & Dwight's total geographic mix was international. While not hugely significant, it is impressive considering that in 2001 only 2% of the company's mix was international. The Unites States has gone from being 98% of Church & Dwight's total business in 2001 to 83% in 2013.

The best part is that much of this progress has been accomplished under the leadership of Church & Dwight's Executive Chairman and CEO James Craigie, who started as chief executive in 2004.

Craigie remains enthusiastic about the company's international potential and stressed the methodical approach to growth. In the most recent earnings call, he emphasized the company's strategy of isolating its six most lucrative overseas opportunities as well as the strong track record of success the company has had in the past in the areas. He stated, "We've had great results across those franchises with mid- to high-single-digit growth in most of them. Great track record".


Management's approach to focus primarily on six major countries outside of the United States, including Canada, the UK, France, Australia, Mexico, and Brazil in descending order by market size, means the company can concentrate resources on its most lucrative global markets going forward. The way management plans to do this is by building both international and corporate power brands abroad, leveraging what it calls "one company" strengths and making strategic acquisitions like that of Batiste shampoo in the
UK.

When compared to industry juggernaut Procter & Gamble, which has a presence in more than 18 countries around the world, Church & Dwight's global presence is still relatively small.

In Procter & Gamble's latest earnings call, CFO Jon Moeller summed it up perfectly:


"At $33 billion in sales, believe it or not, we now have the largest household and personal-care business in developing markets. And we have the leading household and personal-care business in Asia, in Central and Eastern Europe, [the] Middle East and Africa, and in Latin-America; the strong foundation on which to grow in the years and decades ahead".

While Procter & Gamble's global positioning is impressive, it also means there is far less growth potential in international markets going forward. Not surprisingly, Church & Dwight is expected to grow at faster rates than its larger competitor in 2014 and 2015. The following is a breakdown of both companies' projected growth for the next two years:


Company

Revenue Growth 2014

EPS Growth 2014

Revenue Growth 2015

EPS Growth 2015


Church & Dwight 3.2% 9% 3.7% 10.5%
Procter & Gamble 1.1% 4.2% 3.2% 8.3%



Bottom line
Church & Dwight is in an enviable position right now. The company has built incredible brand strength and remains committed not only to defending market share but also increasing it. With a large portion of the world still untapped, Church & Dwight's global growth potential is unmatched in the industry. Accordingly, the company remains one of the most interesting growth stories in the consumer- goods space.

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>>> Church & Dwight to Sponsor MLB



By Zacks Equity Research

March 27, 2014



http://finance.yahoo.com/news/church-dwight-sponsor-mlb-204257170.html



Church & Dwight Co. Inc. (CHD) and Major League Baseball Properties (“MLBP”) announced the penning of a multi-category and multi-year sponsorship agreement yesterday.

As per the agreement, Church and Dwight’s brands, namely ARM & HAMMER and OxiClean will serve as "The Official Laundry Detergent and Stain Remover of MLB," making it CHD’s biggest sponsorship contract. Also, for MLBP, across various categories like pet, fabric and oral care, this deal is the first of its kind.

This collaboration is set to bring together two American icons and appeal to families in a different way.

This multi-year deal entails the use of MLB logos, team relations and official sponsorship status. Further, throughout the regular season, families will be directly associated on-site at MLB’s signature events like World Series and the All Star Game and also at select MLB ballparks.

The Minnesota Twins, New York Yankees and Cincinnati Reds will be team partners for Church and Dwight, whose activation will be backed by retail display opportunities, national advertising campaigns, all designed as per MLB themes. Apart from this, Church and Dwight will offer licensed Oral Care products.

Additionally, the company will extend the collaboration with MLB’s “Breaking Barriers” program. Under the program, the company will make a donation of $1,50,000 every year, from 2014-2016. Through an essay writing contest, Breaking Barriers will identify students belonging to standards 4 – 9 who display remarkable perseverance in battling hurdles in their lives. The program has already reached over 22 million children and 2.9 million tutors in the U.S., Puerto Rico and Canada.

According to the Executive Vice President, Business, Major League Baseball, Church & Dwight possesses strong brands which are leaders in their respective industries and enjoy popularity among the families filling the MLB ballparks every year. Currently, Church & Dwight, which competes with The Clorox Company (CLX), Colgate-Palmolive Co. (CL) and Procter & Gamble Company (PG), carries a Zacks Rank #3 (Hold).

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Proctor & Gamble -- >>> P&G Widens Product Portfolio



By Zacks Equity Research



http://finance.yahoo.com/news/p-g-widens-product-portfolio-203519072.html




The Procter & Gamble Company (PG) is known for its impressive product development and marketing. In order to maintain its brand appeal, the company focuses on innovation and expansion of its product portfolio. The company believes that consistent product innovation, supported by strong marketing and commercialization, will deliver strong results over the long term.

Procter & Gamble currently competes in a total of 37 product categories. Tide detergent is one of the 25 billion-dollar grooming brands of Procter & Gamble.

The branded consumer products company recently introduced a new Tide Oxi multi-purpose stain remover. The launch of the new multipurpose cleaning product coincides with the spring cleaning season when most Americans deep clean their homes. Tide Oxi multi-purpose stain remover is now available across the U.S at a suggested retail price of $12.99 for a 7.5 lb tub.

This new cleaning product has been designed for cleaning outside the laundry room. There is a growing demand for products that make cleaning efficient and effortless.

Oxi Multi-Purpose Stain Remover uses peracid, a stronger form of bleach to remove stubborn stains. However, peracid is a color-safe bleach and therefore is ideal for cleaning clothes as well as rough stains found in bathrooms, patios, stairs and closets.

Procter & Gamble currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the consumer goods sector include Diamond Foods, Inc. (DMND), J&J Snack Foods Corp. (JJSF) and Unilever plc (UL). All these stocks carry a Zacks Rank #2 (Buy).

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>>> Church & Dwight - World-Famous, But Little-Known Dividend Growth Champion



Feb. 26, 2014



http://seekingalpha.com/article/2051683-church-and-dwight-world-famous-but-little-known-dividend-growth-champion?source=yahoo



Among my favorite kinds of investments are those that are world famous, but little known. By this, I mean that the company sells famous products that are household names, yet the parent company isn't widely recognizable. This allows for the ability to earn outsized returns from relatively boring, dependable dividend growers such as the company I'm going to analyze.

Church & Dwight (CHD) has long been a favorite dividend growth stock of mine and one I was happy to add to my real world experimental dividend growth portfolio (you can see the portfolio here). My goal with this article is to illustrate that you can generate long term and market smashing returns with something as boring as a seller of baking soda, condoms and household cleaners.

Company Overview:

Church & Dwight was founded in 1846 and is an international seller of consumer and industrial goods. They operate in 3 segments.

Consumer Domestic:

This segment sells household names such as Arm & Hammer baking soda and cat litter, OxiClean, First Response pregnancy tests, Trojan condoms, Xtra laundry detergent, Spinbrush toothbrushes, Nair, Orajel, AIM toothpaste, Vitafusion and L'il Critters gummy vitamins. The company calls these 9 segments their "power brands". Each of them has #1 market share in their respective markets. Trojan condoms, for example, have 70% market share and L'il Critters vitamins have 60% of children's vitamin market.

60% of sales result from what the company calls its 4 "mega Brands": Vitafusion/L'IL CRITTERS, Trojan, Arm & Hammer and OxiClean. The main difference between power brands and mega brands is a better return on investment when it comes to R&D, advertising, licensing and organizational costs.

Consumer International: Sells the above products in countries such as Canada, France, Australia, the United Kingdom, Mexico, and Brazil.

Specialty Products:


Offers specialty chemicals, such as performance grade sodium bicarbonate, potassium carbonate, and potassium bicarbonate; animal nutrition products, including feed grade sodium bicarbonate, rumen fermentation enhancers, feed grade potassium carbonate, rumen bypass fat and lysine, omega 3 and omega 6 essential fatty acids, and natural sodium sesquicarbonate; and specialty cleaners for commercial, professional, and industrial applications.

Competitive Advantages and Plans for Growth:

As presented in the last investor presentation management's focus has the following priorities:

1. Growth of mega and power brands through EPS accretive mergers and acquisitions.
•An example is the acquisition of Avid health maker of Vitafusion and L'il Critters gummy vitamins, for $650 million. The purchase became accretive to EPS in 2013.
•At the end of 2013, the company had $2.6 billion in potential liquidity to make acquisitions.

2. New Product Development
•Since 2007 fully 32% of company sales have come from new products. An example of this has been the growth of the Arm & Hammer brand (in 86% of American homes) to include things such as diaper pails, vacuum bags, air filters, cat litter, toothpaste and deodorants.
•Current R&D is focused on Clump and Seal cat litter, which the company claims holds in odor for 7 days, teeth whitening toothpastes under the truly radiant name brand, and Highly fragranced laundry detergents.

3. Cap-ex for organic growth
•An example of this is the $67 million the company spent on a new laundry detergent plant in 2013. The more modern and automated plant resulted in improved margins.

4. Return of cash to shareholders
•Church & Dwight has paid 452 consecutive dividends which is 113 years of uninterrupted income to shareholders. The company has increased dividends 16 consecutive years at 14.47% CAGR. In the last 5 years, the rate of dividend growth has exploded with 47.11% CAGR. However, due to the rate of growth exceeding earnings, the payout ratio has reached 40%, a level management sees as ideal. This means that the dividend growth in the future will have to track the growth in earnings. With analysts anticipating 10.8% annual EPS growth over the next 5 years and the company's 13 consecutive years of double digit EPS growth, it is likely that the dividend will continue to grow at 10-11% over the half decade.

5. Paying down debt

Balance Sheet
Total Cash (mrq): 496.90M
Total Cash Per Share (mrq): 3.58
Total Debt (mrq): 803.30M
Total Debt/Equity (mrq): 34.93
Current Ratio (mrq): 1.71
Book Value Per Share (mrq): 16.55


Cash Flow Statement
Operating Cash Flow [TTM]: 499.60M
Levered Free Cash Flow : 426.77M


As seen from this table, Church & Dwight's debt is very manageable. The current ratio, a proxy for short term liquidity, is near the ideal level of 1.6. In addition, the company generates massive free cash flow, with 13.4% of sales being converted to FCF. This represented a 14% increase over 2012 and indicates that the company has no problems servicing its debt.

The current ratio is the assets/liabilities of a company and a number too low, less than 1, means the company may have a hard time paying interest on its debts should credit markets freeze up as they did during the financial panic. Too high, however, means that management is stockpiling cash. This might be to prepare for a large well thought out acquisition or because management doesn't know how to invest the company's resources.




Stock

Ind Avg


Price/Earnings TTM 24.1 21.0
Price/Book 4.0 5.2
Price/Sales TTM 3.0 2.2
Rev Growth (3 Yr Avg) 7.3 -12.9
Net Income Growth (3 Yr Avg) 13.4 -13.8
Operating Margin % TTM 19.5 15.6
Net Margin % TTM 12.4 10.4
ROA TTM 9.4 8.4
ROE TTM 18.1 21.4
Debt/Equity 0.3 0.5

As seen from this table from Morningstar.com, Church & Dwight is growing faster than competitors such as Procter & Gamble (PG), Colgate-Palmolive (CL) and Kimberly-Clark (KMB). In addition, it is more profitable, has less of a debt burden and has very high return on assets and shareholder equity. These last two metrics are important signs of quality management. High ROA and ROE combined with a current ratio of 1.7 means that management is hard at work putting shareholder cash and resources to work in efficient and profitable ways.

Past Performance:

It's this track record of long term managerial excellence and disciplined acquisitions that has led Church & Dwight to remarkable growth in revenues, earnings and share price.

CHD Revenue Chart

Revenues over the last 28 years have grown 16.3 fold, representing a 10.7% compound annual growth rate [CAGR] for over a quarter century.

CHD EPS Diluted Chart

Over the last 28 years, earnings have grown 28.8 fold. This represents a stunning 12.9% CAGR.

With the growth in earnings and a management that is strongly committed to returning cash to shareholders, the dividend has been a strong grower.

CHD Dividend Chart

A 38 fold increase in the dividend since 1985 represents a 14% CAGR. This is similar to the 14.5% CAGR that Church & Dwight has shown since it began its 16 year streak of dividend increases.

Due to strong growth in earnings and dividends, Church and Dwight has been an incredibly profitable long term investment for shareholders.

CHD Chart

Here is Church & Dwight's CAGR performance over several periods of time:
•since 2004 (current CEO): 19.4%, 21.1% with dividend reinvestment
•since 1988: 17.7%, 19.1% with dividend reinvestment
•since 1977: 14.6%, 16.25% with dividend reinvestment

A $10,000 investment in Church & Dwight in 1977 would today be worth $1.371 million. Had dividends been reinvested, that figure would be $2.26 million, which is a difference of $890,000 from just a 1.6% difference in CAGR. This shows not only the power of Church & Dwight to grow investors' wealth long term, but how important growing dividends and their reinvestment is to long term total returns.

Valuation:

Given its massive success recently, has Church & Dwight grown too fast? Is it still a good buy today? If so, what returns can new investors expect?

DCF Analysis: Using historical performance and analyst projected growth rates to model the present day value of future earnings.
•Assumptions: current EPS: $2.79
•5 year EPS growth: 10.8%
•Growth over next 28 years: 12.9% (historical performance)
•Discount rate: 9%, the CAGR of the stock market since 1871

Under those assumptions, the current fair value of Church & Dwight is $163.77 which indicates the current stock price has a 59% baked in margin of safety. This means, should the company falter in the future, investors are protected from market underperformance by a large amount.

Projected Future Returns:

CHD PE Ratio Chart

Over the last 5 years, Church & Dwight has averaged a PE of 23.64. Today's PE of 24.34 represents a slight premium in this regards.

Assuming 10.8% EPS growth for 5 years, we model 2018 EPS of $4.66/share. Applying the historical PE multiple, we get a projected 5 year price target of $110.14. Adding in 5 years of projected dividends, we get a total share value of $117.83, which results in a 12.23% CAGR. This rises to 14.4% CAGR with dividend reinvestment.

This approach models probable 5 year performance based purely on earnings growth.

However, Church & Dwight is also a dividend growth stock, so we can also model the future performance using dividend yield, which has averaged 1.4% over the past 5 years.

CHD Dividend Yield Chart

In the latest investor presentation, management indicated that they wish to keep the payout ratio stable. This means that dividends will have to grow at the rate of earnings over the next 5 years.

Using a 10.8% annual rate of growth, I project a 2018 annual dividend of $1.87, resulting in a share price of $132.86, (assuming the yield reverts to the mean). Add in the $7.69 in expected dividends, and we get a total share value of $140.55. This represents 16.2% CAGR which rises to 17.8% CAGR with dividends reinvested.

Finally, we can take the DCF fair value and assume that the current stock price will achieve this level in 5 years. This results in a total return of 20.3% CAGR rising to 22% CAGR with dividend reinvestment.

Taking an average of the estimates we get a projected 5 year total return of 16.23% CAGR that rises to 18.1% CAGR with dividend reinvestment.

Note that the returns projected are all within the historical returns that Church & Dwight has returned over the course of its history. This indicates that the current price is a good one for new investors to open positions and current shareholders to add to.

However, it is always a good idea to use basic technical analysis to see what current pricing trends say about the timing of a purchase.

Technical Analysis:

Currently, the short term trend is neutral with a mildly bullish medium term trend. There is massive support at $65.32, indicating the stock is unlikely to dip below this level without a catalyst such as a general market correction or bad news from the company. The last candlestick pattern is a bearish Doji star which is a very bearish indicator. This might indicate that Church & Dwight may trade range bound for the short term.

Summary:

Given the fundamental strengths of the Church & Dwight which include the expected growth of the company's mega brands around the globe, I recommend interested investors buy the stock at these prices. Management has exhibited a long track record of excellence when it comes to disciplined, accretive acquisitions and organic growth. A firm commitment to maximizing profitability, production efficiencies and returning cash to shareholders means a continuation in the strong dividend growth, though not at the breakneck pace of the last 5 years. Given the anticipated 16-18% CAGR total returns over the next 5 years, it seems likely Church & Dwight will double the historical returns. This makes Church & Dwight a solid "BUY NOW" at this price.

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Ecolab -- >>> Bill Gates Keeps Getting Richer. Here's the World's Richest Man's Secret


By Patrick Morris

January 11, 2014


http://www.fool.com/investing/general/2014/01/11/bill-gates-keeps-getting-richer-heres-the-worlds-r.aspx



Bill Gates is the world's wealthiest man -- but there is one simple trick everyone can learn from his investing style.

It has been reported that in 2013, Bill Gates added an astounding $15.8 billion to his wealth, bringing his estimated net worth to nearly $80 billion, yet the way he did it may surprise you.

Beyond Microsoft
It's no secret Bill Gates has an enormous amount of wealth tied up in Microsoft (NASDAQ: MSFT ) -- but he actually also has an immense amount of money in publicly traded companies that the average person can buy. In fact, according to Bloomberg, Microsoft stock accounts for only a little less than 17% of Gates' massive fortune.


Source: Robert Scoble on Flickr.

Of Gates' wealth -- most of which is held in Cascade Investment, his own investment firm -- about half of it is tied to the shares of publically traded companies, and the rest is invested privately.

In fact, his largest public holding outside of Microsoft isn't even an American company, but instead Montreal-based Canadian National Railway (NYSE: CNI ) , which Gates has a $4.8 billion position in. The next behind Canadian National Railway is Republic Services (NYSE: RSG ) , which is one of the largest waste disposal companies in the world, and in which Gates has a $2.9 billion position.


Source: Flickr/Auckland Photo News

Gates also has $2.9 billion worth of Ecolab (NYSE: ECL ) , which is a global provider and manufacturer of sanitary products for a variety of industries and groups. Close behind that is another industrial agricultural manufacturer, Deere & Company (NYSE: DE ) , of which Gates, through Cascades Investments, owns a little over 8% of the company, or $2.7 billion.

What we can learn
At first glance, there's little rhyme or reason to what Gates holds. They all pay dividends, but outside of Republic Services and its 3.2% dividend yield, none of the previously mentioned companies do so at a rate that would make an income investor raise his eyebrows.

Deere & Company is certainly an interesting consideration from a value investor's perspective, as it only trades at a trailing 12 month price-to-earnings ratio of around 10. However, the rest of the companies trade anywhere between 19 and 35 times their price-to-earnings ratios. Certainly value investors wouldn't be drawn to these.

Seemingly, it isn't even as though a definitive conclusion can be drawn from what Gates or Michael Larson, the manager of Cascade Investment, does with the immense amount of wealth that Gates has accumulated.


Source: Issac Mao on Flickr.

Yet when Gates first tabbed Larson to be his fund manager, he said, "I wanted someone with a conservative philosophy about investing. I needed to have complete faith in the person I picked, since I didn't ever want to have to look over their shoulder."

Larson himself noted plainly in a Fortune article, "I'm not a risk taker." He went on to say, "my most important job is asset allocation. That's where the real money is made."

The beauty of diversification
Perhaps, the lack of continuity and overlap is Gates' method. His wealth is diversified enough to protect it and grow it when opportunity, no matter what it looks like, arises in the eyes of his trusted fund manager. It is critically important to remember that having a diverse portfolio is essential as you invest for the long term, and the example of the world's wealthiest man provides only further evidence of that.

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>>> 5 Rock-Solid Stocks Growing Their Dividends Well Above Inflation



By Joe Tenebruso

November 9, 2013



http://www.fool.com/investing/general/2013/11/09/5-rock-solid-stocks-growing-their-dividends-well-a.aspx



Dividend investors would be wise to focus not just on a stock's current yield, but also on the long-term growth potential of its dividends. That's because strong businesses that consistently raise their dividend payouts reward shareholders with a steadily rising income stream that essentially equates to a raise every year. And well, who doesn't like a raise?

But there are other reasons to value dividend growth so highly, and they're well supported by research. For instance, a study by C. Thomas Howard published in Advisor Perspectives found that for every percentage point a stock's yield rises, its annual return increases by 0.22 percentage points if it's a large cap, 0.25 if it's a midcap, and 0.46 if it's a small cap. Even better, Howard found that dividend-growing stocks outperformed dividend cutters by 10 percentage points per year from 1973 to 2010 and beat both flat- and no-dividend stocks. And the icing on the cake is that Howard showed that this outperformance came with a third less volatility. Higher returns, less volatility-induced stress, and a steadily growing income stream -- what's not to love?

With that in mind, here are five stocks that have grown their dividends significantly above the rate of inflation in the past year.


Coca-Cola (NYSE: KO )

Kinder Morgan Energy Partners (NYSE: KMP )

Altria (NYSE: MO )

Johnson & Johnson (NYSE: JNJ )

Procter & Gamble (NYSE: PG )


As the world's leading soft-drink company, Coca-Cola needs little introduction. Coca-Cola has built a beverage empire on the globally popular Coke and Diet Coke brands, but its offerings also include noncarbonated drinks such as Minute Maid juices, Powerade sports drinks, and Dasani bottled water. Fools have given Coca-Cola a four-star CAPS rating, and its stock pays a 2.8% dividend.

Kinder Morgan Energy Partners' valuable network of pipelines transports a host of products such as gasoline, diesel fuel, jet fuel, carbon dioxide, natural gas, and natural gas liquids to various markets in North America. These pipelines act as tollbooths -- earning a fee every time products pass through Kinder Morgan's network. And as a master limited partnership, Kinder Morgan Energy Partners passes on that cash flow to its unit holders in the form of a hefty 6.7% dividend, which has also helped KMP earn a four-star rating on CAPS.

As the parent company of Philip Morris USA, Altria controls much of the U.S. tobacco market with Marlboro, Copenhagen, Skoal, and other brands. Fools have given Altria a four-star rating in CAPS, and its stock is yielding a sizable 5.1%.

Johnson & Johnson, the vast and diverse health-care giant, strives to help people get well through its consumer products, pharmaceuticals, and medical devices. J&J's popular products include Tylenol, Listerine, Band-Aid, Neosporin, and Splenda, among many others. This Fool favorite currently has a four-star ranking on CAPS and is paying a 2.8% dividend.

Consumer goods leader Procter & Gamble offers products for household care, beauty and grooming, and health and well-being. Some of Procter & Gamble's billion dollar brands include Gillette, Head & Shoulders, Bounty, Crest, Oral B, and Tide. This dominant consumer goods titan has a four-star CAPS rating, and offers investors a growing 2.9% dividend.

The Foolish bottom line

Had you invested in these companies a year ago, you would have enjoyed total dividend increases ranging from 7% to 9.5%. And, importantly, all of these companies grew their payout much faster than the rate of U.S. inflation during that time, thereby protecting (and growing) your purchasing power.

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>>> Skin-care products


http://living.msn.com/home-decor/cleaning-organizing/10-ways-your-home-could-be-toxic-1#9


The average American uses approximately 10 to 15 personal care products with a total of 126 different ingredients each day. "Their chemicals are absorbed into the skin and bloodstream, which can have toxic effects on our organs," says Cecilia Wong, a holistic skin-care expert. The most common offenders are parabens; hormone disrupters such as DEA, MEA, and TEA; fragrance; mineral oil, and propylene glycol, says Wong. Just as you scour nutrition labels, read the ingredient list on your beauty products and opt for those with plant or fruit essential oils, herbs, and natural preservatives, which are high in vitamins and antioxidants and are safe for your body. Just be sure to toss natural brands after three months—since they're preservative-free, they may go bad if kept for longer.


Shampoo


Many shampoos contain sulfates, a sudsing agent that's also used in laundry detergent and actually doesn't help get hair (or clothes) clean and ends up making strands more brittle. Whole Foods has an entire aisle devoted to non-detergent beauty lines, but we particularly like Lotus Moon's Abundant Shampoo because it's sulfate-, paraben-, and fragrance-free, and is made with all-natural organic ingredients like pink grapefruit and sweet-orange essential oils.


Clothing


Garments made from synthetic fabrics such as rayon, polyester, and spandex may be made or treated with toxic chemicals like formaldehyde in an effort to keep them wrinkle-free. Formaldehyde has been linked with upping your odds of lung cancer, so it may be a good idea to choose clothing made from natural fibers such as cotton, silk, hemp, or organic wool. Merino wool is less itchy, doesn't wrinkle, and is odor-resistant, meaning you'll save energy—yours and the environment's—by doing laundry less often. Icebreaker's super-comfy Villa Dress is made with merino wool and is versatile enough to wear to work and on date night.


Cookware


"We like the convenience of nonstick cookware, but it's full of chemicals like TOEEL and PTFA that have been linked to cancer," says Seo. "A better bet is ceramic cookware with that blue coating, which is free of all those chemicals." To make cleaning ceramic pans easier, cook on medium—not high—heat to avoid scorching the pan. Don't soak a hot pan in cold water overnight, because it will lead to warping. Instead, sprinkle some baking soda and dish cleanser in the pan and scour with a Brillo pad. Seo's cookware line has a ceramic-based nonstick coating that's 100-percent free of harmful chemicals like PTFE and PFOA and is dishwasher safe.


Tap water


Lead, chlorine, and pesticides can contaminate the stuff that comes out of the sink, so getting a filter may be a good idea. "But test your tap water with a kit like those sold at Home Depot to make sure you really need a water filter before you invest in one," says Seo. "Also, don't trash old filters when it's time to replace them, because they're loaded with lead and other chemicals that can leak inside a landfill and pollute ground water. Instead, drop them off at a community disposal event for harmful trash." Or invest in Multipure's water filters, which last a lifetime, and thanks to their carbon composition are a-okay to toss in the trash.

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Church + Dwight -- >>> 4 Companies to Hold for the Long Term



By William Bias

September 10, 2013


http://www.fool.com/investing/general/2013/09/04/4-companies-to-hold-for-the-long-term.aspx



Companies from the consumer goods sector can make good long-term investments. Consumer companies make things that people need every day such as laundry detergent, shaving cream, tooth paste, and food. Customers continually return for their products providing these companies with some immunity from economic ups and downs. You can buy shares in these companies knowing that customers need their products and ensuring a better chance of long-term superior returns. The four companies below sell products essential to modern life.

Bottled water and juice

Beverage giant Coca-Cola (NYSE: KO ) built its business around its portfolio of sodas such as Coca-Cola, Fanta, and Sprite. Later it expanded into areas such as bottled water, tea, and juice. Over the past five years Coca-Cola delivered a total return of 70% versus 44% for the S&P 500. Trends point to a slow shift away from Coke's bubbly portfolio to its healthier non-sparkling products. Non-sparkling volume increased 6% in its most recent quarter. Coca-Cola can leverage its distribution system to capitalize on the healthy lifestyles trend enabling it to profitably sell its water, orange juice, and tea at competitive prices allowing for more long-term growth.

Spices and gravy

Flavoring company McCormick (NYSE: MKC ) sells items that improve your eating experience such as salt, pepper, and gravy mixes. It even sells honey in the Canadian market. Over the past five years McCormick gave investors an 88% total return versus 44% for the S&P 500. The company sells products to grocery stores for individual use and to the industrial food preparation industry. Consumer and industrial sales increased 4% and declined 1% respectively in its most recent quarter. This indicates that the consumer wants to eat in more, stemming from macro-economic pressures. International expansion and new product varieties will move this company forward. Catering to the industrial and consumer markets means that the company can benefit from the eventual return of the consumer to restaurants.

Peanut butter, jelly, and coffee

Food conglomerate J.M. Smucker (NYSE: SJM ) makes the famous Smucker's jelly, Jif peanut butter, and Folgers coffee. This company enjoys a rich history going back over a century, and consumers are familiar with its portfolio of products. Over the past five years the company gave its investors a 144% total return versus 44% for the S&P 500. J.M. Smucker's operating income jumped 12% due to volume increases stemming from price cuts taken on coffee and peanut butter. Like most large companies its future lies in international expansion. It also realizes the impact of the healthy lifestyles movement. On Aug. 21, the company bought Enray, "A leading organic, Gluten-Free Ancient Grain Company." You may see further strategies pertaining to organic food in the future from this company.

Toothpaste, detergent, and baking soda

Personal products company Church & Dwight (NYSE: CHD ) sells the famous Arm & Hammer branded detergent and baking soda. It also sells Orajel instant pain relief products, pregnancy tests, and hair remover. Church & Dwight delivered a total return of 101% versus a 44% return for the S&P 500 over the last five years. Unlike the other three companies Church & Dwight is relatively small and nimble. Increasing market share boosted revenue 13% in its most recent quarter. Management's focus on the small stable of brands such as Arm & Hammer, Nair, and Oxiclean will prove invaluable to expanding shareholder value over the long term. After all it's easier to grow from a small base.

Conclusion
On the whole, these companies sell products crucial to modern-day living such as bottled water, spices, peanut butter, and laundry detergent. People will buy these products over and over as they use them up in good times and bad. These qualities make it easier for you to hold the stocks over the long term, minimizing transaction costs and taxes.

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Church & Dwight -->>> Church & Dwight Reports Second Quarter 2013 Results


Q2 Reported Net Sales up 13.1%, EPS up 8.9% to $0.61

Gross Margin Expanded 110 basis points to 44.6%

Affirms Full Year EPS Outlook of $2.79


http://finance.yahoo.com/news/church-dwight-reports-second-quarter-110000398.html



EWING, N.J.--(BUSINESS WIRE)--

Church & Dwight Co., Inc. (CHD) today reported net income for the quarter ended June 30, 2013 of $86.6 million or $0.61 per share, compared to net income of $79.3 million or $0.56 per share for the same period in 2012. Reported net sales for the second quarter increased 13.1% to $787.6 million. Earnings per share increased 8.9%.

Second Quarter Review

Mr. Craigie, Chairman and Chief Executive Officer, commented, “We are pleased with our second quarter business results. The global domestic and international consumer businesses, constituting over 90% of the company’s total sales, delivered organic growth of 3.2% driven by increased market share on six of our eight power brands. Demand from the dairy customers of our Specialty Products business was significantly impacted by colder than normal weather, which reduced our consolidated organic sales growth to 1.8%, reflecting 2.7% volume growth and 0.9% unfavorable product mix and pricing. We also exceeded our gross margin expectations and delivered the fourth consecutive quarter of 100+ basis points of gross margin expansion.”

Consumer Domestic net sales were $594.5 million, an $88 million or 17.4% increase over the prior year second quarter sales. Second quarter organic sales increased by 2.5%, primarily due to higher sales of ARM & HAMMER liquid laundry detergent, OXICLEAN laundry additives, TROJAN products, and FIRST RESPONSE diagnostic kits. These increases were partially offset by lower sales of ARM & HAMMER powder laundry detergent, XTRA liquid laundry detergent, and NAIR depilatories. Volume growth contributed 4.6% to the increase in sales, partially offset by 2.1% unfavorable product mix and pricing.

Consumer International net sales were $132.7 million, an $11.4 million or 9.4% increase over the prior year second quarter sales. Second quarter organic sales increased by 6.3%, primarily due to stronger sales in Canada, the UK, and Australia. Volume growth contributed 2.8% to the increase in sales, and 3.5% resulted from favorable product mix and pricing.

Specialty Products net sales were $60.4 million, an $8.2 million or 12.0% decrease over the prior year second quarter. Second quarter organic sales decreased by 11.2%. The significant decrease is primarily attributable to colder than normal weather throughout the second quarter which resulted in a significant decline in demand from the dairy industry. Volume declines drove 10.9% of the decrease in sales, and 0.3% resulted from unfavorable product mix and pricing.

Gross margin expanded 110 basis points to 44.6% in the second quarter compared to 43.5% in the prior year second quarter. The expansion is due primarily to the positive impact of productivity programs. Commodity costs were flat in the quarter versus the prior year second quarter.

Marketing expense was $103.7 million in the second quarter, a $15.3 million or 17% increase over the prior year second quarter as we continue to increase the investment in our power brands. Marketing expense as a percentage of net sales was 13.2%, a 50 basis points increase from the prior year second quarter.

Selling, general, and administrative expense (SG&A) was $106.8 million in the second quarter, a $14.6 million increase from the prior year second quarter primarily due to the inclusion of the recently acquired gummy vitamin business. SG&A as a percentage of net sales was 13.6%, a 40 basis point increase from the prior year second quarter.

Income from operations was $140.5 million in the second quarter, an $18.1 million or 14.8% increase over the prior year second quarter. Operating income as a percentage of net sales was 17.8%, a 20 basis point increase over the prior year second quarter.

The effective tax rate in the second quarter was 34.5%, compared to 35.6% in the prior year second quarter. The Company expects the full year effective tax rate to be approximately 35%.

Cash Flow

For the first six months of 2013, net cash from operating activities was $161.0 million, a $28.2 million decrease from the prior year second quarter, due to a $36 million deferral of the December 2012 estimated federal tax payment to January 2013 as a result of Hurricane Sandy relief. Capital expenditures were $20.1 million, a $19.9 million decrease from the first half of 2012 which included the construction of the Company’s Victorville, California plant. Full year capital expenditures are estimated to be approximately $80 million.

Cash on hand as of June 30, 2013 was $274.1 million.

Standard & Poor’s Upgrade

On June 28,2013, Standard & Poor’s upgraded the Company’s long-term corporate rating from BBB to BBB+. The Company expects that the upgrade will further improve the Company’s ability to access capital as well as reduce future borrowing costs.

New Product Innovation

Mr. Craigie commented, “We continue to be pleased with the strength of our new product pipeline. In the second quarter, we launched two highly innovative products: ARM & HAMMER ULTRA POWER concentrated liquid laundry detergent and a line of TROJAN lubricants, which are both off to a strong start. In addition, we successfully launched the ORAJEL single dose cold sore treatment and licensed two hit songs by the popular band “1D” (One Direction) on our TOOTH TUNES musical toothbrush. Our innovative new products have received strong distribution support from retailers and will continue to be supported by increased marketing spending with the expectation to deliver strong organic sales growth on both our value-oriented and premium priced products.”

Gummy Vitamin Update

Mr. Craigie stated, “The gummy vitamin business acquired in October 2012 is exceeding our growth and synergy expectations and is expected to be a major contributor to revenue and earnings growth in 2013 and future years. The gummy vitamin category has grown rapidly in the latest 13 week and 52 week periods in measured channels. Sales of our gummy vitamins are growing at a double-digit rate due to strong category growth and market share gains, and we are ahead of schedule in expanding gross margin. In addition, we are increasing our marketing and research and development spending to optimize this terrific long-term growth opportunity.”

Outlook for 2013

Church & Dwight reaffirms its full year 2013 earnings per share outlook of $2.79, a 14% increase on a reported basis.

Mr. Craigie commented, “We continue to perform well in a challenging business environment. Consumer spending and category growth are expected to remain weak in the second half of 2013 and, in some categories, are being exacerbated by increased price competition. Nevertheless, we are in a strong position to continue to deliver value to our stockholders as a result of our unique portfolio of value and premium products, a strong pipeline of innovative new products and disciplined cost management.”

Mr. Craigie continued, “Given the continuing difficult business environment, we expect to deliver our 2013 earnings per share target in a different way than previously communicated. Total reported net sales for the year are expected to increase at close to a double-digit rate. Gummy vitamin sales are tracking ahead of expectations, but organic sales are expected to grow approximately 2% due largely to lower than expected sales of our Specialty Products business and our decision to be price competitive in the U.S. consumer business. Despite the difficult pricing environment, we are raising our full year gross margin outlook by 25 basis points, to 50 to 75 basis points versus last year based on expected continued great progress of our productivity programs. Importantly, within the EPS outlook, we are increasing our marketing investment to continue driving share gains on our power brands and support stronger organic sales when our categories return to historical growth rates.”

Mr. Craigie concluded, “With regard to the third quarter, we expect earnings per share of approximately $0.73, a 10.6% increase compared to last year’s third quarter reported EPS of $0.66. Reported 2013 third quarter net sales growth compared to prior year is expected to be approximately 11 to 12%. Organic sales growth is expected to be approximately 1 to 2%. These projected results reflect increased marketing spending in the third quarter behind the innovative new products that are expected to drive the continued share growth of our power brands.”

Church & Dwight Co., Inc. (CHD) will host a conference call to discuss second quarter 2013 results on August 2, 2013 at 10:00 a.m. (ET). To participate, dial in at 877-741-4354, access code: 18057971 (International: 706-758-7438, same access code: 18057971). A replay will be available two hours after the call at 855-859-2056 or 404-537-3406 (same access code: 18057971). You also can participate via webcast by visiting the Investor Relations section of the Company’s website at www.churchdwight.com.

Church & Dwight Co., Inc. manufactures and markets a wide range of personal care, household and specialty products under the ARM & HAMMER brand name and other well-known trademarks

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Sensient -- >>> Sensient : Solid Growth And Much Cheaper Than The Competition


Jul 2 2013

by: Matthew Frankel



http://seekingalpha.com/article/1530992-sensient-solid-growth-and-much-cheaper-than-the-competition?source=yahoo



Sensient Technologies (SXT) has lagged the S&P 500 so far this year, with shares up just 7%. Despite rising revenues and increasing profit margins, this maker of colors, flavors, and fragrances has not managed to keep up with its competition. For example, International Flavors & Fragrances (IFF) is perhaps the closest comparison to Sensient and is up about 15% so far in 2013. Does this mean that Sensient is one of the bargains in this industry, or would investors be better off putting their money in one of the alternatives?

About Sensient

As mentioned, Sensient is a manufacturer of various products related to colors, flavors, and fragrances. The company's operations are categorized into two segments, the Flavors & Fragrances Group and the Color Group.

Flavors & Fragrances include products that are meant to enhance or alter the flavor or aroma of a customer's products. Most of this segment is geared toward the food industry, but also produces flavorings for the pharmaceutical business. Products made by the segment include flavor-delivery systems, essential oils, natural and artificial flavors, aroma chemicals, and the company's dehydrated flavors business, Sensient Dehydrated Flavors. The dehydrated products include onion and garlic-based seasonings as well as a line of other spices and dehydrated vegetables.

The Color Group produces a variety of colorings for beverages, processed foods, confections, pet foods, cosmetics, and more. The group operates under several trade names such as Sensient Food Colors, Sensient Pharmaceutical Technologies, Sensient Paper Colors, and Sensient Cosmetic Technologies.

Growth

After a small contraction in revenues brought on by the recession, Sensient has grown its revenues every year since 2009 and is projected to grow by 5% this year. Additionally, profit margins have been widening in recent years, and this trend is also projected to continue due to increased demand for their products which leads to greater pricing power. The company is expecting operating margins of 17.2% this year, up from 17.0% in 2012.

(click to enlarge)

Sensient's recent trend is toward more natural colors and flavorings, recognizing the changing desires of consumers. Currently, the company produces a mix of natural and synthetic products and has expressed its intention to invest significant capital in research and development over the next few years in order to make this transition, as well as to increase its production capacity as global demand grows.

Looking at the chart above, other than the peak recessionary years, Sensient's growth actually seems very linear (and maybe even predictable). If you believe (as I do) that the economic recovery will continue for the next several years, there is no reason to think this growth pattern will change, especially with increased R&D spending. A further increase in sales should also lead to further improvement in Sensient's profit margins, which will translate to a very nice earnings growth rate.

Valuation and alternatives

Sensient currently trades at a significant discount to its competitors. Shares trade at 15.3 times last year's earnings, which due to the previously mentioned combination of higher revenues and wider margins are expected to grow by just over 6% this year. However, the consensus estimates call for earnings growth to increase significantly beyond this year, as current R&D efforts begin to pay off. The median estimates are $3.00 and $3.27 per share for 2014 and 2015, respectively, for annual earnings growth of 11.1% and 9%.

Also worthy of consideration is the company's relatively low debt load, which has been reduced by 25% since 2008. In fact, Sensient's debt-to-capital ratio is just 23.9%, far below the industry average of 38.3%, which is one of my favorite indicators of financial strength. In contrast, International Flavors & Fragrances has a far less attractive ratio of 43.7% and trades at a more expensive P/E of 19.2 times last year's earnings with similar growth projections as Sensient.

The largest name in the space is McCormick (MKC) which produces spices, seasonings, and flavorings under several well-known brand names. McCormick is about four times the size of Sensient in terms of both market cap and sales. While McCormick trades at a much higher valuation of 21.8 times earnings, it is growing more rapidly due to the higher pricing power and brand marketing ability that comes with being a sector leader.

Risks

The most obvious risk would be a slowdown or reversal in the U.S. economic recovery. Companies like Sensient tend to perform in line with the overall economy, as can be seen in the chart above.

Other risks include increased competition and increased pricing pressure from larger companies. In my opinion, one of the worst things that could happen for Sensient would be for one of its rivals to get taken over by a large food company with deep pockets such as General Mills or Kellogg. On the other hand, if Sensient continues to grow at such a consistent and attractive rate, it could very well become a takeover target itself.

Conclusion

Sometimes in a business like this, the best way to find bargains is to look at the smaller, less well-known names like Sensient. With better financial strength and cheaper valuation than its competition, as well as solid growth and increased investment in evolving its product line, Sensient is by far the most attractive name in the flavorings and fragrances business. Over the next few years I would like to see the company try to grow the retail size of its business. Just think of how much of a household name McCormick is. Sensient needs to strive to become this kind of brand name in order to jump to the next level.

So where do I think Sensient could go? Assuming that the current P/E doesn't change, which is a conservative assumption based on the valuation of its peers, shares could easily reach $50 next year if the company performs to expectations, an upside of about 20% over current levels.

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International Flavors & Fragrances - profile -



>>> International Flavors & Fragrances Inc. (IFF), together with its subsidiaries, creates, manufactures, and supplies flavor and fragrance products worldwide. The company operates in two segments, Flavors and Fragrances. The Flavors segment offers flavor compounds primarily to the food and beverage industries for use in consumer products, such as prepared foods, beverages, dairy, food, and sweet products. The Fragrances segment provides functional fragrances, including fragrance compounds for personal care and household products; fine fragrance and beauty care comprising perfumes, colognes, and toiletries; and fragrance ingredients consisting of synthetic and natural ingredients that could be combined with other materials to create functional and fine fragrance compounds. This segments? customer include perfume and toiletries manufacturers in the cosmetics industry; and manufacturers of soaps, detergents, fabric care, household cleaners, and air fresheners in the household products industry. International Flavors & Fragrances Inc. was founded in 1909 and is headquartered in New York, New York. <<<

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B&G Foods, Church & Dwight -- >>> Three Growing Companies Building Powerful Brands



By Reuben Brewer

June 19, 2013|

Tickers: BGS, CHD, JNJ



http://beta.fool.com/reubengbrewer/2013/06/19/brand-extension-experts/37556/?source=eogyholnk0000001



B&G Foods (NYSE: BGS) just announced plans to buy Robert's American Gourmet Food, best known for its Pirates Booty brand. This is likely to be another in a long series of solid acquisitions for this brand extension expert.

Little Company, Big Brands

B&G started life with a collection of smaller brands that are dominant in their niches. Pickles and molasses are two examples. The company, however, quickly ramped up its acquisition machine. The first real headline-grabbing transaction was buying Cream of Wheat from Kraft in early 2007.

At Kraft, this breakfast mainstay was an all but forgotten brand. At B&G, however, it was an important growth driver. Cream of Wheat's new owner launched new flavors and spruced up its image. Sales quickly responded, and Cream of Wheat went from a dying product at a big company to a growing one at a small company.

Robert's American Gourmet Food is privately held and relatively small. That means it should quickly benefit from B&G's relationships in the retail industry. And, B&G is likely to invest in product extensions, building out the Pirate brand from its current lineup of just three snack offerings.

Fueling Growth

B&G's acquisition model has led to solid growth over the last decade. The top line has almost doubled over that time, going from about $325 million to around $630 million last year. And the company is still small enough that it can pick off smaller unwanted or unloved brands, resuscitate them, and see a big impact on the top and bottom lines--just like it did with its 2011 purchase of Mrs. Dash from Unilever.

The small company has increased its dividend in each of the last two years. The shares yield around 4%. Although its size increases risk, it is a good option for income investors looking for a food stock.

Not the Only Expert

B&G, however, isn't the only expert at brand extensions. For example, Church & Dwight (NYSE: CHD) has been able to take Arm & Hammer Baking Soda and branch out into everything from kitty litter to toothpaste. It's that type of outside the box thinking that's led the company's top and bottom lines higher every year for the past decade.

And the late 2012 addition of Avid Health looks like it could continue that trend. Avid is an already dominant player in the gummy vitamin market. Most would consider gummy vitamin's to be a child's product, but more and more adults are taking the healthy treats. With the aging baby boomers increasingly concerned about their health, moving beyond basic vitamins shouldn't be too hard.

While Church & Dwight shares aren't cheap, the stock has traversed a steady upward climb that is nothing short of impressive. The shares only yield around 1.8%, so income investors should look elsewhere, but those seeking growth should definitely consider them.

A Growth & Income Option

Another company that's known for buying, integrating, and building brands is health care and consumer products giant Johnson & Johnson (NYSE: JNJ). The most obvious area where the company has done this is in its consumer arm.

For example, Aveeno's oatmeal wash was pretty much a niche industry player before Johnson & Johnson bought it in 1999. Since that time, the Aveeno line has been extended with new products and received the benefit of JNJ's marketing might. An acquisition machine, JNJ tries to do similar things throughout its business.

The more recent purchase of Synthes is an example on the medical device side of the business. This buy extends the company's position in selling devices to treat trauma victims. It shouldn't take too long before JNJ starts to bring out new products, though the medical focus means that most investors won't realize it.

Although JNJ is often priced at a premium, it has been trading at reasonable levels of late. Concerns about consumer product recalls and drug patent expirations, however, have begun to abate. So, investors seeking a mix of growth and income from a household name should take a look.

Indeed, the company's around 3% dividend yield and long history of annual dividend hikes are truly compelling. Sales, meanwhile, look like they are back in growth mode after dipping during the 2007 to 2009 recession.

Building Brands

It's hard work to build brands and not every company is good at it. B&G's niche is taking on older brands that need a little love; It's a role in which it has excelled. Church & Dwight and JNJ, meanwhile, are two larger options that have long histories of success building brands. While their larger sizes limit the impact on the top and bottom lines to some degree, it also helps makes them safer investment options.

Involved in everything from baby powder to biotech, Johnson & Johnson's critics are convinced that the company is spread way too thin.

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Unilever -- >>> 10 food stocks with tasty potential


Jim Jubak

6-14-13


http://money.msn.com/stock-broker-guided/10-food-stocks-with-tasty-potential




Unilever


The June 6 announcement from the world's second-biggest consumer-goods company that it will start manufacturing food seasonings in Myanmar and invest $660 million there over the next decade tells you pretty much all you need to know about why -- at the right price -- you want to own a stake in Unilever (UL).

Patience: The company has been selling in Myanmar through third-party distributors. Discipline: A tested road map for approaching a developing economy by going deeper in a few categories, such as savories seasonings, shampoos and laundry products.

An eye for growth opportunities: The number of people in Myanmar with sufficient income for discretionary spending could rise to as many as 19 million in 2030 from 2.5 million now, according to a report by McKinsey Global Institute. (The population is 60 million.)

Unilever's ADRs trade at 17.9 times projected 2013 earnings per unit.

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McCormick -- >>> >>> 10 food stocks with tasty potential


Jim Jubak

6-14-13


http://money.msn.com/stock-broker-guided/10-food-stocks-with-tasty-potential



McCormick


Even this venerable maker of spices and flavorings (the company was founded in Baltimore in 1889) is getting in on the China acquisition act. On May 31, McCormick (MKC) announced that it had completed its acquisition of Wuhan Asia-Pacific Condiments, the maker of the DaQiao and ChuShiLe brand bouillon products. The products have a leading position in the central region of China, the company says, and as such go with McCormick's product portfolio in the coastal region.

What's impressive about that announcement is the company's recognition that it has to customize its product offerings, not just for China but also for China's very different regional palates.

McCormick's revenue took a hit in late January when, in its fourth quarter earnings report, the company announced lower sales to a major quick service restaurant chain in China: Yum Brands (YUM).

But from a low of $61.23, shares rebounded to $74.74 on May 15. They've dropped only 4.5% in the recent market retreat.

The shares trade at 22.3 times projected 2013 earnings per share.

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Brazil Foods -- >>> 10 food stocks with tasty potential


Jim Jubak

6-14-13


http://money.msn.com/stock-broker-guided/10-food-stocks-with-tasty-potential



BRF


BRF (BRFS) is Brazil's second-largest food company by revenue and the 10th largest food company in the world.

In the first quarter, this producer of poultry (34% of sales), pork and beef (9%), dairy (9%) and processed products (40%) grew revenue by 14% year over year.

But what puts this company on this list is the 31% growth in exports. (Exports make up 43% of company sales.) The company owns two of the best brands in Brazil, Sadia and Perdigao, and one of the few nationwide refrigerated distribution systems.

Like all Brazilian stocks, this one has sold off in the current retreat in the São Paulo market, with the New York-traded ADRs down 12.2% from May 14 through June 12.

The ADRs trade at 21.9 times projected 2013 earnings per share.

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Abbott Labs - infant nutrition -- >>> 10 food stocks with tasty potential


Jim Jubak

6-14-13


http://money.msn.com/stock-broker-guided/10-food-stocks-with-tasty-potential


Abbott Laboratories


Abbott Laboratories (ABT) is the closest thing to a value play you'll find in the infant nutritional space. Nutritionals made up about 30% of company sales, on a pro-forma basis, after the breakup of the company -- Abbott recently spun off its pharmaceuticals business, now called AbbVie (ABBV). That segment turned in 9% sales growth in the first quarter, but even with 45% of sales in that business coming from emerging markets, Abbott's margins trail those of its competitors.

Management's goal is to raise operating margins in nutritionals unit by 5 full percentage points by 2015. That, plus a companywide goal of raising emerging market sales to 50% of total sales (from 30% now) by 2015, should help fix the company's extremely low return on invested capital -- 10.2% for the last five years. (That figure is for the pre-breakup Abbott. The figure for Abbott Laboratories recently has been just 2%.) The shares trade at 18.05 times projected 2013 earning per share.

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Nestle -- >>> 10 food stocks with tasty potential


Jim Jubak

6-14-13


http://money.msn.com/stock-broker-guided/10-food-stocks-with-tasty-potential



Nestlé


With its purchase of Pfizer's (PFE) infant nutrition unit, Nestlé (NSRGY) became the biggest player in the infant nutrition business. It didn't hurt that Pfizer's group generated 85% of its sales from emerging markets. Nestlé has been working hard to increase its sales from faster-growing emerging markets, which now account for 45% of the company's sales.

In the most-recent quarter, Nestlé's sales in these markets grew by 8.4%, while sales in developed markets increased by less than 1%.

But Nestlé isn't just infant formula. The largest packaged food company in the world has top-tier market share -- 20 of Nestlé's brands generate more than 1 billion Swiss francs a year in annual sales -- in products from coffee to bottled water.

The category that interests me most going forward is bottled water, where Nestlé, remarkably, has been able to fight off Coca-Cola (KO) and PepsiCo (PEP).

The name of the game here is getting primary shelf space in stores, and Nestlé's brand clout lets the company do that.

Its American depositary receipts trade at 17.5 times projected 2013 earnings per share.

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Mead Johnson Nutrition -- >>> 10 food stocks with tasty potential


Jim Jubak

6-14-13


http://money.msn.com/stock-broker-guided/10-food-stocks-with-tasty-potential


Mead Johnson Nutrition


You get a good sense of the opportunities for selling baby formula to China by visiting any convenience store in one of the New York's Chinese neighborhoods. In Queens, for example, shop windows are stacked with cans of infant formula for sale to customers traveling back to China or for shipping by locals to relatives in China. That reflects just how much demand there is in China for overseas brands of infant formula that promise safety. (In 2008, six babies in China died and 300,000 became ill because of melamine contamination in infant formula. In 2010, Chinese authorities seized 64 tons of contaminated raw dairy materials.)

Last year, 75% of Mead Johnson Nutrition's (MJN) revenue came from sales of nutritional products for infants, children and expectant mothers outside the United States; China alone accounted for 30% of sales. (China/Hong Kong is now the company's No. 1 market, with the United States second and Mexico third.)

The company's sales in China/Hong Kong have doubled over the past three years, and the sales breakdown has shifted. Premium nutrition products now make up more than half of sales.

Mead Johnson's five-year return on capital is 41.3%, compared with 11.2% for its industry as a whole and 9.9% for the stocks in the Standard & Poor's 500 Index ($INX). The shares trade at 24.7 times projected 2013 earnings per share.

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Smucker -- >>> A More Diverse and Stable Coffee Play



By Matthew Frankel

May 29, 2013

Tickers: GMCR, SJM, MKC, SBUX


http://beta.fool.com/kwmatt82/2013/05/29/a-more-diverse-and-stable-coffee-play/35493/?source=eogyholnk0000001




When most people think of J.M. Smucker (NYSE: SJM), they think of the fruit spreads and peanut butter products that bear the “Smucker’s” name in the grocery store. But the company has evolved into a very diverse food company whose main source of revenue is coffee. As one of the largest producers of the increasingly popular “K-cups”, Smucker stands to benefit tremendously from the growth in their sales. My only reservation is that perhaps the company is a bit expensive after rallying by more than 35% in the past year.

About J.M. Smucker

Smucker operates in three major segments: coffee, consumer foods, and international, and foodservice and natural foods The coffee segment is the largest, and accounts for about 42% of the company’s revenues. This segment sells products under the Folgers brand name, which it acquired in 2008, as well as Dunkin Donuts packaged coffee and Millstone K-Cups.

Since 2010, Smucker and Green Mountain Coffee Roasters (NASDAQ: GMCR), the maker of Keurig coffee machines, have operated under a partnership agreement that lets Green Mountain manufacture K-Cups using Smucker's coffee brands, including the very popular Folgers Gourmet Selections. The increasing popularity of the Keurig brewers and the K-Cups they use have been great for both companies’ profits in recent years. In fact, once the market realized that even the expiration of Green Mountain’s patents wouldn’t hurt sales, shares of Green Mountain climbed from a low of $17 last year to over $70 currently.

The consumer foods segment consists of the Smucker’s, Jif, Pillsbury, and Crisco brands of grocery products. These brands are also produced, among others, in the international, foodservice, and natural foods segment for the company’s overseas customers.

Acquisitions

A major aspect of Smucker’s growth strategy includes acquiring brands that it believes will be valuable to this business. As mentioned before, the most significant coffee acquisition was the Folgers brand in 2008. Other major acquisitions include Rowland Coffee Roasters, which includes the Café Bustelo and Pilon coffee brands, and the Sara Lee brand just last year.

The Numbers Game

Taking a quick look at the numbers behind J.M. Smucker reveals a seemingly high P/E ratio of 21.8 times TTM earnings. The company is expected to earn $5.73 for the current year, rising to $6.29 and $6.90 in 2014 and 2015 respectively, for annual earnings growth of 9.8% and 9.7%. This growth rate is a little bit low to justify such a high valuation, but some of this could be due to speculation of Smucker being a takeover target, especially after Heinz received an offer, as they are a close peer size- and product-wise.

Alternatives

Let’s take a quick look at what you could invest in instead of Smucker. In the coffee business, Starbucks (NASDAQ: SBUX) is the logical play, and on the grocery side, McCormick (NYSE: MKC) is a good comparable company.

Starbucks is the world’s leading coffee roaster, and its coffee is sold through its 18,000-plus stores, as well as in grocery and other retailers throughout the world. The company, which arguably started the premium coffee craze, has done extremely well, more than tripling its revenues in the past decade alone.

As an investment, Starbucks' shares may be a little on the pricier side right now, at 32.2 times TTM earnings. I’m not sure that the forward growth rate of around 15% justifies such a high valuation, and Starbucks’ market may be getting a little bit saturated at this point. I have to think that its growth will start slowing down a bit in the coming years.

McCormick & Co is a play on the food business, a leader in spices, seasonings, and flavorings. About 60% of the company’s sales go to retail customers, with the other 40% go to foodservice customers such as restaurants. At around 24.1 times TTM earnings, McCormick may be a little expensive, with just 8% annual earnings growth expected over the next few years.

Buy, Sell, or Hold?

With exposure to the rapidly growing single-serve coffee industry as well as to the stable packaged food business, Smucker just may be an ideal compromise between the two. I would like to see shares pull back a bit, as I would with most stocks right now. But even at the current price levels, I believe Smucker has a lot to offer.

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Reeds -- >>> Reed's, Inc. Announces New Distribution Agreement for Canada


Reed's Retail Brand Presence to Expand Nationwide Across the Canadian Market


May 15, 2013



http://finance.yahoo.com/news/reeds-inc-announces-distribution-agreement-123000028.html



LOS ANGELES, CA--(Marketwired - May 15, 2013) - Reed's, Inc. (NYSE MKT: REED), maker of the top-selling sodas in natural food stores nationwide, announced today that it has formed a new distribution agreement with Lassonde Industries (TSX: LAS-A) based in Rougemont (Québec), Canada. Lassonde Industries Inc is a leader in the development, manufacture and sales of a wide range of fruit and vegetable juices and drinks throughout Canada and the United States. This new agreement gives Lassonde Inc the rights to distribute the Reed's family of brands throughout the entire country of Canada.

Neal Cohane, Senior Vice President of Sales & Marketing for Reed's, stated, "Our partnership with Lassonde Industries is extremely exciting and a huge step forward for the development of our brands in Canada. Lassonde's success is based largely on their highly skilled sales force and their extensive, intricate distribution network, which reaches almost every chain supermarket, convenience store and independent retailer throughout Canada. We anticipate significantly increasing our retail footprint in the coming months in Canada, and look forward to working with Lassonde to make Reed's and Virgil's nationally recognized brands in the Canadian marketplace."

Chris Reed, Founder and CEO of Reed's, Inc., commented, "In Canada, our brands have primarily been found in small, niche, natural retailers on the west coast. It is a significant testament to the success of Reed's brands that we have negotiated a partnership with Lassonde Industries, a 'giant' in the fruit juice and drink industry in Canada. We have always believed that Canada has been a marketplace ripe for our brands to flourish. This new partnership will be the catalyst to significantly enhance our revenue in the future."

About Lassonde Industries Inc.

Lassonde Industries Inc. is a North American leader in the development, manufacture and sale of a wide range of fruit and vegetable juices and drinks marketed under brands such as Everfresh, Fairlee, Flavür, Fruité, Graves, Oasis and Rougemont.

Lassonde is also the second largest producer of store brand ready-to-drink fruit juices and drinks in the United States and a major producer of cranberry juices, drinks and sauces.

Lassonde also develops, manufactures and markets specialty food products under brands such as Antico and Canton. The Company imports and markets selected wines from various countries and manufactures apple ciders and wine-based beverages.

The Company produces superior quality products through the efforts of some 2,000 people working in 14 plants across Canada and the United States. To learn more, visit: www.lassonde.com

About Reed's, Inc.

Reed's, Inc. makes the top-selling natural sodas in the natural foods industry sold in over 13,000 natural food markets and supermarkets nationwide. Its six award-winning non-alcoholic Ginger Brews are unique in the beverage industry, being brewed, not manufactured and using fresh ginger, spices and fruits in a brewing process that predates commercial soft drinks. The Company owns the top-selling root beer line in natural foods, the Virgil's Root Beer product line, and the top-selling cola line in natural foods, the China Cola product line. In 2012, the Company launched Reed's Culture Club Kombucha line of organic live beverages. Other product lines include: Reed's Ginger Candies and Reed's Ginger Ice Creams. In 2009, Reed's started producing private label natural beverages for select national chains. Reed's products are sold through specialty gourmet and natural food stores, mainstream supermarket chains, retail stores and restaurants nationwide, and in Canada, as well as through private label relationships with major supermarket chains.

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Lancaster County Corp - profile -



http://finance.yahoo.com/q/pr?s=LANC+Profile



>>> Lancaster Colony Corporation engages in the manufacture and marketing of consumer products focusing primarily on specialty foods for the retail and foodservice markets in the United States. The company operates in two segments: Specialty Foods; and Glassware and Candles. The Specialty Foods segment manufactures and sells food products, including salad dressings and sauces under the Marzetti, T. Marzetti, Cardini?s, Pfeiffer, Simply Dressed, and Girard?s brands; fruit glazes, vegetable dips, and fruit dips under T. Marzetti brand; Greek yogurt vegetable dips under the Otria brand; frozen breads under New York BRAND and Mamma Bella brands; frozen Parkerhouse style yeast dinner rolls and sweet rolls, as well as biscuits under the Sister Schubert?s, Marshall?s, and Mary B?s brands; premium dry egg noodles under the Inn Maid and Amish Kitchen brands; frozen specialty noodles and pastas under the Reames and Aunt Vi?s brands; croutons and related products under the New York BRAND, Texas Toast, Chatham Village, Cardini?s, and T. Marzetti brands; and caviar under the Romanoff brand. This segment markets its products through sales personnel, food brokers, and distributors to retail, club store, foodservice, and industrial markets. The Glassware and Candles segment produces and markets candles, candle accessories, and other home fragrance products in various sizes, forms, and fragrances in retail markets to mass merchants, supermarkets, drug stores, and specialty shops under the Candle-lite brand name. This segment also sells candles, glassware, and various other products to customers in commercial markets consisting of restaurants, hotels, hospitals, and schools. The company was founded in 1961 and is based in Columbus, Ohio.

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Church & Dwight -- >>> Prospecting for Safe Stock Gains Part 1 -



By Reuben Brewer

May 17, 2013

Tickers: CHD, BEN, PTP



http://beta.fool.com/reubengbrewer/2013/05/17/prospecting-for-safe-stock-gains-part/34468/?source=eogyholnk0000001



Prospector Opportunity Fund (POPFX) is a top ranked fund by Morningstar (five stars). Although it is a decent fund in good markets, it is the down markets in which it excels by protecting investors from the steep losses that its peers often experience. Three companies the fund's managers like for their combination of upside potential and downside protection are Platinum Underwriters (NYSE: PTP), Franklin Resources (NYSE: BEN), and Church & Dwight (NYSE: CHD).

OK Upside, Great Downside

Although nobody likes to lose money, co-managers Kevin O'Brien, Richard Howard, and John Gillespie certainly did their shareholders a favor by avoiding the worst of the market's huge downturn in 2008. The fund was “only” down 19%, while the market was off more than double that at nearly 40%. Avoiding big pain in that year has helped the fund earn a nearly 8% annualized return since its September 2007 launch, outpacing its Russell 2000 Total Return Index benchmark by over three percentage points through March of this year.

Looking for Value

The fund has a value orientation and builds its portfolio from the bottom up. Key factors in the purchase process include a review of a company's balance sheet strength, management quality, products and/or services, overall franchise or brand value, and an assessment of the company's business model. The co-managers also look specifically for a catalyst that will lead to improved performance, such as a change in management, corporate actions (a unit sale), or changing industry fundamentals.

However, Kevin O'Brien highlighted in my interview with him a single question that the co-managers ask that helps explain the fund's solid long-term performance: “If this doesn't work, how much will we lose.” The trio wants to ensure that they don't get so caught up in the upside that they lose sight of the risks of an investment.

Here are three stocks the co-managers like today based on their upside potential and their downside protection:

Insurance for Insurance

Platinum Underwriters is a reinsurer operating in the property, marine, casualty, and finite risk markets. It has a global footprint and a generally conservative management team. For example, O'Brien notes that the insurer would rather not write business than sell unprofitable policies.

While that can mean walking away from business, it also means more stable long-term performance. In fact, management would rather buy back shares than get into a price war. Although industry pricing is good today, over the last six years or so, the company has bought back around half its outstanding shares.

That type of shareholder friendly action is just one reason to like Platinum. The other is that O'Brien believes it is trading at a discount to his estimate of its true worth. A conservatively run business, in a recovering market, selling at a discount. No wonder the co-managers still like Platinum despite a solid share advance over the last year.

Cash on Hand

Franklin Resources is a global asset manager. Although it has offices in 35 countries, its client list spans over 150 nations. It has over $800 billion in assets under management (AUM) and claims to be the largest cross border fund manager in the world.

This positions the company well to take advantage of the growing middle class around the world. That's a key focus area for management and one that looks particularly promising in emerging economies with high savings rates, like Asia where Franklin sees the potential for nearly 500% growth in the fund market.

O'Brien highlights the potential for the asset manager to benefit in the U.S. market if investors start shifting money toward stocks after a long period of cash flowing into bonds. Stock AUM earn the company higher fees.

The co-managers also like that the stock has historically traded around 20 times earnings, but currently sits around 15 times. The low end of its range is 12 times, so there isn't too much downside risk at current price levels. Add in what O'Brien estimates is about $40 per share in cash or liquid investments sitting on the balance sheet, and the risk/reward profile looks even better.

Extensions

Church & Dwight is another company that the co-managers like today. The industry in which it operates, consumer staples, has historically been a stable one. So that's a plus. However, not all companies in the space are created equal.

What impresses O'Brien is Church & Dwight's ability to take old brands and extend them into new markets. The best example of that is probably Arm & Hammer Baking Soda. That product line has been extended into toothpaste, kitty litter, and laundry detergent, among others. This outside the box thinking is perhaps the company's biggest asset.

Church & Dwight has been able to push growth internally, but has also proven an excellent acquirer. For example, the late 2012 addition of Avid Health looks to O'Brien to be a classic brand extension candidate. Avid is a leader in the gummy vitamin market. While this sounds like a product for kids, the adult market is ripe for the picking--particularly as baby boomers become increasingly concerned with their health.

Two other things to like about the company are its low level of debt and valuation. O'Brien believes that recent acquisition activity in the consumer products industry suggests a share price in the $80 range for Church & Dwight.

Up and Down

Investors often get so caught up in the potential for gains that they forget about the risk of losses. Prospector Opportunity Fund's management team always keeps both in the back of their minds, a fact that the above examples clearly demonstrate.

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>>> Tide starts to turn against defensive stocks

What nascent sector rotation means for your portfolio



By J.J. Zhang

May 14, 2013


http://www.marketwatch.com/story/tide-starts-to-turn-against-defensive-stocks-2013-05-14?siteid=bigcharts&dist=bigcharts



One of the more unusual trends in the current market rally has been the sector-by-sector performance. While most strong market rallies like the one we are currently in are typically driven by cyclicals and growth sectors, the current rally has instead been characterized by outperformance of noncyclicals or defensives.

Best of MarketWatch

Here's the one other story that you can't afford to miss today /conga/story_of_the_day.html 262589
As I had pointed out in a previous article, cyclicals typically outperform noncyclicals or defensives during market rallies. Looking at rallies from the last 10 years, sectors such as materials and technology outperformed the S&P by 2%-5% while defensives such as utilities and consumer staples underperformed by 6%-7%.

The current rally has turned that trend on its head as sectors such as consumer staples /quotes/zigman/246134/quotes/nls/xlp XLP -0.43% has returned over 22% since the November low versus the S&P 500 /quotes/zigman/714403/quotes/nls/spy SPY +0.41% at 21% while growth sectors such as technology /quotes/zigman/1475411/quotes/nls/xlk XLK +0.39% are at only 16%.

If you had invested in defensives from the beginning, you’re likely relishing the year-to-date portfolio returns while those in tech have languished. However, within the past few weeks, indications of a sector rotation between the cyclicals and defensives may indicate change is afoot.

Trend changes
One possible reason for the recent outperformance of defensives may be the search for yield as demand for reliable dividend-paying stocks pushes up their prices.

As the Fed’s QE policy continues and other countries such as Japan start their own QE programs, there is a flood of money looking for returns. With bond yields at a record low and the risks of bond prices dropping in the future once interest rates inevitably rise, there are precious few alternatives besides dividend-paying stocks left.


However, reversion to the mean is a very real phenomenon and the valuations and yields that made defensives attractive initially have weakened significantly during the run up.

For example, the consumer staples sector ETF had a P/E ratio of 14 during the November market bottom but is now sitting at 18. Similarly, its trailing yield has dropped from 3.2% to only 2.6% today. In contrast, the underperforming industrials sector currently sits at a low 14 P/E and a 2% yield. The benchmark S&P 500 is at 15.5 for P/E and a 2% yield.

Looking at the weekly gains by sector for this entire rally, the last 3 weeks have seen a reversal of trends. Look at the gain difference between cyclical sectors (in this case, an average of industrials, materials and technology) versus the defensive sectors (utilities and consumer staples): Last week cyclicals gained 1.9% while defensives lost 1.3% for a 3.2% delta.

While cyclicals outperformed defensives at the beginning of the rally by 1%-2% per week, the defensives dominated for the majority of the rally from January to April, beating by 1%-4%.

However, in the last 3 weeks, that trend has strongly reversed with cyclicals now starting to outperform defensives by a significant 2%-3% gain per week. In just 3 weeks, those cyclicals have caught up by almost 7%. However, even with those gains, they are still underperforming both the defensives and the S&P 500 for this rally.

Full speed ahead?
A sector rotation into underperforming sectors is actually in a good sign of a healthy market. A common indicator for market tops is decreasing breadth where the market advance is dominated by a few select stocks while the rest start to drop.

As well, increasing overvaluation in concentrated sectors is another red flag. Rotation of money and interest into the undervalued or lesser valued sectors helps reduce the frothiness of the overall market.

While that does not mean the market rally will continue, especially as we enter the traditionally slow summer months, it is at least a small positive sign.

So what portfolio actions would this suggest? If you’ve been doing portfolio rebalancing or broad market indexing, you’ll likely benefit naturally from the rotation. However, for those who are still highly exposed to defensive sectors or those with low exposure to cyclicals, rebalancing may be an option.

While it’s not always prudent to chase after potential outperformers or jump on bandwagons, the valuation changes due to the now six-month rally do lend credence to at least rebalancing your sector exposure. Doing so will help mitigate mean reversion effects and also allow you to benefit from any sector rotation that have and may continue to occur.

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