June 19, 2025 a 07:46 am
CPB: Dividend Analysis - Campbell Soup Company
Campbell Soup Company (CPB) has maintained a steady dividend payout over many years, and its current dividend yield is attractive to income-focused investors. Despite the high EPS-based payout ratio, the company demonstrates a commitment to shareholder value through consistent dividend payments. However, potential investors should be cautious of its high debt levels and consider the minimal recent dividend growth rates.
📊 Overview
The Campbell Soup Company operates in the consumer staples sector, renowned for its stability and demand in all economic conditions. With a current dividend yield of 4.84% and a steady history of dividend payments over 42 years, the company proves its dedication to rewarding shareholders. However, the last dividend adjustment indicates a stable but stagnant growth trend.
| Sector | Dividend Yield | Current Dividend per Share | Dividend History | Last Cut or Suspension |
|---|---|---|---|---|
| Consumer Staples | 4.84% | $1.48 | 42 years | None |
📉 Dividend History
Sustained dividend payments reflect the financial strength and commitment to shareholders. Understanding this history is crucial for evaluating the reliability of future payouts. Consistency over such a prolonged period highlights the company's resilience.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.17 |
| 2024 | 1.48 |
| 2023 | 1.48 |
| 2022 | 1.48 |
| 2021 | 1.48 |
📈 Dividend Growth
While not showing growth over the past three years, the overall minimal growth in dividends suggests conservative financial strategies which could balance payout commitments with other business needs. Investors should weigh this moderate growth against the relative safety of such investments.
| Time | Growth |
|---|---|
| 3 years | 0% |
| 5 years | 1.12% |
The average dividend growth is 1.12% over 5 years. This shows moderate but steady dividend growth.
🗣️ Payout Ratio
The payout ratio provides insights into how sustainable the dividend payments are against the company's earnings and cash flow. High EPS payout ratios suggest pressure on earnings to sustain dividends.
| Key figure | Ratio |
|---|---|
| EPS-based | 97.36% |
| Free cash flow-based | 54.73% |
The high EPS-based payout ratio of 97.36% may raise concerns about sustainability without robust earnings growth. However, the cash flow-based payout at 54.73% indicates better coverage via operational cash flow.
💰 Cashflow & Capital Efficiency
Cash flow analysis is imperative to gauge the company's ability to cover dividends and reinvest in growth initiatives. Key efficiency ratios provide insights into capital allocation strategies and potential areas of improvement.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 4.74% | 5.64% | 6.29% |
| Earnings Yield | 4.02% | 6.26% | 5.07% |
| CAPEX to Operating Cash Flow | 43.63% | 32.37% | 20.49% |
| Stock-based Compensation to Revenue | 1.03% | 0.67% | 0.69% |
| Free Cash Flow / Operating Cash Flow Ratio | 56.37% | 67.63% | 79.51% |
| Return on Invested Capital | 5.69% | 9.88% | 9.14% |
CPB shows adequate cash flow management; however, the declining Free Cash Flow Share Ratio suggests increased investment or operational cost pressures recently.
⚠️ Balance Sheet & Leverage Analysis
Understanding balance sheet health is vital to evaluating the company's financial resilience and ability to meet long-term obligations. Key leverage metrics offer insight into potential financial risk.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.99 | 1.36 | 1.52 |
| Debt-to-Assets | 49.50% | 41.19% | 42.45% |
| Debt-to-Capital | 66.53% | 57.57% | 60.25% |
| Net Debt to EBITDA | 5.27 | 2.81 | 3.29 |
| Current Ratio | 0.61 | 0.93 | 0.68 |
| Quick Ratio | 22.48% | 34.65% | 24.84% |
| Financial Leverage | 4.02 | 3.29 | 3.57 |
While Campbell Soup Company's leverage metrics indicate a heavy reliance on debt, improvements in Net Debt to EBITDA in 2023 are a positive sign for stabilizing leverage.
✅ Fundamental Strength & Profitability
Profitability and return ratios can highlight operational efficiency and management’s ability to deliver returns. Margins provide insights into cost management and pricing power.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 14.94% | 23.44% | 22.73% |
| Return on Assets | 3.72% | 7.12% | 6.37% |
| Net Margin | 5.88% | 9.17% | 8.84% |
| EBIT Margin | 10.38% | 14.02% | 13.58% |
| EBITDA Margin | 14.64% | 18.16% | 17.52% |
| Gross Margin | 30.83% | 31.17% | 30.68% |
| R&D to Revenue | 1.06% | 0.98% | 1.02% |
Campbell Soup Company presents strong profitability metrics, particularly its return on equity, demonstrating efficiency in converting capital into profit. Margins remain robust, though some volatility is present.
📈 Price Development
🔍 Dividend Scoring System
| Criterion | Score | Rating |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend growth | 2 | |
| Payout ratio | 3 | |
| Financial stability | 3 | |
| Dividend continuity | 4 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 3 |
Total Score: 27/40
💬 Rating
Campbell Soup Company represents a relatively safe dividend-paying stock in the consumer staples sector. Its high yield and long history of consistent dividends make it attractive for conservative, income-focused investors, though the lack of recent dividend growth and relatively high payout ratios suggest caution. The overall financial stability and profitability are satisfactory, supporting moderate recommendations for those seeking reliable income with limited growth expectations.