The board of B&G Foods, Inc. (NYSE:BGS) has announced that it will pay a dividend of $0.19 per share on the 30th of July. This dividend payment will result in a dividend yield of 9.1% on the company’s stock, providing a significant boost to shareholder returns.
B&G Foods’ earnings easily cover the distributions, with free cash flows exceeding the dividend amount. This indicates that the company has the ability to sustain its dividend payments and reinvest in its business.
Looking ahead, earnings per share are expected to increase significantly in the next year. With a projected payout ratio of 3.6%, the sustainability of the dividend is deemed to be secure.
Despite the company’s long history of paying dividends, there has been a decrease in the annual payment over the past decade. This downward trend raises concerns about the reliability of the dividend.
Furthermore, earnings per share have been declining by 56% over the last five years, which could potentially impact future dividend payments. While there are predictions of earnings growth in the next 12 months, caution is advised until this becomes a consistent trend.
Overall, B&G Foods may not be an ideal dividend stock due to its inconsistent dividend history and declining earnings. Investors should consider other factors when evaluating stock performance.
It is important to note that companies with a consistent dividend policy tend to inspire more investor confidence. However, it is essential to conduct thorough analysis before making investment decisions.