05-14-2014, 09:39 PM
I just ran K through my screen for the first time ever. While it scores a respectable 63, it is hard for me to get very excited about it.
I think I have the same reaction to K as I have to DPS. On paper, it is a fine company, but the stable of brands is not all that deep and appealing to me. I worry about the ability of these companies to grow earnings into the future at a solid pace.
Earnings growth may be picking up for K, which would make this a great time to get in, though I found their earnings reports a bit tough to decipher. Lots of adjustments and mark-to-market nonsense.
The five-year dividend growth rate is indeed between 6 and 7 percent, but had been nowhere near that the past few years. More like 3 to 4 percent. If they truly are on track to earn $4.00 or so this year, then they could give a healthier dividend raise come Q3 than the past few years, but very hard to predict.
At the end of the day, the combination of unexciting yield with unexciting dividend growth would keep me on the sidelines with this one. But if they deliver a much bigger divvy raise come Q3, and if earnings growth seem to really be accelerating, I'd give it another look.
I think I have the same reaction to K as I have to DPS. On paper, it is a fine company, but the stable of brands is not all that deep and appealing to me. I worry about the ability of these companies to grow earnings into the future at a solid pace.
Earnings growth may be picking up for K, which would make this a great time to get in, though I found their earnings reports a bit tough to decipher. Lots of adjustments and mark-to-market nonsense.
The five-year dividend growth rate is indeed between 6 and 7 percent, but had been nowhere near that the past few years. More like 3 to 4 percent. If they truly are on track to earn $4.00 or so this year, then they could give a healthier dividend raise come Q3 than the past few years, but very hard to predict.
At the end of the day, the combination of unexciting yield with unexciting dividend growth would keep me on the sidelines with this one. But if they deliver a much bigger divvy raise come Q3, and if earnings growth seem to really be accelerating, I'd give it another look.