Which High Do You Prefer?

Do you prefer a company with high profitability, high revenue, high income, high dividends, high market share, high cash flow, etc. Aren’t all these highs depicting a good picture about any given company’s state of business? We can find an answer to this in the concept of value investing i.e. wide moat and under pricing. These are the two key ingredients for value investing. Here, the concept of wide moat and under pricing is in the context of its business environment or competition. It is a relative term. Similarly, when we think about any given company’s financial metric, we need to look at it in relative terms. High profitability or high income, or high EPS growth rate as a standalone does not provide a true picture.

We can get a true picture by looking for consistency. Two simple statistical measures of average and standard deviation can help us measure consistency. A standard deviation that is narrow and lower than average is a good observation. The table below shows some examples of randomly selected financial metric for few companies. continue reading rest of the article….

Campbell Soup Co. – Stock Analysis for Dividend Growth Portfolio

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Campbell Soup Company (CPB), and its subsidiaries, does business in manufacture and marketing of branded convenience food products worldwide. It has four business segments, viz., (1) U.S. Soup, Sauces, and Beverages; (2) Baking and Snacking; (3) International Soup, Sauces, and Beverages; and (4) North America Food Service. The company was founded in 1869 and is headquartered in Camden, New Jersey.

CPB is neither a dividend aristocrat nor a dividend achiever. CPB has been paying dividends since 1980, albeit it has not been growing it consistently. My objective here is to understand if CPB has any potential to be a dividend growth investment.

Trend Analysis

This section looks at trends for past 10 years of corporation’s revenue and profitability. These parameters should show consistently growth trends. The trend charts and data summary are shown in images below. continue reading rest of the article….

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