McCormick &
Co is a leading manufacturer, marketer and distributor of spices, seasonings,
flavorings and other specialty food products for consumer, industrial and
foodservice markets. The company has
grown profits and dividends at a 10-11% annual pace over the past 10 years
earning a 20%+ return on equity. MKC
should be able to sustain this record because:
(1) a major cost
reduction program,
(2) introduction
of new products [e.g. World Flavors that allows consumers an easy way to
prepare restaurant style ethnic foods at home],
(3)
international expansion,
(4) acquisitions
that support its brands,
Negatives:
(1) rising raw
material costs,
(2) its
international business exposes it to currency fluctuation risk,
(3) it maintains
high inventories [costs] due to its inability to hedge raw material.
McCormick is
rated A by Value Line, has a 37% debt to equity ratio and its stock yields 2.2%.
Statistical Summary
Stock Dividend Payout
# Increases
Yield Growth Rate Ratio
Since 2002
Debt/ EPS Down Net Value Line
Equity ROE Since 2002 Margin Rating
Chart
Note: MKC stock
made great progress off its March 2009 low, quickly surpassing the downtrend
off its August 2008 high (red line) and the November trading high (green
line). Long term, MKC
is in an uptrend (straight blue lines),
Intermediate term it is in an uptrend (purple lines). The wiggly blue line is on balance
volume. The Dividend Growth Portfolio
does not own MKC stock. The upper boundary of its Buy
Value Range Sell
Half Range
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