+ 4.95
+ 1.63%
+ 5.70
+ 1.84%
+ 7.28
+ 1.93%
+ 0.38
+ 0.27%
+ 0.19
+ 0.12%

3 Reasons To Be A Long-Term Bull For Campbell Soup

February 7, 2014 11:51 am
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
3 Reasons To Be A Long-Term Bull For Campbell Soup

There is much to be said for defensive stocks like Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), and Campbell Soup (NYSE: CPB), among others. Every portfolio needs stocks that will rise with the market, but provide a bulwark in a correction or bear market. For Campbell Soup, there are three reasons for long-term investors to consider the stock.

For Warren Buffett, return-on-equity is paramount, according to his biographer Carol Loomis in an interview with American Association of Individual Investors. When asked, she replied that, "It is one of the things he believes in strongly: that a company capable of producing a good return on equity and doing it consistently is the kind of company you want to be in. It’s just a good marker to see what kind of company it is. A company with a standard balance sheet that can make 20% return on equity is a jewel. That’s the kind of thing that investors should be looking for."

The return-on-equity for Campbell Soup is 30.50 percent.

Related: An Amazing Show Of Strength For Southwest Airlines

Also 50 percent higher is the dividend yield than that for a member of the S&P's 500 Index or around two percent. The dividend yield for Campbell Soup is just over 3.1 percent. Both McDonald's and Wal-Mart have dividend yields that are higher than the S&P's 500 Index average.

Where Campbell's is below the average is in its beta.

The beta for the stock market as a whole is 1. As detailed in another article on Benzinga, studies have show that stocks with lower betas perform better over the long term. The beta for Campbell Soup Company is 0.39. That means that the share price for Campbell's moves up and down less than half as much as the stock market.

That results from its shareholders not wanting to sell.

With the high dividend yield and robust return-on-equity, those owning the stock have reason to be satisfied. Campbell is about 11 percent above it 52 week low. So for those looking to buy when a publicly traded company is near its year low, there are three reasons to be bullish for the long term about Campbell Soup.

Related Articles

Soup Sector Is Bullish Despite Bearish Results From Campbell Soup

Earnings Expectations for the Week of May 20

Campbell Soup Earnings Preview: Double-Digit Revenue Growth Expected

Low-Calorie Restaurant Offerings, a Better Bottom Line?