Campbell Soup starts pouring out dividends

Warm soup, grilled cheese, and enough saltine crackers to choke a medium size horse. If you’re like me, you have great memories of Campbell tomato soup, or perhaps you had cans of chicken noodle soup chucked at you when you lied about being sick to stay home from school. Either or, Campbells has been a part of the American landscape for decades, and borderline centuries.

The people who don’t have fond memories of Campbells however, are those who bought in at $66.62 thinking they struck gold in a can, but instead end up with a 104 week low of $33.28, the equivalent of putting salt in an already mostly salt chicken noodle broth. But now, like the very soups they sell, $CPB could be for sale. A recap of highlights from the past few quarters, in no particular order:

  • In May, they had their CEO leave
  • Missed revenue expectations that same day by $10M
  • Named specifically in political battles regarding tariffs and corporate profitability
  • A slump in packaged foods category as a whole
  • Downgrade from Bank of America / Merrill Lynch
  • Kraft / Heinz says “Nahh, we’re not going to have the soup today” in regards to a possible merger or acquisition
  • Not even Reggie Bush’s mom could make this stock any more chunkier

$CPB did however buy Snyder-Lance, makers of snack foods, and the pretzel nuggets / sourdough bites that go so well with a nice queso during the Superbowl. This acquisition added some immediate and much needed cost synergies, saving the company nearly $170M. So stock up the vending machines and keep getting people to pay a premium for those little nuggets of joy.

Overall, $CPB is an interesting play. You can love the company, but hate the stock, and that seems to mirror the general consensus on the street. They have a massive debt load of $9.8 billion, with just about $200M in the bank, and that is like taking cold soup out of the microwave.

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