In this article, you will get all information regarding Kellogg stock could double its dividend: Just about, anyway
the Kellogg-Aktien (WKN: 853265) continues to be a notable dividend stock. Even if it’s not necessarily aristocratic, the breakfast group is still a historical distributor. Management has been paying dividends to investors for almost 100 years. That’s really very strong.
What’s remarkable for me after the figures for the second quarter is the following realization: Kellogg stock could even double its own dividend on the fly. Although scarce, but that shows directly or indirectly a lot of return potential.
Kellogg Stock: The Double Dividend?
The current dividend yield of the US company, which is known for breakfast cereals, pop tarts and other snacks, is already anything but irrelevant. Measured against the $0.59 per share that has now been announced, the value is finally around 3.14%. Nevertheless, this also shows that management has only moderately increased the payout per share by less than 2%.
But there would be potential for a lot more growth in Kellogg stock. In the second quarter, the US company posted adjusted earnings per share of $1.18. An increase in earnings of 3.5% has now shown this value. That would in turn be exactly enough to double the dividend per share.
Adjusted for currency effects, however, even more would be possible. Under this premise, the Kellogg share would come to $ 1.23 earnings per share. These are strong values that show: A double dividend yield and thus a 6% dividend yield would be possible. However, management is likely to prioritize consistent payouts rather than strong dividend growth.
It shows how cheap the valuation is
However, reflections on Kellogg stock show how cheap the fundamental valuation is overall. The US company can do more than just a 3.1% dividend yield. With a price/earnings ratio of currently 16 on the basis of the last quarter, the valuation measure is rather moderate to inexpensive. The earnings yield should also be around 6% per year. And that’s if we only assume constant earnings per share.
However, there is moderate growth. Kellogg was recently able to show off its own qualities and a little bit of pricing power. This means that the fundamental valuation is quite attractive and can mean higher returns. Decide for yourself whether the overall package is sufficiently attractive for you. Even if there shouldn’t be a double dividend any time soon.
The article Kellogg stock could double its dividend: So straight, anyway, first appeared on The Motley Fool Germany.
Vincent owns shares of Kellogg. The Motley Fool does not own any of the stocks mentioned.
Motley Fool Germany 2022
Kellogg stock could double its dividend: Just about, anyway
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