Portfolio Update
The FiveTwenty portfolio received $116.73 dividends in the past week. ADM, EMR, and JNJ paid their quarterly dividend during the week.
| Past Week Dividend | $116.73 |
| Current Quarter Dividend (Q4 2022) | $1,157.18 |
| LifeTime Dividend | $7,452.46 |
| Estimated Annual Dividend | $7,516.61 |
The capital allocation for the week of 12/11/2022 to 12/11/2022 will be used to add to our position in Kellogg Co (NYSE: K).
K – Position Update
Since our last check-in on K in week 11 of 2022, the company reported Q1 2022 earnings on 05/05/2022, Q2 2022 earnings on 08/04/2022, and Q3 2022 earnings on 11/03/2022. Additionally, the share price increased 20.9% from $59.85 to $72.34.
| TTM | Prev. Update | 10-year median | |
| Dividend Streak | 19 years | 18 years | |
| Yield | 3.23% | 3.88% | 3.18% |
| Payout Ratio | 56.80%1 | 55.64%2 | |
| P/E | 17.561 | 14.352 |
1 computed using TTM adjusted EPS of $4.12 as of Q3 2022
2 computed using TTM adjusted EPS of $4.16 as of Q4 2021
Q3 2022 earnings report
Did K’s latest earnings report raise any warning flags?
For Q3 2022, K had strong sales growth due to positive price/mix. The company did well to mitigate negative impacts of high inflation and bottlenecks. Furthermore, K continues to work towards the planned separations of its North America cereal and plant-based businesses. Overall, revenue grew 9%, adjusted operating profit decreased 0.2%, and adjusted EPS were 7.3% lower than in Q3 2021.
| Revenue (in millions) | Adj. Operating Profit (in millions) | Adj. EPS . | |
| Q3 2021 | $3,622 | $449 | $1.09 |
| Q3 2022 | $3,946 | $449 | $1.01 |
| % Change | 9% | (0.2)% | (7.3)% |
Additional noteworthy developments during the quarter:
- On 10/28/2022 K declared a dividend of $0.59 per share payable on 12/15/2022 to shareholders of record at close of business on 12/01/2022.
Looking ahead, K expects net sales growth of +10%, operating profit growth of +6%, and adjusted EPS growth of +3% on a currency-neutral basis. Additionally, it expects capital expenditure of $0.5 billion on cash flow of $1.2 billion.
Thesis
Why are we adding to our position in K?
K’s core business has done well during the first 3 quarters of 2022. The company has navigated the high inflationary environment and currency headwinds during the beginning of the year. This confirms our belief in the long-term prospects of the company.
Previous Articles
- 2022 Week 11: Kellogg Co. (NYSE: K)
- 2021 Week 40: Kellogg Co. (NYSE: K)
- 2021 Week 21: Kellogg Co. (NYSE: K)
Photo by Haley Owens on Unsplash
One Reply to “2022 Week 50: Kellogg Co. (NYSE: K)”
Comments are closed.