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Key Takeaways:
- Campbell’s stock offers a 5-year-high 5.0% dividend yield and a payout ratio just over 50%, supported by stable earnings from household food brands.
- The dividend has not grown since 2021, but it remains well-covered and consistent, even during tough market conditions.
- With potential total returns of 18.4% by 2027, CPB may appeal to investors looking for reliable income and modest upside from a defensive stock.
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Campbell’s isn’t the flashiest stock on the market, but it plays a steady role in millions of households.
With well-known, shelf-stable brands like Campbell’s Soup, Goldfish, Prego, and V8, the company brings in consistent cash flow from affordable food products that hold up well during tough economic times.
Still, the stock is down over 30% in the past year as investors pulled back from packaged food companies dealing with inflation, higher costs, and slowing demand.
Even so, Campbell’s core business remains strong. The stock now offers a 5.0% dividend yield, one of the highest in the consumer staples space, and the stock might have room to rebound if investor confidence improves.
Analysts Think the Stock Is Slightly Undervalued Today
Campbell’s shares trade around $31, while our valuation model based on analysts’ estimates proposes that the stock could have a fair value of $37/share by mid-2027.
That implies a total return of 18.4% over the next two years, or 8.6% annually, if earnings remain stable and the stock re-rates slightly higher.
Campbell’s looks like a strong dividend income play with the potential for some upside.
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Campbell’s Offers a 5-Year-High 5% Dividend Yield
Campbell’s dividend yield has climbed to 5.0%, well above its 5-year average of 3.4%. This increase isn’t because of a bigger payout, but because the stock has fallen in recent months.
The drop came as inflation and rising input costs, such as ingredients, packaging, and labor, put pressure on margins. At the same time, consumers began shifting toward cheaper private-label products, cutting into sales of Campbell’s name-brand packaged foods.
For dividend income-focused investors, this might be a good time to lock in a strong yield from a dependable food company.
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Campbell’s Dividend Looks Safe with Room to Grow
Campbell’s dividend has stayed consistent at $1.48 per share for several years, but that is beginning to change.
The dividend is expected to increase to $1.54 for 2025 and analysts expect the dividend to continue to rise to $1.60 in 2026 and $1.70 in 2027. These increases align with a slow but steady earnings recovery, with normalized EPS projected to rise to $3.09 by 2027.
Even though earnings have been essentially flat for the past several years, Campbell kept its dividend payout well covered. The dividend remained at around 50% of earnings, which is a healthy level for a stable consumer staples company. If earnings hit expectations over the next two years, the payout ratio should stay reasonable while allowing for modest dividend growth.
For income-focused investors, Campbell offers a combination of reliability and upside. The stock’s current 5 percent yield is supported by a business that generates steady cash flow and is starting to regain earnings momentum.
See Campbell’s full growth forecast and analyst estimates. (It’s free) >>>
TIKR Takeaway
Campbell’s stock looks to be trading at a slight discount today while offering a 5-year high dividend yield of 5.0%. The stock could be worth a closer look for dividend investors!
The TIKR Terminal offers industry-leading financial data on over 100,000 stocks and was built for investors who think of buying stocks as buying a piece of a business.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
