Money Tree Portfolio: Investing In J.M. Smuckers Company (SJM)

By | October 1, 2013

Investing In J.M. Smuckers Company (SJM). For more information about the money tree portfolio, click here


Company Profile: Smuckers (SJM) manufactures and markets products under such as Smuckers jelly, Crisco, Folgers coffee, Jiff peanut butter, Laura Scudder’s, Hungry Jack, Eagle, and Pillsbury, among others. Smuckers also produces and distributes Dunkin’ Donuts coffee while producing an assortment of cooking oils, toppings, juices, and baking ingredients. Smuckers is great at revitalizing old brands such as Folgers and Jif. They have done so by improved marketing, channel distribution, and a better overall focus on the positioning of these brands. This company aims to sell the number one brand in its various markets, and it does a great job in doing so. Smuckers company operates in the United States, Canada, and Europe with 90% of its sales coming in domestically (U.S.) and 10% from overseas. With revenues of $5.8 billion and growing, SJM is doing something right.

smuckers logo

Key Financials:

Market Cap (intraday)5: 11.08B
Enterprise Value (Oct 1, 2013)3: 12.96B
Trailing P/E (ttm, intraday): 20.28
Forward P/E (fye Apr 30, 2015)1: 16.68
PEG Ratio (5 yr expected)1: 2.28
Price/Sales (ttm): 1.88
Price/Book (mrq): 2.18
Enterprise Value/Revenue (ttm)3: 2.21
Enterprise Value/EBITDA (ttm)6: 10.67

Why invest in Smuckers?
Smuckers has been able to successfully manage America’s favorite brands and revitalize others. The most prominent being the former Procter & Gamble food brands and International Multifoods brands. Regardless to say, the management knows what its doing in the food business. In addition, SJM is experimenting with new ways to package and deliver food such as a jar-free peanut butter and healthier food categories. This should grow sales and profit margins, so it is promising to see an established company such as Smuckers try to innovate food like this. SJM is not really a volatile stock but a steady and safe one. With continually dividend payouts and increases within the past 10 of the 10 years, this is the stock to own if you are a dividend investor.

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