Today’s Stock of the Week is a company that makes popular snacks and is always looking for a new company to put on the menu.
J&J Snack Foods Corporation (JJSF) makes products that consumers know well from trips to supermarkets, movie theaters, baseball games and elsewhere—without knowing what company makes them.
Its pretzel brands—more than a dozen—include Superpretzel, Mr. Twister, Texas Twist, New York Pretzel and Bavarian Bakery. It makes frozen juices and desserts such as Whole Fruit and Minute Maid…Tio Pepe’s and Oreo churros…Patio and Supreme Stuffers handheld dough products…Icee and Slush Puppie frozen beverages…Mrs. Goodcookie, Readi-Bake and Daddy Ray’s bakery products…and many more.
The Pennsauken, New Jersey–based company, a mid-cap at $2.5 billion in total stock value, makes niche acquisitions that would be too small to be meaningful for huge food companies but that add meaningfully to its revenue and earnings. For example, in January, it acquired Hill & Valley, an Illinois-based baker that generates more than $45 million in annual revenue.
J&J Snack foods, in business since 1971, still is run by its founder, who owns 20% of the shares and has a strong shareholder focus. The dividend has been raised every year since 2004—it is currently $1.68/share/yr., recently yielding 1.25%. Revenue is likely to grow steadily: It was $993 million last year and should be $1.1 billion this year and $1.13 billion in 2018. The company has a solid balance sheet that includes $15/share in net cash.
Fiscal year.: Sep. Earnings per share: 2018 est./$4.81…2017 est./$4.37…2016/$4.06.
This Week’s Expert
William E. Costello, CFA, is senior vice president and senior portfolio manager, Westwood Holdings Group, Dallas, which manages $21.3 billion, including the $180 million Westwood SmallCap Value Fund (WHGSX). WestwoodGroup.com