Cramer: Play Defense with B&G Foods
In this tough market environment, “Mad Money” host Jim Cramer recommends investors “play defense.” To do so, investors should look for stocks that, 1) don’t have exposure to Europe, 2) pay a juicy dividend.
Take B&G Foods, for example. The Parsippany, N.J.-based company makes a variety of food products, including Ortega and Las Palmas brand Mexican food, Cream of Wheat, Vermont Maid Syrup, Polaner fruit spreads, B&M Pickles and more. Not only does this food company have zero exposure to Europe, it benefits from the massive decline in commodity prices and pays a dividend yield of 4.9 percent.
B&G is a very well-run company, too, Cramer said. The company is making an effort to follow the customer. People are buying more food at dollar stores or discount clubs, so it is buying brands that have a presence in those places. It’s also making an effort to design products that would sell in discount retailers.
In its latest quarter, B&G reported a 1-cent earnings beat off a 34-cent basis, with revenues that increased by 19.7 percent year-over-year, although they were a tiny bit lighter than expected. B&G also reaffirmed its full year guidance.
B&G’s stock currently trades at 15 times next year’s earnings estimates with a 12-percent growth rate, which Cramer acknowledged isn’t exactly cheap. But he thinks it’s worth paying up for safety, especially in this rocky market environment.
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