McCormick & Co. (NYSE:MKC) remains a favorite of ours, stemming back to recent earnings. Well today McCormick declared an increase in the quarterly dividend from $0.47 to $0.52 per share on its common stocks, payable January 16, 2018 to shareholders of record December 29, 2017.  This marks the 32nd consecutive year it has has increased its quarterly dividend.  At $0.52, the quarterly dividend is double the amount paid in 2010.

Lawrence E. Kurzius, Chairman, President & CEO, said, “Our steadfast focus on growth, performance and people is resulting in strong sales and profit performance and generating strong cash flow.  We are committed to our dividend program and I’m delighted to announce another dividend increase for our shareholders.”

McCormick has paid dividends each year since 1925.  We were sold after the first quarter where McCormick’s first-quarter sales were up 4.7% compared to the year-ago period. In constant dollars, sales rose 7%. That is solid. However, currency issues did hit some of the segments. The consumer segment grew sales by 2%, and that included a 2% hit from unfavorable currency. This segment saw sales rise from the acquisition of Gourmet Garden and Cajun Injector, as well as increases in the United States. Sales were weakest in Europe where they fell 9%, or 5% controlling for currency. Overall, operating income in the consumer segment jumped 6% to $91 million.

The industrial segment saw sales rise significantly in the second quarter. In fact they rose 9%, but was hit by negative currency of 3%. Once again we will reiterate that the company continues to see growth because each year it comes out with new and exciting products that are usually well received, and the company continues to effectively marketing its classic products. Well timed acquisitions have continued to help the company grow. In the Americas industrial sales were up 8% in constant dollars, led by savory flavor products and snack seasoning. In Europe sales were up 33% with sallies from Giotti contributing 24% of the growth. Sales in Asia/Pacific were flat from last year on an absolute basis but up 4% in constant dollars. Taken as a whole, industrial segment income was up 8% to $46 million.

While competition remains tough, the company continues its slow and reliable growth. Expenses have been kept in check thanks to cost savings initiatives as well as the effect of higher-margin industrial products being moved. This helped keep a strong gross profit margin, which came in at 39.9%. This was however down from 40.7% in the year-ago period. The company increased operating income slightly to $133 million versus $125 million last year, the result of higher sales and strong gross profit margin. This led to strong earnings.

Earnings per share rose once again. They came in at $0.79 compared to $0.73 in the year-ago period. Now if we account for necessary adjustments, we see that adjusted earnings per share was $0.82 compared to $0.75 adjusted earnings per share in the second quarter of 2016. This increase of $0.07 was by the growth in sales and controlled expenses. Further, this beat analyst estimates by $0.05. Of course, it also comfortably covered the quarterly dividend

This performance is exactly what we look for in a reliable value/slow growth stock.

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