Markets have become extremely volatile lately as investors await news from the Fed regarding an interest rate decision. This has led to big market
sell-offs and it has forced investors to reconsider safe haven securities once more. One such stock that has come back into focus thanks to this shift is Campbell Soup (CPB).
After all, what could be safer than a soup stock in today’s market environment? CPB has a beta of just 0.47 while roughly 80% of the company’s sales come
from the domestic market, leaving it with relatively low exposure levels to foreign woes which could be very important today given all the trouble
overseas.
But this relative safety isn’t the only reason to like CPB today, as the stock has also seen some pretty impressive growth characteristics when compared to
its peers, while it also in a great position if you look to recent earnings estimate revisions as well.
Recent Estimates
While soup might have a reputation as a boring business, CPB actually is sporting a pretty robust growth rate. In fact, current rates suggest 14% earnings
growth this year including nearly 10% growth for this quarter (when compared to the year ago period).
These lofty growth projections have certainly been assisted by recent earnings estimate revisions as these changes from analysts have bumped up
expectations. In just the past month, the current year EPS consensus has gone from $2.60/share to $2.81/share as nine estimates have moved higher compared
to zero lower. We see similar trends of agreement in other time periods too, suggesting that most analysts are getting more bullish on the Campbell story.
Investors should also add in a nice track record of beating estimates including an average beat of 12.6% over the past four quarters and a streak of beats
or meets since late 2013. No wonder CPB has earned itself a Zacks Rank #1 (Strong Buy) which is a level that only the top 5% of securities reach at any one
time.
Other Factors & Bottom Line
If that wasn’t enough for investors, CPB actually has a pretty good growth score too. The company actually has a ‘B’ grade for growth, putting it in the
top 40% overall. This is largely thanks to its industry-crushing projected EPS growth and ROE that is roughly five times the industry average, two factors
which point towards what a well-rounded stock CPB is right now.
So if you are looking for a safer choice in today’s market that still has growth potential, CPB might be a good choice. Not only does it have a very low
beta and a solid 2.4% dividend, but its good growth rate and rising earnings estimates suggest that it will be a tough stock to beat no matter what happens
with the Fed and to start 2016.
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CAMPBELL SOUP (CPB): Free Stock Analysis Report
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