Income investors may have seen B&G come across their radar thanks to the stock’s sky-high 17% dividend yield.

But is that dividend as reliable as a bowl of the company’s Cream of Wheat hot cereal?

We’ll dig into the numbers in just a minute, but first, a word of caution: Anytime you see a dividend yield that high, your guard should be up. It doesn’t automatically mean that the dividend is unsafe or that the stock is a dog, but the risk of both is certainly elevated.

One reason B&G Foods’ yield is so high is that the stock has been a disaster. It’s been just about cut in half in the past year and is down more than 80% over the past five years.

Part of the problem is that cash flow has been very inconsistent.

Last year, it slid 54% from $222 million to $103 million. This year, it is forecast to drop another 10% to $93 million.

The Safety Net model penalizes stocks for declining free cash flow. The reasoning is very simple: You want to see cash flow growth in order to boost your confidence that the company will be able to afford its dividend in the future.

The good news is that B&G’s payout ratio is low enough to not set off any alarms.

Last year, the company paid out 58% of its cash flow in dividends. This year, that number is forecast to remain the same.

In late 2022, B&G Foods slashed its quarterly dividend from $0.475 to the current $0.19. Once a management team has shown a willingness to cut the dividend, the payout is no longer sacrosanct, and investors should be on guard that it could happen again.

The saving grace for the company’s dividend safety rating is that the payout ratio is reasonable. But if cash flow continues to deteriorate, it could become a problem.

B&G Foods’ dividend has a high risk of being cut.

Dividend Safety Rating: D

What stock’s dividend safety would you like me to analyze next? Leave the ticker in the comments section.

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The company manufactures and sells grocery store staples such as Hunt’s tomatoes, Swiss Miss hot cocoa and pudding, Pam cooking spray, and many more.

Unfortunately for Conagra, the past couple of years have been a struggle, with its stock price retreating 54% since its peak in January 2023. Several factors, such as tightening margins, inflation, and negative M&A (mergers and acquisitions) results, have led to a slow but steady decrease in sales.

The stock’s current dividend yield sits at 7.4%. It has avoided any dividend cuts in the last 10 years – with the exception of when it spun off Lamb Weston Holdings (NYSE: LW) to separate its potato business from the rest of the company.

With all of the recent bad news, let’s see whether Conagra’s dividend is at risk of being cut or there is still hope for a rebound.

First, we need to highlight a huge move by the company: In June of this year, Conagra sold off the brand Chef Boyardee for $600 million. (While that’s very helpful in padding its free cash flow, I’m tempted to knock a point off Conagra’s dividend safety rating because it canned up my childhood nostalgia and sold it off.)

Only time will tell how much this will affect the company’s bottom line, as estimates in 2024 showed that Chef Boyardee brought in $450 million in sales.

Now let’s isolate Conagra’s ability to pay its dividend by looking at its free cash flow. Despite the contraction of the stock price, 2024 was surprisingly a very good year for the company, as it more than doubled its free cash flow from $633 million to more than $1.6 billion.

The problem is that ever since then, there’s been a steady decline. Free cash flow sunk almost 20% to $1.3 billion in fiscal 2025, which ended in May. What’s even worse is that even with the company selling several of its brands this year, forward estimates indicate a 42% reduction in 2026 all the way down to $760.2 million.

Finally, Conagra has announced no plans to cut its dividend, which is going to throw its dividend payout ratio out of whack. Its payout ratio for 2025 sat at 51.4%, but due to the massive estimated decrease in free cash flow for 2026, that ratio is estimated to jump to 88.0% – above our threshold of 75%.

As with any stock, there’s hope that Conagra will right the ship and turn this around. But for now, it looks like the dividend is in danger of being cut in the near future.

Dividend Safety Rating: D

What stock’s dividend safety would you like us to analyze next? Leave the ticker in the comments section.

You can also take a look to see whether we’ve written about your favorite stock recently. Just click on the word “Search” at the top right part of the Wealthy Retirement homepage, type in the company name, and hit “Enter.”

Also, keep in mind that Safety Net can analyze only individual stocks, not exchange-traded funds, mutual funds, or closed-end funds.

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However, the stock has not performed well over the past two years. The decline in the share price – plus annual raises in the dividend – means the stock now yields nearly 5%, which is catching the attention of income investors.

Is the dividend as reliable as that box of Cheerios in the pantry, or will it spoil like a pint of raspberries the minute you bring them home from the store?

The company already completed its fiscal 2025 in May. The results weren’t great. Revenue and profits were down, and free cash flow fell 9%. Over the past three years, free cash flow has plummeted from $2.75 billion to $2.29 billion. In fiscal 2026, free cash flow is forecast to slip again to $2.16 billion.

Anytime cash flow is falling, the Safety Net model will penalize the company and lower its dividend safety grade. It’s not a good sign.

General Mills currently pays a $0.61 per share quarterly dividend, which comes out to a 4.9% yield. Last year, the company paid out $1.3 billion in dividends, which was 58% of its free cash flow. That payout ratio is perfectly acceptable. I like payout ratios to be 75% or less of free cash flow. That gives me comfort that the company can continue to pay its dividend even if cash flow falls.

In fiscal 2026, General Mills’ payout ratio is expected to inch up to 62%, which is still fine.

The company has paid dividends every year for 127 years. It has raised its payout to shareholders every year since 2021. It has not cut its dividend in at least 36 years.

However, if free cash flow doesn’t rebound, management could be faced with some difficult decisions.

I don’t suspect a dividend cut is imminent, but with no rebound in sight for free cash flow (it’s projected to decline through at least 2028), there is definite risk to this dividend.

Dividend Safety Rating: D

What stock’s dividend safety would you like me to analyze next? Leave the ticker in the comments section.

You can also take a look to see whether we’ve written about your favorite stock recently. Just click on the word “Search” at the top right part of the Wealthy Retirement homepage, type in the company name, and hit “Enter.”

Also, keep in mind that Safety Net can analyze only individual stocks, not exchange-traded funds, mutual funds, or closed-end funds.

The post General Mills: How Safe Is This Beloved Company’s Dividend? appeared first on Wealthy Retirement.

Despite my being a head-banging teen who routinely blasted AC/DC and Van Halen at full volume, when my dad played Neil Diamond and Barbra Streisand’s duet, You Don’t Bring Me Flowers, it stopped me in my tracks.

The lyrics, which describe the sadness and loneliness of being in a relationship that has withered on the vine, are profound.

Shareholders of Flowers Foods (NYSE: FLO) may be able to relate. Though the company boasts a 6.3% yield, the stock has steadily fallen for the past 2 1/2 years, losing half of its value.

Unlike Neil and Babs, Flowers Foods is trying to keep the relationship with shareholders alive by offering a robust dividend yield and annual increases. Let’s see whether that dividend is sustainable.

Flowers Foods makes baked goods, primarily bread, under the brands Nature’s Own, Dave’s Killer Bread, and Wonder, among others. It also owns the Tastykake snack brand.

After a dip in 2022, free cash flow has been climbing, primarily through acquisitions. It is forecast to rise another 4% in 2025.

Last year, Flowers paid shareholders $203 million in dividends for a 72% payout ratio, which is fine. My threshold is 75% for most companies. As long as the payout ratio is below 75%, I trust that the company can handle any short-term downturns in free cash flow without having to cut the dividend.

This year, the company is projected to pay $208 million in dividends, with the payout ratio shrinking slightly to 71%, so it’s still in good shape.

Flowers Foods has a very impressive dividend-raising track record. It has boosted the dividend every year since it began paying one in 2002, including hikes of a penny per share in each of the pandemic years. This proves that while bread may not be a huge growth business, it is a stable one.

By the looks of the share price, Wall Street doesn’t seem to be buying into the “growth by acquisition” story. But with Flowers Foods’ rising cash flow, reasonable payout ratio, and excellent track record of increasing its payout, investors should feel confident that the company’s dividend will have a happier ending than the couple in the song that made this metalhead get all emo.

The dividend is safe.

Dividend Safety Rating: A

What stock’s dividend safety would you like me to analyze next? Leave the ticker in the comments section.

You can also take a look to see whether we’ve written about your favorite stock recently. Just click on the word “Search” at the top right part of the Wealthy Retirement homepage, type in the company name, and hit “Enter.”

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The post How Safe Is This Bread Producer’s 6.3% Yield? appeared first on Wealthy Retirement.

At its heart, it is simply the coming together of loved ones around a home-cooked banquet in the spirit of gratitude to share precious time – not gifts – with one another.

This makes it one of the few major holidays that have not been totally ruined by consumerism. (I’m looking at you, Christmas.)

But that doesn’t make Thanksgiving a cheap holiday for American families.

As simple as the occasion may be, these days, it’s becoming increasingly costly to enjoy a Turkey Day feast. While there’s been some relief lately – with food costs dropping 5% from 2023 – the average cost of a Thanksgiving dinner remains around 19% above 2019 prices.

The American Farm Bureau Federation’s data shows that a classic Thanksgiving feast for 10 people now costs $58.08, down from $61.17 in 2023 and $64.05 in 2022. However, this modest decline doesn’t erase the dramatic increases of recent years.

Let’s put things into perspective and consider the nominal cost of a standard Thanksgiving dinner and the “real” (or inflation-adjusted) cost over time.

Looking at the Farm Bureau’s data, while the nominal price has risen to $58.08, the inflation-adjusted cost is around $18.40. This suggests that the real burden of the meal has remained relatively stable over decades.

The component parts that were factored into this year’s survey represent a standard list of “classic” food items, including a 16-pound turkey ($25.67), stuffing ($4.08), pie crusts ($3.40), whipping cream ($1.81), peas ($1.73), dinner rolls ($4.16), and other essentials.

Notably, some items saw significant price decreases this year, such as sweet potatoes (down 26.2%) and whole milk (down 14.3%), while others increased, like dinner rolls (up 8.4%) and cranberries (up 11.8%).

You can be the judge of how accurate it really is. Personally, I think a few items are missing here. (Where are the collard greens, the ham, and the all-important mac and cheese?!)

Though interestingly, the Farm Bureau does track an “updated” dinner that includes ham, Russet potatoes, and green beans, bringing the total to $77.34.

While recent price decreases are encouraging, the impact of inflation remains significant since the beginning of the pandemic. And while some families may hardly notice the changes in prices, others might see a palpable difference in what gets placed on the dining room table this year.

That’s why gratitude should be the true centerpiece on Thanksgiving. It’s not about how much money is spent but the time we spend together.

The post The “Real” Cost of a Thanksgiving Meal appeared first on Wealthy Retirement.

After its IPO in June 2023, the stock price fell to about $30 per share. But since then, it’s staged a huge reversal, surging more than 200% to its current price of about $95.

However, post-IPO price spikes are a classic trap in the investing world, so I encourage investors to temper any feelings of FOMO with some hard financial facts.

That’s where my Value Meter comes in. Let’s see what it has to say about Cava.

First, let’s examine the company’s enterprise value-to-net asset value (EV/NAV) ratio. This number tells us how much the market values the company relative to its assets.

Cava’s EV/NAV is a whopping 19.0, nearly triple the average of 6.6 for similar companies. This means investors are paying a big premium for Cava’s growth potential, which is typical for stocks that have recently gone public.

But while high-growth companies often trade at a premium, we need to ensure the growth is there to back it up.

And Cava’s recent results are impressive.

In Q1 of 2024, the company grew its revenue by 30% year over year and opened 14 new restaurants. It even turned a profit – no small feat for a young restaurant chain.

But here’s where things get sticky. Cava has been burning through cash as it expands. In three of the last four quarters, it had negative free cash flow.

On average, its free cash flow was -1.3% of its net assets during that span. That’s better than the -5.3% average for similar companies, but it’s still concerning to see a company consistently spending more than it’s bringing in.

To be fair, in Q1, Cava generated positive free cash flow for the first time ever. That’s a good sign, but one quarter doesn’t make a trend.

And while Cava’s concept seems to resonate with customers, rapid expansion comes with risks. To build on its success in the first quarter, the company will need to maintain the quality of its offerings and find good locations as it enters new markets.

Speaking of building on success, the company’s growth plans are ambitious. It aims to hit 1,000 locations by 2032, up from 323 today. That’s a lot of new restaurants to open and a lot of cash to spend.

Cava’s innovation is another bright spot. The company is currently rolling out a grilled steak option that could boost sales, and it’s testing a new loyalty program that could drive repeat visits. These are smart moves that could fuel growth.

But here’s the rub: Much of this potential seems to already be baked into the stock price.

Cava is trading at a premium valuation, and the market expects big things. If the company hits a bump in the road – say, a few bad restaurant openings or a slowdown in sales growth – the stock could take a hit.

Don’t get me wrong, I like Cava’s concept. Mediterranean food is hot right now, and the company’s customizable bowls and pitas hit the sweet spot between healthy and tasty.

But as an investor, I have to look beyond the delicious food and focus on the numbers. And right now, they don’t give me confidence in the stock’s valuation.

That doesn’t mean Cava is a bad company. It just means the stock price might be running ahead of the fundamentals.

For long-term investors who believe in Cava’s growth story, it could still be worth a look. But you might want to wait for a pullback before loading up your plate.

The Value Meter rates this one “Slightly Overvalued.”

What stock would you like me to run through The Value Meter next? Post the ticker symbol(s) in the comments section below.

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