Stock Setting Up to Provide Capital Appreciation & Income Growth?
If there’s one thing markets are good at, it’s overreacting.
Slight earnings miss?
Sell-off.
Temporary economic pressure?
Panic. Forget everything…just sell. The stock market is broken.
Here’s the truth: Wall Street’s mood swings often create great opportunities for income investors by triggering good companies to go on sale.
B&G Foods Inc (NYSE:BGS) is a prime example of all this. BGS stock is seen as a company that’s not even worth a look by many investors. It’s not because the company is fundamentally broken, but rather it’s due to sentiment shifting.
B&G Foods doesn’t sell artificial intelligence (AI) products, cloud computing, electric cars, or anything of that sort. What it does do is provide investors with fat dividends quarter after quarter.
Mind you, this isn’t the first time we’ve covered BGS in Income Investors. In fact, I profiled BGS stock last month. Just a few days later, BGS came under fire from investors, as there was a broad market sell-off. The sell-off has made the stock an even better opportunity than it was before.
What Does B&G Foods Do?
Headquartered in Parsippany, New Jersey, B&G Foods manufactures, sells, and distributes a portfolio of household products and shelf-stable and frozen foods in the U.S., Canada, and Puerto Rico. Shelf-stable foods are those that can be stored safely at room temperature for an extended period of time and don’t require special handling.
The company owns several well-known brands, including “Green Giant,” “Ortega,” “Cream of Wheat,” “Crisco,” “Dash,” “New York Style,” “Old London,” “Sugar Twin,” “TrueNorth,” “Vermont Maid,” “Victoria,” “Wright’s,” and several others.
B&G markets and delivers its products both directly and through a network of independent brokers and distributors. Its products reach supermarket chains, foodservice providers, big-box retailers, warehouse clubs, non-food retailers, and specialty distributors. (Source: “Profile,” Yahoo! Finance, last accessed April 23, 2025.)
Charts Painting Bullish Outlook for BGS Stock
There are some solid bullish developments on the BGS stock chart. They suggest that the stock price could a lot higher in the coming weeks and months.
How so?
Well, to start with, take a look at the 50-day and 200-day moving averages (MAs) of BGS stock. The stock’s currently trading above these two MAs. This tell means that the short-term and long-term trends are pointing upwards.
It’s also worth noting that BGS has just crossed above its 200-day MA. If the stock can remain above this level, it would mean that the long-term trend has changed direction in favor of those who own BGS.
Look at the moving average convergence-divergence (MACD) momentum indicator; it has been trending higher while the BGS stock price has been range-bound since late 2024. This divergence is bullish. It is hinting that a move to the upside could be brewing for the stock.
Chart courtesy of StockCharts.com
BGS Offers Very Attractive Dividend Yield
B&G Foods has certainly faced headwinds—rising costs, supply chain hiccups, etc. But there’s one very positive thing that income investors shouldn’t ignore: a dividend is still being paid to BGS shareholders.
The company has a long history of returning capital to shareholders. While the payout was trimmed in 2023, it remains attractive for income investors seeking decent yields.
At the time of writing, BGS stock has an inflation-crushing dividend yield of 10.52%, paying $0.76 per share on annual basis. So, a shareholder could generate income of $76.00 per share with an investment of $722.00 (assuming 100 shares purchased).
Now here’s an important question: is B&G Foods’ dividend safe?
Since there was a dividend cut in 2023, one can’t say that BGS stock is a “buy and forget” kind of income play. However, management is well aware of the headwinds the company’s currently facing, and it’s managing well. Wall Street analysts are expecting sales and profitability to improve between 2025 and 2026. So, it wouldn’t be wrong to say that B&G Foods’ dividends are safe in the near term, at least.
The Lowdown on BGS Stock
B&G Foods, a manufacturer of household products and shelf-stable and frozen foods, shouldn’t be overlooked by investors. BGS stock has been battered, but charts are indicating that buyers could be coming in and taking the price higher.
With the outlook seeming rosy, BGS stock continues to offer a very attractive dividend yield—over 10%— and dividends are safe for now.
With BGS stock, shareholders could be in for the best of both worlds: solid capital appreciation and a robust dividend that could grow once business improves. Maybe that’s why 70% of all outstanding shares are owned by institutional investors? (Source: “Holders,” Yahoo! Finance, last accessed April 23, 2025.)
The top three institutional holders of BGS stock are BlackRock Inc, The Vanguard Group, and Dimensional Fund Advisors LP. Together, these three holders own 23.93 million shares of BGS stock.