If you bought a share of Campbell Soup (CPB) back in 2000, your share would have earned $1.65 in profit and you would have collected $0.90 in dividends. Today, Campbell Soup earns $3.05 in profit and pays out $1.40 per share in cash dividends. This means that over the past sixteen years, earnings have grown by 3.9% annually and dividends have gone up by 2.8% each year.
This is not a business that serves the role of inflation hedge or stable dividend cash generator in a portfolio. It serves in the realm of wealth preservation rather than wealth building. There is value in that–each share paid you $0.88 in 2008 dividends, $1.00 in 2009 dividends, and $1.08 in 2010 dividends. It is a sign of intelligent estate planning to own business interests that not only maintain but grow their cash payout during periods of economic distress.
However, when you contemplate … Read the rest of this article!