CAL-MAINE FOODS INC (NASDAQ:CALM) – A High-Yield Dividend Stock with Strong Fundamentals

CAL-MAINE FOODS INC (NASDAQ:CALM) stands out as a compelling choice for dividend investors, offering an attractive yield alongside solid profitability and financial health. The company, a leading producer and distributor of shell eggs, has been selected by our Best Dividend screen due to its strong dividend rating, healthy balance sheet, and consistent earnings.

Key Strengths for Dividend Investors

High Dividend Yield

• CALM currently offers a dividend yield of 13.17%, significantly above the industry average of 4.86% and the S&P 500 average of 2.34%.
• The company has paid dividends for at least 10 consecutive years, demonstrating reliability.
• Dividend growth has been strong, with an annualized growth rate of 16.93% over the past five years.

Sustainable Payout Ratio

• CALM pays out 21.16% of its net income as dividends, a conservative ratio that suggests sustainability.
• Unlike high-yield stocks that may sacrifice financial stability, CALM maintains a prudent balance between rewarding shareholders and retaining earnings.

Strong Profitability

• The company earns a Profitability Rating of 8/10, reflecting robust margins and returns.
• Return on Equity (ROE) of 41.60% and Return on Assets (ROA) of 32.15% rank among the best in the food products industry.
• Operating margins (32.33%) and profit margins (26.08%) are well above industry peers.

Excellent Financial Health

• CALM has no outstanding debt, eliminating solvency risks.
• A Current Ratio of 3.86 and Quick Ratio of 3.26 indicate ample liquidity to meet short-term obligations.
• The Altman-Z score of 8.54 suggests a very low bankruptcy risk.

Potential Considerations

While CALM excels in dividend sustainability and profitability, its growth outlook is weaker, with expected declines in earnings (-64.46%) and revenue (-25.50%) in the coming years. This may impact future dividend growth but does not immediately threaten the current payout.

For investors seeking high-yield, low-risk dividend stocks, CALM presents a strong case.

Our Best Dividend Stocks screener provides more high-quality dividend stock ideas.
For a deeper dive, review the full fundamental report on CALM.

Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.