Smucker's Solid Brands Should Accelerate Growth
Jif, K-Cups, and pet food are the menu for a narrow moat.
We believe J.M. Smucker’s (SJM) current price presents an attractive entry point in a company that should be able to use its brand strength in higher-growth categories to offset deterioration in less advantaged areas.
While center-of-store competition is fierce, and we believe Smucker’s brand-based competitive advantage is deteriorating as a result, we still think the company enjoys an intangible asset edge that should leave returns on invested capital (excluding goodwill) around 380 basis points higher than its cost of capital on average over the next five years.
Zain Akbari does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.