Dividend Growth Stock Overview: Bemis Company

About Bemis Company

Bemis Dividend Growth

You’ve probably used Bemis Company products like these single serve condiment packages.
Image from the Bemis Company website.

Bemis Company is a global supplier of packaging and pressure sensitive label materials. The company, which is headquartered in Neenah, Wisconsin and has 67 facilities in 11 countries, develops and manufactures packaging materials for a variety of applications, including food and healthcare products. Two-thirds of the company’s packaging is used in the food industry; the remainder is used in the medical, pharmaceutical, chemical and agribusiness industries. Bemis employs 19,000 people and its sales are broken out into three business segments:

  • U. S. Packaging, which represented 59% of Bemis’ 2013 sales. This segment provides packaging for processed and fresh meat, cheese and other dairy products, and snacks and confection products.
  • Global Packaging, which provided 30% of Bemis’ 2013 sales. The Global Packaging segment provides packaging for similar applications as the U.S. Packaging segment, but for a worldwide market.
  • Pressure Sensitive Materials, which provided the remaining 11% of 2013 sales. This segment provides packaging and labeling products, including digital & computer-aided signage, photo overlays and medical applications.

In 2013, Bemis Company had net sales of $5.03 billion – down about 2% from 2012 – and net income of $212.6 million – up 22.3% from 2012.

Bemis’ heritage dates back to before the Civil War when Judson Moss Bemis established J. M. Bemis & Company in St. Louis, Missouri in 1858 to manufacture machine-sewn cotton bags for milled food and grain products. The company’s location was key to selling to the Mississippi River transportation market. In 1881, Bemis Brothers & Company (the name had officially changed in 1873) expanded to Minneapolis, Minnesota, and later to Omaha, Nebraska in 1887, and to Louisiana, Wisconsin and California in the 1890s.

Bemis expanded to Tennessee in 1900 when the company bought a 300-acre field near Jackson in order to mill the cotton that was produced nearby. The field and the surrounding area are now known as Bemis, TN.

The company continued to expand in response to increasing demand, going into Canada in the first decade of the 20th century, and building new factories in New York State, Kansas, South Carolina and Massachusetts in the 1920s. During World War II, Bemis manufactured sandbags, tents, tarpaulins and cots for Allied Forces.

In 1959, Bemis moved into the pressure-sensitive adhesives business and founded Morgan Adhesives Company with Burton D. Morgan and entered the vinyl clothing, wall coverings and reprographic products markets through acquisitions during the 1960s. In 1965, the company adapted the name Bemis Company, Inc. and the following year began trading stock on the New York Stock Exchange.

The 1980s saw the company refocused its businesses, selling the last parts of its textile mills and operations – businesses that Bemis had operated since its founding more than 120 years earlier. Bemis also focused on developing products internally rather than acquisitions, developing EZ Peel® films and LiquiFlex® packaging for portion control and food service packets.

Bemis went back to expanding through acquisitions in the 1990s and has continued strategic acquisitions since. The company has acquired 19 companies since 1990, including Milprint, Banner Packaging, PerfecSeal, and the Brazilian company Dixie Toga.

Bemis was a member of the S&P 500 index until December 4, 2014, when Standard & Poor’s replaced it in the index with Royal Carnival.  From 2009 until December 2014, Bemis was an S&P Dividend Aristocrat.  Now that it is a member of the S&P MidCap 400, Bemis qualifies as a member of the S&P High Yield Dividend Aristocrats.  The company trades under the ticker symbol BMS.

Bemis Company’s Dividend and Stock Split History

Bemis Dividend Growth

Bemis has compounded its dividend at 3.7% over the last 5 years and 5.4% over the last 10 years.

Bemis Company began increasing dividends in 1984 and met the Dividend Aristocrat criteria of 25 consecutive years of dividend growth in 2009. Bemis has paid an annual dividend since 1922. Since at least 1996, Bemis has announced an annual dividend increase in February. The increased dividend is paid in March and the stock goes ex-dividend in late February. I expect Bemis to announce its next dividend increase in February 2015.

In February 2014, Bemis announced a dividend increase of 3.8%, from an annualized rate of $1.04 to $1.08 per share. This is consistent with Bemis’ dividend growth history since 2008, as the company has increased its dividend by less than 5% per year since then. Bemis has a 5-year compounded annual dividend growth rate (CADGR) of 3.71% and a 10-year CADGR of 5.37%. From 1999 – 2014, Bemis has compiled a CADGR of 5.85%. Both the 10-year and 15-year CADGR figures are enhanced by dividend growth rates in excess of 10% in 2004, 2005 and 2007.

Bemis has not split its stock in the last decade; prior to that, the company split its stock 2-for-1 in January 2004, March 1992, March 1988, March 1986, March 1984, and in 1969. The company also split its stock 5-for-2in 1964, 4-for-1 in 1957 and 3-for-2 in 1948, and paid a 5% stock dividend in 1975. You would now have 32 shares of Bemis stock for each share purchased at the beginning of 1984 when the company began growing its dividends.

Your investment in Bemis Company from mid-2009 to mid-2014 would have grown from about $21 to about $41 – a compounded rate of 14.4% over that time, not including the effects of reinvested dividends. This is nearly identical to the 14.3% return of the S&P 500 over that same period.

Bemis Company’s Direct Purchase and Dividend Reinvestment Plans

Bemis has both direct purchase and dividend reinvestment plans. Investors interested in participating in either of these plans can find information at Wells Fargo’s Shareowner Online Investment Plan site. The dividend reinvestment plan allows you to reinvest dividends in full or in part; you can also choose to have the dividends directly deposited into your checking account.

Bemis covers nearly all the fees associated with investing in its stock, including the initial enrollment fee (which is usually $10 per account). If you’re interested in directly purchasing Bemis stock, the minimum purchase is $500 for the initial investment and $25 for any subsequent optional cash investments, whether by check or by direct debit. Bemis also covers all fees associated with reinvesting dividends.

When you sell your shares in the plan, you’ll pay 12 cents per share sold plus a transaction fee of between $10 and $30, depending on the type of sell order. You’ll also pay $5 to have the sale proceeds directly deposited to your account.

Helpful Links

Bemis Company’s Investor Relations Website

Current quote and financial summary for Bemis Company (finviz.com)

Information on the direct purchase and dividend reinvestment plans for BMS

Want to find out about more great dividend growth stocks?

Check out the list of current S&P Dividend Aristocrats.

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