Dividend Growth Stock Overview: Lancaster Colony Corporation

Lancaster Colony owns the Marzetti brand of salad dressings and salad toppings.
Photo: Flickr.com/The Impulsive Buy

About Lancaster Colony Corporation

Lancaster Colony is a manufacturer and marketer of food products that are primarily sold through retail outlets. The company used to have other business lines, including candle manufacturing, but divested these operations in January 2014. Lancaster employs 2,600 people and is headquartered in Ohio.

Lancaster Colony has nearly 20 major food brands; the best known are Marzetti, New York and Texas Toast. Food products that Lancaster manufactures include vegetable dips, frozen garlic bread and specialty noodles, and dinner rolls, croutons and flatbreads. The company also manufactures and sells other products under licensing agreements, including Olive Garden dressing, Jack Daniel’s mustards and Hungry Girl Flatbreads.

The company is heavily dependent on two customers: roughly a third of Lancaster’s net sales are attributable to McLane Company and Wal-Mart Stores.

In addition, potential investors should be aware that the CEO and Chairman of the Board, John Gerlach, Jr., owns 30% of the outstanding shares.

Nearly all of Lancaster’s net sales are from the United States; the company does not have a significant foreign presence.

The company is a member of the S&P Mid Cap 400 index and trades under the ticker symbol LANC.

Lancaster Colony Corporation’s Dividend and Stock Split History

Lancaster Colony Dividend History

Lancaster Colony is one of only a few companies that have grown dividends for half a century.

Lancaster Colony has paid and grown dividends since 1963. The company generally announces annual dividend increases in the middle of November, with the stock going ex-dividend in early December. The company most recent dividend increase announcement was in November 2015 when Lancaster Colony increased its payout by 8.7% to an annualized $2.00.

Lancaster Colony has a history of good dividend growth. Over the last 5 and 10 years, Lancaster Colony has compounded its dividend at an average of 8.86% and 6.41%, respectively. Over the last two decades, Lancaster Colony’s compounded dividend growth rate is 7.96%.

The company has split its stock multiple times. Since 1990, Lancaster Colony has executed four stock splits – a 3-for-2 split in April 1992, 4-for-3 splits in April 1993 and July 1994, and a 3-for-2 split in January 1998.

Lancaster Colony Corporation’s Direct Purchase and Dividend Reinvestment Plans

Lancaster Colony has both direct purchase and dividend reinvestment plans. However, to participate in either plan, you must be a current shareholder. That means that you must own shares in your own name and not that of your brokerage (i.e., “in street name”). If you do own shares in a brokerage account, you’ll have to have them issued to you and then deposited into the plan to begin participating.

The minimum for additional investments is $50.

The plans are favorable for investors, as the fees for purchases or sales through the plans are minimal. When purchasing shares through the plans – either directly or by reinvesting dividends – there is a 4-cent per share fee, which will be deducted from your dividends or from the amount invested. When you go to sell your shares in the plan, you’ll pay a fee of 3.5 cents a share, which will be deducted from the sale proceeds.

Helpful Links

Lancaster Colony’s Investor Relations Website

Current quote and financial summary for Lancaster Colony (finviz.com)

Information on the direct purchase and dividend reinvestment plans for Lancaster Colony

 

Share this post:

Recent Posts

One Comment

  1. I’ve never heard of this company but I do consume one of their products. I’m addicted to the Olive Garden dressing that can be bought at the store. Looks like a god company. Although the buy time was probably a few months ago. Price has rebounded nicely.