Dividend Kings In Focus: The Marzetti Firm

Up to date on July 22th, 2025 by Felix Martinez

The Marzetti Firm (MZTI) has a dividend monitor report that few corporations can rival. The corporate has elevated its money dividend for 62 consecutive years, making it one among solely 13 corporations within the U.S. with such a protracted streak. This places the corporate among the many elite Dividend Kings, a small group of shares which have elevated their payouts for a minimum of 50 consecutive years.

You may see the whole listing of all 55 Dividend Kings right here.

We’ve got compiled a complete listing of all Dividend Kings, together with key monetary metrics equivalent to price-to-earnings ratios and dividend yields. You may obtain your copy of the Dividend Kings sheet (together with monetary metrics equivalent to price-to-earnings ratios and dividend yields) by clicking on the hyperlink under:

Dividend Kings are the “better of the very best” in the case of rewarding shareholders with money and better dividend payouts annually. This text will focus on The Marzetti Firm’s dividend and valuation outlook.

Enterprise Overview

The Marzetti Firm started its operations in 1961 after a number of small glass and associated houseware manufacturing corporations mixed. The brand new firm virtually instantly started rewarding its shareholders with quarterly money dividends and ultimately went public in 1969, the identical 12 months it began operations within the meals service enterprise with the acquisition of the Marzetti model.

The corporate manufactures and distributes a comparatively slender product assortment break up into two main classes: frozen and non-frozen. It makes salad dressings and varied dips beneath the Marzetti model, frozen breads beneath the Sister Schubert’s and New York manufacturers, in addition to caviar, noodles, croutons, flatbreads, and different bread merchandise beneath quite a lot of smaller manufacturers.

The Marzetti and New York manufacturers are money cows for Marzetti, providing its core merchandise, together with dips and dressings, in addition to croutons and frozen breads. The corporate sells what quantities to meal equipment and does it very properly.

Supply: Investor presentation

Nevertheless, The Marzetti Firm additionally has partnerships with main client manufacturers like Olive Backyard, Jack Daniel’s, Buffalo Wild Wings, and Weight Watchers (WW), licensing the respective logos to provide merchandise for grocery retailer cabinets. A portion of the proceeds of those merchandise goes to the license house owners, however these agreements are a approach for Marzetti to diversify away from its core manufacturers.

Marzetti’s market capitalization is $4.9 billion, and the corporate has generated $1.9 billion in income over the past 12 months. Most of Marzetti’s gross sales are made within the U.S., so forex danger just isn’t an element. The corporate sells its merchandise via the retail and foodservice divisions, providing each frozen and non-frozen merchandise via these channels.

Marzetti holds management positions in its core manufacturers, together with New York, Sister Schubert’s, Flat Out (flatbreads), and Marzetti, whereas focusing extra on progress via its smaller manufacturers and acquisitions.

Development Prospects

Marzetti reported fiscal Q3 2025 web gross sales of $457.8 million, a 2.9% lower from $471.4 million in Q3 2024, pushed by the exit from perimeter-of-the-store bakery product traces in March 2024, a later Easter vacation shifting retail gross sales, and a difficult client atmosphere with decreased foodservice visitors. Retail phase gross sales fell 2.6% to $241.5 million (0.7% excluding exited product traces), whereas Foodservice gross sales dropped 3.2% to $216.3 million, together with $2.1 million from a brief provide settlement tied to the February 2025 acquisition of a sauce and dressing facility in Atlanta. Internet revenue rose to $41.1 million, or $1.49 per diluted share, from $28.3 million, or $1.03 per share, boosted by the absence of the prior 12 months’s $12.1 million restructuring costs, although tempered by $1.3 million in acquisition prices. The corporate didn’t present particular This fall steerage, however anticipates Retail progress from licensing packages and Foodservice collaboration on new menu gadgets.

Gross revenue elevated 1.4% to a report $106.0 million, pushed by value financial savings and modest value deflation, regardless of decrease gross sales volumes and startup prices for the brand new facility. Promoting, common, and administrative bills decreased 2.0% to $56.1 million, reflecting decrease compensation prices, although offset by $1.7 million in acquisition-related charges. Working revenue grew 41.9% to a report $49.9 million, aided by greater gross revenue, decreased SG&A, and the absence of final 12 months’s restructuring costs. The Retail phase’s working revenue was $45.6 million, down from $47.3 million, whereas Foodservice working revenue rose to $28.1 million from $24.3 million, supported by core nationwide chain accounts.

The corporate maintained a powerful steadiness sheet, with money and equivalents at $124.6 million and whole property of $1.28 billion as of March 31, 2025. Marzetti Colony invested within the acquisition of the Atlanta facility to reinforce operational effectivity and capability. The Board declared a quarterly dividend of $0.95 per share, reflecting a 5.6% enhance, underscoring its dedication to shareholders. Regardless of client challenges, the corporate’s strategic give attention to innovation, licensing packages equivalent to Chick-fil-A and Texas Roadhouse, and its new manufacturing facility place it for sustained progress and resilience in a dynamic market.

Marzetti’s earnings progress has been spotty as a result of it’s closely reliant on unstable restaurant gross sales. Subsequently, the corporate has made quite a few acquisitions previously to not solely develop its portfolio but in addition to make its income extra predictable.

Supply: Investor Presentation

We anticipate a 5% common annual earnings progress over the subsequent 5 years, with almost all of this progress pushed by income progress. We additionally notice that Marzetti’s progress is unlikely to be linear, as expertise has proven that some years are more likely to exhibit declines, whereas others are more likely to present sizable will increase.

Over time, Marzetti has confirmed it might probably develop via quite a lot of environments, together with a pandemic, and we don’t see that as altering anytime quickly.

Aggressive Benefits & Recession Efficiency

Marzetti’s aggressive benefits are primarily derived from its distributor partnerships with main retailers equivalent to Walmart (WMT) and McLane Distributors, in addition to its management positions in classes together with croutons, frozen bread merchandise, and dressings.

Marzetti constructed a distinct segment in these classes through the years. Whereas its heavy reliance upon two distributors for one-third of its income is a possible danger, it additionally means the corporate’s rivals don’t essentially have the identical entry to these massive clients. Certainly, we see Marzetti’s publicity to Walmart as a web optimistic, as Walmart enjoys rising grocery gross sales.

Marzetti is in a powerful place inside its core classes, however that doesn’t make it resistant to recessions. Earnings per share throughout and after the Nice Recession are under:

• 2007 earnings-per-share of $1.45 (lower of 42% from 2006)
• 2008 earnings-per-share of $1.28 (lower of 12%)
• 2009 earnings-per-share of $3.17 (enhance of 147%)
• 2010 earnings-per-share of $4.07 (enhance of 28%)

Income carried out comparatively properly throughout this era, as Marzetti didn’t expertise any important declines. Income elevated in 2008 in comparison with 2007. Nevertheless, pricing and the price of items suffered, leading to a lower in margins. This led to the earnings declines Marzetti skilled in 2007 and 2008. Notably, the rebound was swift and decisive in 2009 and 2010.

It is usually vital to notice that Marzetti has a rock-solid, virtually debt-free steadiness sheet. Because of this, the corporate can simply endure tough financial intervals and wait patiently for a restoration.

Nonetheless, Marzetti is way from recession-proof as a result of it sells merchandise to foodservice clients, which undergo mightily throughout recessions and would thus order much less from Marzetti, and customers who might turn out to be cash-strapped throughout recessions and eschew the meals equipment that the corporate provides.

Marzetti, nonetheless, proved markedly resilient all through the coronavirus disaster, with only a 9% lower in earnings per share in 2020 and report earnings per share anticipated in fiscal 2024.

Valuation & Anticipated Returns

We anticipate Marzetti to attain a report earnings per share of $6.70 in fiscal 2025, due to an anticipated restoration in gross sales and a pointy easing of value inflation. Shares are at the moment buying and selling at 26.8 occasions this 12 months’s EPS estimate, which is decrease than our honest worth estimate of 28 occasions EPS. If the inventory trades at our assumed honest valuation degree in 5 years, it can yield a 1.5% annualized return.

Given additionally 5% earnings-per-share progress and a 2.1% dividend yield, the inventory might supply a complete annual return of 8.6% over the subsequent 5 years. Because of this, the inventory receives a maintain score.

Closing Ideas

Marzetti is undoubtedly not a high-yield revenue inventory, given its low yield; nonetheless, it does have a powerful monitor report of dividend progress. Sadly, the present yield just isn’t excessive sufficient to justify a place solely primarily based on the dividend. Then again, the promising EPS progress expectations and the affordable valuation of this Dividend King render it engaging round its present worth.

Extra Studying

The next databases of shares comprise shares with very lengthy dividend or company histories, ripe for choice for dividend progress traders.