B&G Foods
NYSE: BGS
$3.52 ▲ +0.01  (+0.14%)
At close: Jul 24, 2026 · 3:59 PM UTC
Financial Ratios
Market Cap281.91 Mn
P/E-9.00
P/S0.16
Div. Yield0.22
ROIC (Qtr)0.02
Total Debt (Qtr)2.01 Bn
Revenue Growth (1y) (Qtr)-3.88
Add ratio to table…

About

B&G Foods manufactures sells and distributes a diverse portfolio of branded shelf stable and frozen food and household products across the United States Canada and Puerto Rico. The company offers products that appeal to consumers seeking high quality at reasonable prices. Its branded items are sold through retail channels complemented by institutional foodservice and private label sales. B&G Foods has been in operation for over 130 years building a legacy through both…

Read more ↓
Sector: Consumer Defensive Industry: Packaged Foods CIK: 0001278027

Investment Thesis

▲ Bull case
  • The company completed the sale of the low margin Green Giant U.S. frozen business and used the proceeds to acquire the College Inn and Kitchen Basics broth and stocks businesses which operate in a higher margin shelf stable category. This transaction replaces a volume driven but profit thin segment with a brand portfolio that generates stronger cash flow and better profitability per dollar of sales. The shift improves the overall mix of the portfolio toward products that are less sensitive to promotional volatility and more aligned with consumer trends toward convenient meal bases. As a result the baseline profitability of the combined entity is positioned to rise even if top line growth remains modest.
  • The Spices and Flavor Solutions segment posted double digit sales growth driven by higher volumes and improved mix while the foodservice and private label channels contributed meaningfully to the overall top line. Management noted that seven out of ten internal manufacturing facilities increased output and two others are already ahead of budgeted volumes for the year to date indicating underlying operational momentum. The segment’s adjusted EBITDA rose 13.1% reflecting both volume leverage and favorable pricing dynamics that have begun to offset rising input costs. These trends suggest that the core franchise businesses are gaining traction beyond the temporary boost from the recent acquisition.
  • Selling general and administrative expenses were trimmed through the removal of direct costs tied to divested businesses and a broader effort to reset the cost base to the new size of the company. The dividend was cut by half freeing roughly thirty million dollars of annual cash that is earmarked for debt repayment rather than shareholder payouts. Leverage measured as net debt to pro forma adjusted EBITDA fell from 6.57 times to 6.07 times in the quarter and is expected to drop further once the pending Canadian asset sale closes. These actions strengthen the balance sheet and reduce financial risk while providing management with flexibility to pursue accretive opportunities.
  • The new cost plus contract manufacturing arrangement for the former Green Giant frozen line is delivering a modest but stable profit stream that is expected to persist through the remainder of the fiscal year and beyond. Management highlighted that the agreement provides a predictable contribution to earnings without the volatility associated with own brand sales. Combined with the underlying growth in spices and flavor solutions the company anticipates long term base business trends in the range of flat to plus one% annually. This steady outlook supports the case for a gradual rerating of the stock as investors recognize the improved durability of earnings.
▼ Bear case
  • Input cost pressures especially from crude oil and soybean oil have begun to show signs of inflationary persistence and the company acknowledges it may need to implement pricing actions if these costs remain elevated. The commodity markets for soybean oil have moved to levels not seen since the early twenty twenties creating a material headwind to gross margin that cannot be fully offset by internal cost savings alone. While the company has some forward cover it remains vulnerable to a prolonged period of high energy prices which would force either margin compression or unpopular price increases with retail partners. This dynamic introduces uncertainty to the forward earnings outlook and could erode the benefits of the recent portfolio reshaping.
  • The guidance for the remainder of fiscal twenty twenty six calls for base business net sales to be flat to slightly down reflecting a mature or declining trend in the core categories outside of the recent acquisition. Management attributed part of this expectation to the absence of the fifty third week that boosted the prior year comparators indicating that organic momentum is weak. The reliance on cost cutting and portfolio shuffling to sustain profitability suggests limited intrinsic growth power in the legacy businesses. If the cost saving initiatives stall or reverse the bottom line could face pressure despite the improved mix.
  • Even after the dividend reduction and the proceeds from asset sales the leverage ratio remains elevated at just above six times net debt to pro forma adjusted EBITDA leaving the company with a thin cushion against any downturn in cash flow. The continued deleveraging plan depends on the successful closing of the pending Canadian divestiture and the steady execution of cost reduction initiatives both of which carry execution risk. Should any of these deleveraging drivers falter the firm could find itself constrained by debt covenants or forced to prioritize debt repayment over strategic investments. This leverage overhang makes the equity more sensitive to adverse macroeconomic shifts.
  • The guidance explicitly excludes potential impacts from changes in tariff policy geopolitical tensions in Eastern Europe the Middle East or Latin America and any significant shifts in inflation meaning that external shocks could quickly invalidate the current assumptions. Consumer sentiment indicators suggest pressure on discretionary spending which could translate into weaker demand for packaged foods especially if price increases are needed to cover input costs. The company’s ability to pass through higher costs to retailers remains untested in the current environment and historical precedent shows such negotiations can be difficult. These factors together create a scenario where the stock may be priced for perfection while overlooking a range of plausible downside risks.

Segments Breakdown of Revenue (2026)

Segments Breakdown of Revenue (2026)

Peer Comparison

Companies in the Packaged Foods
S.No. Ticker Company Market CapP/EP/STotal Debt (Qtr)
1 KHC Kraft Heinz Co 30.29 Bn-5.261.2121.13 Bn
2 GIS General Mills Inc 19.35 Bn-2,199.071.0513.47 Bn
3 HRL Hormel Foods Corp /De/ 13.90 Bn29.791.142.86 Bn
4 MKC Mccormick & Co Inc 13.45 Bn18.951.823.61 Bn
5 MICC Magnum Ice Cream Co N.V. 10.95 Bn31.871.183.85 Bn
6 SFD Smithfield Foods Inc 10.34 Bn41.190.662.00 Bn
7 DAR Darling Ingredients Inc. 9.92 Bn57.521.664.13 Bn
8 OTLY Oatly Group AB 8.23 Bn-54.039.210.00 Bn