BGS Stock: 17.46%-Yielder Selling for Rock-Bottom Valuations?
June 11, 2025
A “Boring” But Rewarding Opportunity
Today, I’m putting the spotlight on “boring” BGS stock.
Many investors like to chase the hot stocks.
You know, the stocks that are trying to cater to the artificial intelligence (AI) market, semiconductors, the “Magnificent Seven,” etc. Stocks moving on momentum and noise, while their valuations are generally extremely high.
There’s certainly nothing wrong with participating in the occasional hype trades, but that’s not the way to make passive income. Hot stocks require a lot of work.
Income investors need to pay attention to companies like B&G Foods Inc (NYSE:BGS). It’s a company that’s not getting much love from Wall Street, but it shouldn’t be overlooked.
BGS stock isn’t the most exciting theme out there. But don’t let that fool you—B&G Foods is a textbook example of a boring business that does a great job churning out free cash flow and rewarding shareholders. And right now, BGS stock is selling at a massive discount.
What Does B&G Foods Do?
Headquartered in Parsippany, New Jersey, B&G Foods manufactures, sells, and distributes a portfolio of household products and shelf-stable and frozen foods in the U.S., Canada, and Puerto Rico. Shelf-stable foods are those that can be stored safely at room temperature for an extended period of time and don’t require special handling.
The company owns several well-known brands, including “Green Giant,” “Ortega,” “Cream of Wheat,” “Crisco,” “Dash,” “New York Style,” “Old London,” “Sugar Twin,” “TrueNorth,” “Vermont Maid,” “Victoria,” and “Wright’s.”
B&G markets and delivers its products both directly and through a network of independent brokers and distributors. Its products reach supermarket chains, foodservice providers, big-box retailers, warehouse clubs, non-food retailers, and specialty distributors. (Source: “Profile,” Yahoo! Finance, last accessed June 9, 2025.)
What’s Going on with BGS Stock?
Let’s talk about why this opportunity might be flying under the radar.
BGS stock is down about 30% year to date. It’s been a painful slide, no doubt. But here’s what most investors miss: the decline in share price isn’t because B&G Foods business is falling apart—it’s mostly a combination of industry headwinds, macroeconomic pressures, and investors getting impatient.
Here’s the thing: B&G Foods remains profitable.
In the first quarter of 2025, the company reported net income of $0.8 million, or $0.01 per diluted share. This is compared to a net loss of $40.2 million, or $0.51 per diluted share, in the same period a year ago. (Source: “B&G Foods Reports Financial Results for First Quarter 2025,” B&G Foods Inc, May 7, 2025.)
Moreover, B&G Foods is responding to all the headwinds in the way a well-run company does; by cutting costs, streamlining business, focusing on profitability, and ditching non-performing product lines.
Chart Courtesy of StockCharts.com
This Income Pick Offering a 17.46% Yield
Here’s the part income investors should love: BGS stock offers a robust dividend yield. At the current price, it’s 17.46%, paying $0.76 per share on annual basis.
With a mere investment of $462.00 (100 shares), an investor could generate annual income of $76.00 with BGS stock.
Is this dividend safe?
When a company’s dividend yield is over 15%, it’s important to ask this question, because sometimes it can become difficult for the company to sustain the payment.
When it comes to B&G Foods, its dividend is safe for now. The company declared its 83rd consecutive quarterly payment in mid-May, and there was no change to the quarterly dividend. It was $0.19 per share.
In addition to this, the company’s cash flow generation from operations remains robust, which is where the dividends generally come from. This makes the dividend safer, too.
Selling for a Massive Discount
Beyond all of this, BGS stock is selling at a significant discount. In fact, it wouldn’t be wrong to say this stock is selling for “bargain bin” prices compared to the hot names on the stock market these days.
At the current price, BGS stock trades at a price-to-sale (P/S) ratio of just 0.18. This essentially means that investors are valuing each $1.00 of sales at B&G Foods at just $0.18. This is a steep discount from the stock’s five-year average of 0.48. (Source: “Valuations,” Morningstar, last accessed June 9, 2025.)
If you look at other valuation measures, you’ll see that they suggest the same thing: BGS stock is trading at rock-bottom valuations.
The Lowdown on BGS Stock
BGS stock isn’t going to double overnight. This isn’t a speculative trade—it’s a potential investment idea for those looking to generate decent income and capital growth over time.
With BGS stock, an investor gets:
- A well-known brand
- A reliable dividend
- Shareholder-friendly management
- Rock-bottom valuations
Is there risk in holding on to BGS stock?
Of course there is. But with a strong balance sheet and its proven ability to adapt, B&G Foods has plenty of staying power.
Maybe this is why institutional investors are heavily invested in B&G Foods. As per the most recent data, close to 77% of all outstanding shares were owned by institutional investors. The top three holders of BGS stock are BlackRock Inc, with 12.36 million shares, The Vanguard Group, Inc., with 6.04 million shares, and Dimensional Fund Advisors LP, with 3.59 million shares. (Source: “Holders,” Yahoo! Finance, last accessed June 9, 2025.)
