Dividend Aristocrat Overview: McCormick & Company, Inc.

About McCormick & Company

McCormick & Company markets spices around the world. Photo courtesy Tim Sackton via Flickr.

McCormick & Company markets spices around the world.
Photo courtesy Tim Sackton via Flickr.

McCormick & Company is one of the world’s leading spice and flavor companies.  It markets its products in North America through a variety of brands including Old Bay, Lowry’s, Zatarain’s, and the eponymous McCormick’s.  Other brands around the world include Schwartz (in the United Kingdom), Silvo (in the Netherlands), Kamis (in Poland), Kohinoor (in India), and McCormick China.

McCormick’s began in 1889 when Willoughby M. McCormick and three co-workers began selling flavors and extracts door to door.  15 years later, in 1904, the Great Baltimore Fire nearly put the company out of business, but McCormick rebuilt the company factory in Baltimore.

Over the next 110 years, the company expanded through acquisitions and partnerships across the world, first to Mexico, South America and Canada and then, in the 1960s to Europe, Australia and the Pacific Rim.  McCormick continued to expand across the world, with additional acquisitions and joint ventures in Mexico, Finland, Indonesia, India, Switzerland, Australia, and China in the 1990s.

The company is headquartered in Hunt Valley, Maryland in suburban Baltimore.

The company has been a member of the S&P 500 index since late 2010 and trades under the ticker symbol MKC.

McCormick’s Dividend and Stock Split History

McCormick began increasing dividends in 1987 and was added to the S&P 500 in December 2010.  In 2011 – the 25th consecutive year of annual dividend increases – the company was added to the list of S&P Dividend Aristocrats.  Since 2004, the company has announced a regular dividend increase late in the year and paid out the increased dividend in the first quarter of the calendar year.  The most recent dividend increase was paid in January 2014 when the company paid a quarterly dividend of 37 cents, up 8.8% from the prior quarter.

This increase is in line with but slightly lower than increases in recent years.  In 2013, McCormick increased the dividend by 9.68% to an annualized rate of $1.36 from $1.24 the prior year.  In the five years from 2009 – 2014, the stock has a compounded annual dividend growth rate (CADGR) of 9.04%.  Over the last 10 and 20 years, McCormick has compounded their dividends by 10.21% and 9.52%, respectively.  Over the last 25 years, McCormick has a compounded dividend growth rate of 12.11%.

McCormick has split its stock 2 for 1 four times: in April 1988, January 1990, January 1992, and April 2002.  One share of stock purchased at the beginning of 1988, when the company paid out $0.78 per share in dividends would now be 16 shares that will pay a total of $23.68 in dividends in 2014.

In addition to the dividend growth history above, McCormick has paid quarterly dividends continuously since 1925.

Direct Purchase and Dividend Reinvestment Plans

McCormick & Company has both a direct purchase and dividend reinvestment plan for non-voting stock, both of which are administered by Wells Fargo.  The minimum investment is $500 for initial purchases and $50 for subsequent direct purchases (as opposed to dividend reinvestment).

Both plans have purchase and sales fees.  Compared to other Dividend Aristocrats, these fees are relatively modest.  There is a $15 fee to establish a direct purchase fee, and there is a 6 cent per share fee on all direct purchases.  When selling shares, investors will pay a $15 fee per transaction, along with a 12 cent per share fee.  There is an additional $5 fee for the direct deposit of sales proceeds into your account.

Helpful Links

McCormick & Company’s Investor Relations Website

Current quote and financial summary for McCormick & Company

Information on the direct purchase and dividend reinvestment plans for McCormick & Company