U.S. Food: Paying dividends ... or not - how do our companies look in terms of payout ratios?

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U.S. Food: Paying dividends ... or not - how do our companies look in terms of payout ratios?

30 June 2026

U.S. Food

U.S. Food: Paying dividends ... or not - how do our companies

look in terms of payout ratios?

We recently became more cautious on the outlook for U.S.-centric packaged food names Alexia Howard

+1 917 344 8453 due to the recent spike in U.S. trucking freight costs (which now typically represent ~10%

alexia.howard@bernsteinsg.com of COGS) in an environment where the companies’ ability to pass on such cost increases

may be compromised by heightened consumer and retailer sensitivity to rising grocery

Cinnie Lin prices, especially for food brands that are growing more slowly than retailer comp store sales

+1 917 344 8567

cinnie.lin@bernsteinsg.com growth in the U.S. Volumes for these larger U.S. packaged food players are also trending

more negatively, based on a combination of factors. In this report, we take a closer look at

how dividend payout ratios and leverage are trending across our coverage.

Across our coverage, we think that Conagra is most likely to cut its quarterly

dividend. On an annualized basis, the current dividend payout of $1.40 is over 90% of

2026-2027 average FCF and over 85% of expected EPS. Additionally, the company’s net

debt/EBITDA is the highest amongst the group at 4.2x and it has $762m (~10% of its total

debt) of debt that needs to be financed in the next twelve months.

Campbell’s and General Mills have also seen negative earnings trends and an

elevation in their dividend payout ratios in recent years. For Campbell’s, the family still

appears to own at least a quarter of the shares outstanding and are likely to be highly averse

to a dividend cut.

Tyson also currently has its $3.88 annualized dividend payout sitting at 91% of