Kellogg Company (NYSE: K) is a name you probably associate with cereal, but its cereal brands account for only about one-third of its revenue today because Kellogg has been diversifying, focusing on more growth-oriented areas.
Frozen foods, including meatless alternatives, now make up around 13% of revenue. And snacks, including brands like Pringles and Cheez-It, account for just over half of the revenue pie.
Meanwhile, Kellogg has adapted to the changing market, jettisoning older brands with slower growth rates, such as Keebler.
Despite its big overhaul, Kellogg has continued to reward investors with regular dividend increases.
It has paid quarterly dividends without interruption for nearly 100 years, and has boosted its payout annually for most of the past 17 years. The dividend recently yielded a hefty 3.7%.
To be fair, Kellogg’s overhaul is relatively recent, and the food industry has been through an unusual period, first with the coronavirus and now with rising inflation.
So Kellogg really hasn’t had a chance to demonstrate how its new approach works in a more typical environment. But it does seem to be going in the right direction.
Investors, however, have been in a “show me” mood, and Kellogg’s stock was recently around 24% below its 2016 highs. If you’re looking for a company with a proven record of prioritizing its dividend, Kellogg is worth a closer look.
Ask the FoolQ: I have a Roth IRA. If I sell a stock in it at a loss, may I deduct the loss on my tax return? – G.H., St. Joseph, Michigan
A: Nope. In a regular taxable brokerage account, if your losses exceed your gains, you can offset up to $3,000 of income, carrying any excess forward to future years. But IRAs work differently, and do not permit deducting losses.
IRAs offer other benefits, though. Traditional IRAs give you an upfront tax break, letting you shrink your taxable income by the amount of your contribution.
Roth IRAs, if you follow the rules, let you withdraw money in retirement tax-free.
That can be a big deal if you’ve grown the account to be worth many thousands of dollars. Learn more about IRAs and retirement topics at Fool.com.
Q: What are NFTs? – R.T., Lake City, Florida
A: Non-fungible tokens (NFTs) are complicated, but in a nutshell, each NFT is a unique digital asset, representing ownership of a specific asset.
It’s recorded via blockchain technology, like cryptocurrencies, but whereas one Bitcoin is interchangeable with another (just as one dollar is interchangeable with any other), there is only one of each NFT.
NFTs exist for a wide range of digital material, such as art and music (including GIFs and video clips), along with other collectibles. They’ve grown in prominence as more people have begun selling – and buying – NFTs.
Twitter co-founder Jack Dorsey, for example, sold his first tweet, autographed, as an NFT for more than $2.9 million.
The fact that the tweet merely says “just setting up my twttr” demonstrates that NFTs can seem very – well, speculative. They’re probably best avoided by average investors.
My Dumbest InvestmentI bought Facebook at its initial public offering (IPO). It lost a little bit after that, so I sold my shares. It was a classic short-term reaction, with me being blind to my long-term objective – building wealth. I can’t even look at Facebook’s stock price now – it just makes me want to cry. – D., online
The Fool responds: It looks like you learned all the right lessons. Short-term investors often miss out on phenomenal gains that occur over many years or decades.
Facebook’s debut on the public market in 2012 didn’t go as smoothly as hoped.
The stock, initially priced at $38 per share, started trading at $42.05, reflecting great interest and demand. (It was the third-largest U.S. IPO, at the time, with the company valued around $104 billion.)
Three months later, though, the shares had dropped 50%, in part due to questions about the company’s lofty valuation and to allegations that financial information had not been properly disclosed.
Many stocks soar at their IPOs only to retreat in the following months. It’s generally smart to avoid IPOs, giving the shares time to settle down.
And once you invest in a company in which you have great faith, hang on – for a long time and through ups and downs.
Facebook shares were recently up more than 800% from where they began trading.