Motley Fool: Mmm, mmm good dividends

The Campbell’s Co. (Nasdaq: CPB) is known for its flagship soup label, but it also owns several meal and snack brands, including Prego, Rao’s Homemade, Pace and V8, as well as Goldfish, Lance, Snyder’s of Hanover, Pepperidge Farm, Cape Cod and Kettle. It has been diversifying by relying less on salty meals and snacks and by offering products specifically catering to health-conscious consumers.

Shares of Campbell’s (Nasdaq: CPB) are down more than 40% over the past year, though, presenting a tasty opportunity for long-term believers. The depressed stock price has also pushed up the dividend yield, to a recent 7.4%.

What’s going on? Well, Campbell’s overpaid for its 2018 Snyder’sLance acquisition. Costs are going up due to inflation, while management is tempering growth expectations. Campbell’s earnings have been ticking down – though the company has kept its industry-leading market share across many of its key brands.

Although Campbell’s recent results have been poor, the company’s struggles reflect industrywide challenges, not execution errors. Meanwhile, its strong dividend is intact and seems sustainable.

Best of all, Campbell’s stock is attractively valued, with a recent forward-looking price-to-earnings ratio of 11.2, well below its five-year average of 14.2. (The Motley Fool recommends Campbell’s.)

Ask the fool

Q. What’s this “one-time charge” I’m seeing on a company’s financial statement? – S.T., Dover, New Hampshire

A. It’s an accounting adjustment meant to reflect unusual nonrecurring expenses, unrelated to the company’s normal business operations. It might, for example, be tied to restructuring (including layoffs or a plant closing), or to legal proceedings.

Investors often disregard such charges because they don’t reflect the company’s usual business. Some companies report frequent one-time charges, though, which can be problematic, making the company’s finances look better than they really are.

If you notice that a company you’re following is reporting a lot of one-time charges, dig deeper to see what’s going on and whether there are problems afoot. You might focus on its operating profits instead of net profits, as operating numbers don’t include one-time charges.

Q. What does “fintech” refer to? – D.R., Tacoma, Washington

A. The “fintech” term is a mashup of the words “finance” and “technology.” Thus, a fintech business is one that permits consumers or businesses to manage finances digitally, via technologies such as mobile apps, desktop software and/or cloud-computing platforms. These companies are disrupting traditional financial businesses with newer, faster and arguably better financial services.

Fintech enterprises are involved in a wide range of activities, including digital banking, contactless payments, payment processing, lending, wealth management, robo-advising, blockchain technology, cryptocurrencies and brokerage services.

My dumbest investment

My most regrettable investment decision? Not buying and holding bitcoin at $0.05. – A. M., online

The Fool Responds: Yes, looking back now, with bitcoin recently priced around $70,000 per coin, it’s clear that anyone who bought bitcoin way back when would have made a tidy sum. But while hindsight is 20/20, things were much murkier a decade or more ago. Bitcoin’s price was below $0.40 per coin throughout 2010, and no one could have known exactly how it would perform.

Of course, the question for investors today is how the cryptocurrency will perform in the future. It certainly has plenty of fans and advocates, but do a lot of research and thinking before jumping in. For one thing, it’s very volatile. It doesn’t have a long track record to assess, having debuted in 2009. It’s also rather complicated, and it’s best not to invest in anything until you understand it well.

Note, too, that bitcoin and other cryptocurrencies are generally stored in digital wallets, which can be vulnerable to being hacked – and some people have simply lost their passwords, and, therefore, their investments. Remember that many other kinds of investments, such as stocks, bonds or real estate, can offer more safety and reliability.

(Do you have a smart or regrettable investment move to share with us? Email it to TMFShare@ fool.com.)