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Smucker’s: A Legacy of Quality in Processed and Packaged Goods

Founded in 1897 in Orville, Ohio, JM Smucker Company has established itself as a leader in the processed and packaged goods industry. With over 4,875 full-time employees and revenues of $5.72 billion in 2013, Smucker's is synonymous with quality, famously stated, "With a name like Smucker’s, it has to be good." Competitors include Starbucks, Green Mountain Coffee, and Mondelez. Utilizing the Dividend Discount Model and a cost of equity capital at 7%, the equity valuation of Smucker's reflects its strong market position and potential for growth, underscoring its enduring legacy.

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Smucker’s: A Legacy of Quality in Processed and Packaged Goods

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  1. JM SmuckerProcessed & Packaged Goods Connor Myers

  2. “With a name like Smucker’s, it has to be good”

  3. Background • Founded in 1897 in Orville, Ohio. • Full-Time Employees: 4,875 • Revenues of 5.72 Billion Dollars in 2013

  4. Comparable Companies (Processed & Packaged Goods) • Starbucks (SBUX) • Green Mountain Coffee (GMCR) • Mondelez (MDLZ)

  5. Valuation of Equity • Vent – Vd = Veq • Vent = 11,682,794 • Vd (NFL) = 1,879,354 • Veq = 9,803,440

  6. Value Line Numbers

  7. Value Line Projections

  8. Equity Valuation using Dividend Discount Model Cost of Equity Capital (from Mod 6): 7% Voeq = $103.52

  9. Equity Valuation using Dividend Discount Model Voeq = $127.63

  10. Solving for g Voeq from Value Line = 99.34 Plug and Chug g = -0.821%

  11. Long Term Growth CIt+1 = $9.10 1 + gincome = (9.10/8.73) = 1.0423

  12. Sensitivity Analysis

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