This Magnificent Dividend Stock Is Trading Close to a Once-in-a-Decade Valuation. Is It a Buy?

With artificial intelligence, gene-editing biotechnology, humanoid robots, and more, there are plenty of mind-blowing things to invest in these days. But boring businesses can make money for investors as well. And one of the most boring, surefire businesses out there is seasoning and spices giant McCormick & Company (NYSE: MKC).

McCormick reported financial results for its fiscal first quarter of 2024 on March 26, and the market responded enthusiastically. Therefore, the stock isn’t quite as good a deal as it was just days ago. However, shares still trade near a once-in-a-decade valuation by one important metric.

It is one of the best dividend stocks in the world (more on that in a moment). And as of this writing, its dividend yield is about 2%. This means that for every $1,000 investment, shareholders can expect $20 in annual income. As the chart below shows, the dividend yield has been above 2% for a few months now, which is the first time it’s been this high in almost a decade.

MKC Dividend Yield Chart

Talking about its yield is appropriate because McCormick is a magnificent dividend stock. In November 2023, the company increased its quarterly payout, the 38th straight year that management has raised it. Few companies can match that streak.

When a dividend stock of McCormick’s caliber trades at a rare valuation, it’s worth examining whether it’s a good investment. And as I’ll explain, this could be a solid addition to a dividend portfolio right now.

What to know about McCormick’s business

McCormick seemingly dominates shelf space at the grocery store with its variety of labels for seasonings and spices. The company owns its eponymous brands as well as others, such as Old Bay, French’s, Frank’s RedHot, and more. It owns other food brands as well, such as Zatarain’s and Thai Kitchen.

Given the variety in its products and branding, the company is constantly experimenting. It launches new products with existing branding, acquires other brands, and even divests brands at times. This constant tinkering doesn’t necessarily result in outsize revenue growth, but it often…

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