SJM Stock's Dividend Is Rising Just as It Hit Our Buy List

If you're looking for rock-solid stocks that provide the opportunity for price appreciation and income, one metric to use is dividend hikes.

And right now, one stock is on the verge of hiking its quarterly dividend by a whopping 9%.

SJM StockJ.M. Smucker Co. (NYSE: SJM) is about to hike its dividend for the 21st year in a row. The company will increase its dividend from $0.78 to $0.85 per share for investors of record on Aug. 16.

The payment will be distributed on Sept. 4.

Now, the dividend hike is newsworthy.

But Wall Street is missing why SJM is one of the best long-term stocks to buy right now.

Here's the real story...

Why SJM Just Made Our "Buy Zone"

J.M. Smucker has been around since 1897, but its best years are likely well ahead of it...

It is a major producer of popular brands like Folgers, Pillsbury, and Jif peanut butter.

But its latest splash has come in the ever-growing pet foods business.

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The company owns Meow Mix, Milk-Bone, and Natural Balance, and its $1.8 billion purchase of Ainsworth Pet Nutrition in April is a huge boost to future profitability.

Ainsworth is a pet food company established by celebrity chef Rachael Ray that carries 70 different nutrition products for dogs and cats. Ray has a large presence in PetSmart stores around the country.

The U.S. pet food industry alone is set grow to $30 billion by 2022, according to Zion Market Research.

And J.M. Smucker is well positioned to rake in even more revenue from the industry's explosive growth.

This company is a clear buy, and other analysts are finally catching on...

Here's How High the SJM Stock Price Could Climb

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Last week, Susquehanna Bank analyst Pablo Zuanic issued a "Buy" rating on the stock and raised his price target to $130 per share.

Zuanic has praised the company's strategic purchase of Ainsworth.

"The deal improves the brand's profile of the SJM pet food/treats business and enhances the growth profile. The deal increases SJM's total pet food/treat sales by 36%, doubles its share in dry dog to 17% (Mars 24%; Nestle 40%). Importantly, with $800Mn in sales, Ainsworth will triple SJM's sales in "natural/premium" pet food from the current $400Mn (Nature's Recipe $150Mn and Natural Balance $300Mn)," Zuanic wrote in an April research note.

The analysts projected that it would offer a $3 boost to earnings per share over the long term.

From yesterday's (Aug. 14) opening price of $111.08, that's a potential profit of 17.03%.

Keep in mind, that's just in the next 12 months, and that doesn't include the dividend payout, which currently has a yield of 3.04%.

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In this market, it's not easy to find a dividend-paying stock that also offers potential price appreciation.

You have that with SJM.

According to our proprietary valuation system, the Money Morning Stock VQScore™, Smucker's currently has a perfect score of 4.

That means it's sitting right in the "Buy Zone."

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