CAMPBELL SOUP CO. $29 – New York symbol CPB

CAMPBELL SOUP CO. $29 (New York symbol CPB; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 350.3 million; Market cap: $10.2 billion; Price-to-sales ratio: 1.3; WSSF Rating: Above Average) is the world’s largest maker of canned soups. It also makes Prego canned pasta and sauces, Pepperidge Farm cookies and V8 vegetable juices.

Like Heinz Campbell plans to spur growth by expanding overseas. International markets now supply 30% of its revenue. It is particularly interested in Russia and China, where soup is popular.

As a result of its growing international operations, unfavourable currency rates held back Campbell’s earnings by $0.04 a share in its third fiscal quarter, which ended May 3, 2009. The company’s sales fell 10.3%, to $1.7 billion from $1.9 billion. Currency rates accounted for about half of the decline.

Campbell earned $171 million in the latest quarter. That’s up 11% from $154 million a year earlier. Its earnings per share rose 20%, to $0.48 from $0.40, on fewer outstanding shares. These figures exclude a gain on the sale of its Godiva chocolate business and other unusual items.

Strong demand for Campbell’s low-sodium soups and other healthier foods should help it compete with low-cost generic brands. The stock trades at 13.4 times Campbell’s likely 2009 earnings of $2.17 a share. Its $2-billion long-term debt is a low 20% of its market cap. The $1.00 dividend yields 3.4%.

Campbell Soup is a buy.