What to Do with Excess Cash in a Low-Rate Economy?

Walk down the grocery aisles and you will see B&G products.

There are few days that cash is king. At the present time our accounts hold a total of about 4% cash. Most of the time I don’t want our cash holdings to creep up much higher than 5%. However, I don’t want to have 0% cash, because there may be an opportunity that requires cash. Today I bought 100 shares of BGS strictly for the dividend. The yield is just over 6%, and BGS is unlikely to fail as a business.

Not too long-ago shares were selling for more than $37 per share, so I bought my shares at a price I think is reasonable: $31.85. If the price rises dramatically, I will likely sell if the gain is at least 6%. However, the Ex-dividend date is 03/30/21, so I expect to get at least one dividend before I sell my shares.

Quant Factor Grades from Seeking Alpha Premium subscription.

This is not the first time I have owned BGS. Over the years I have purchased shares, collected the dividends, and then sold the shares. If the share price drops dramatically, my loss won’t be enough to rattle me. I’ve learned that patience can be a wonderful friend when it comes to the ups-and-downs of the market.

Don’t buy BGS for a growing dividend. It isn’t likely.

B&G Foods, Inc. Company Profile

It is likely that you never heard of B&G. However, if you have been to a grocery store, you have seen B&G products.

B&G Foods, Inc. manufactures, sells, and distributes a portfolio of shelf-stable and frozen foods, and household products in the United States, Canada, and Puerto Rico. The company’s products include frozen and canned vegetables, oatmeal and other hot cereals, fruit spreads, canned meats and beans, bagel chips, spices, seasonings, hot sauces, wine vinegars, maple syrups, molasses, salad dressings, pizza crusts, Mexican-style sauces, dry soups, taco shells and kits, salsas, pickles, peppers, tomato-based products, baking powder and soda, corn starch, cookies and crackers, nut clusters, and other specialty products.

It markets its products under various brands, including Ac’cent, B&G, B&M, Back to Nature, Baker’s Joy, Bear Creek Country Kitchens, Brer Rabbit, Canoleo, Cary’s, Clabber Girl, Cream of Rice, Cream of Wheat, Crisco, Dash, Davis, Devonsheer, Don Pepino, Durkee, Emeril’s, Farmwise, Grandma’s Molasses, Green Giant, JJ Flats, Joan of Arc, Las Palmas, Le Sueur, MacDonald’s, Mama Mary’s, Maple Grove Farms of Vermont, McCann’s, Molly McButter, New York Flatbreads, New York Style, Old London, Ortega, Polaner, Red Devil, Regina, Rumford, Sa-són, Sclafani, SnackWell’s, Spice Islands, Spring Tree, Sugar Twin, Tone’s, Trappey’s, TrueNorth, Underwood, Vermont Maid, Victoria, and Weber and Wright’s.

Full Disclosure

I own 100 shares of BGS.