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When you read articles titled “The Best Dividend Stocks Under $10,” the lists are usually filled with terrible long-term investments that steadily lose value and slash their payouts.
Mortgage REITs, struggling real estate trusts, and heavily indebted manufacturing firms always seem to make the cut.
So what if I told you there’s a stock that climbed from $2.05 to $10.40 per share over the past decade and it’s not some high-flying tech startup? In fact, it’s a well-established consumer staples company that dates back to 1978.
The one caveat?
This business trades over the counter. However, it’s fairly liquid and can be bought or sold on major brokerage platforms like Fidelity.
The company in question: Armanino Foods of Distinction, Inc. ($AMNF).
Armanino Foods of Distinction produces and markets meatballs, frozen pasta, and sauces.
It’s a relatively small company, but it has consistently expanded its operations. More importantly, it has exceptional management, especially for the food sector, as Armanino operates completely debt-free.
What’s more, management is committed to rewarding shareholders with consistent dividend increases, along with the occasional special distribution.
Here’s a full breakdown of what the company does and how its fundamentals stack up.
Armanino Foods of Distinction produces pestos and sauces, meatballs, pasta, and grated cheeses. While the company was founded in the 1970s, it remained largely regional for decades. In recent years, however, it has expanded to serve retailers across North America.
Additionally, Armanino’s sauces are used by restaurants, pizzerias, and fast-food chains.
Unlike many food companies that focus on acquisitions and shelf dominance, Armanino has carved out a niche as a disciplined, well-managed operator.
The company carries no debt, generates strong cash flow, and is led by executives who prioritize shareholder returns. It has also delivered a market-beating 10-year average annual total return of 21.33%.
Despite this performance, the stock remains reasonably valued, with a price to earnings ratio of just 18.77.
Armanino’s current dividend yield of 1.92% may seem low, but the company boasts a 5-year compound annual dividend growth rate of 17.61% and a conservative payout ratio of 36%.
It also paid a special dividend in 2024 and raised its dividend by 25% last September.
Food producers are often viewed as “safe haven” investments, but the sector has delivered weak long-term results. Shares of Hormel Foods, The Campbell’s Company, and Conagra Brands are all down over the past decade.
Meanwhile, Armanino Foods of Distinction has delivered market-beating returns while maintaining a pristine balance sheet.
If you’re looking to invest in a food company, or you simply want a quality dividend stock trading around $10 per share, Armanino Foods of Distinction is worth a look. It’s a market-beating business with inflation-beating dividend growth, zero debt, and a portfolio of straightforward consumer staple products.
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Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.
