The Crowd Is Selling Campbell's Stock. Here's Why It's a Buy Instead.
The Crowd Is Selling Campbell's Stock. Here's Why It's a Buy Instead.
Catie Hogan, The Motley FoolWed, August 19, 2026 at 2:51 PM UTC
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Key Points -
The stock price of The Campbell's Company has fallen by nearly 50% over the past five years.
In 2024, the company acquired the company behind the Rao's Homemade brand, which continues to grow in popularity.
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The soup has gone cold, or at least that's what The Campbell's Company(NASDAQ: CPB) stock has felt like over the past few years. Shares of Campbell's have fallen nearly 30% in the past 12 months, and almost 50% over the last five years. The bear case is simple: Sales are falling, margins are compressing, and tariffs created an unexpected headwind for the business. Still, I think this more than a century-old consumer staples company is a buy for long-term investors.
First, at the current share price, Campbell's dividend yield is nearly 7%. It offers a consistent quarterly payout of $0.39 per share. Campbell's funds its dividend with stable cash flow from operations. The consumer staples company reported $839 million in cash generated over the first nine months of its fiscal 2026. Despite tough economic conditions, the dividend isn't at risk.
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The stock is also relatively cheap, as it trades at a forward P/E of 12, a trailing P/E ratio of 11, and a PEG ratio of less than 1. In June, Campbell's was added to both the Russell 2500 and Russell 2500 Value indexes, potentially improving investor confidence and visibility.
Image source: Getty Images.
More importantly, Campbell's management has a turnaround effort underway. The company bought Sovos Brands, the owner of the hugely popular Rao's Homemade sauce and pasta brand, back in 2024, and took a 49% stake in La Regina -- the company that manufactures Rao's products -- late in 2025. This has been a growth bright spot for Campbell's. Rao's recently topped $1 billion in annual net sales.
Management is well aware of the inflationary pressures it faces and the company's overall underperformance, and is taking corrective actions to improve Campbell's operational efficiency.
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Campbell's looks oversold in my opinion, and with the continued growth of the much-loved Rao's brand, as well as a portfolio that includes some timeless snacks like Pepperidge Farm cookies and Goldfish crackers, Campbell's is primed for a comeback.
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Catie Hogan has no position in any of the stocks mentioned. The Motley Fool recommends Campbell's. The Motley Fool has a disclosure policy.
Source: “AOL Money”
