The Marzetti Company Raises Dividend 5.0% to $1.05

The Marzetti Company raised its quarterly cash dividend 5.0% to $1.05 a share from $1.00. MZTI shares will trade ex-dividend on December 4, 2026, and the payment is due December 31, 2026. The new rate equates to an annual dividend of $4.20.

Why the dividend changed

Chief Executive David Ciesinski said the increase reflected the company’s “continued strong financial position.” The board acted despite a difficult opening quarter for fiscal 2027, making the increase a statement about balance-sheet capacity and the durability of cash returns rather than a response to accelerating near-term profit. The company’s dividend declaration described the coming payment as part of its long-running regular dividend program.

Recent results provide a more complicated operating backdrop. First-quarter consolidated sales declined 2.4% to $481.5 million, while diluted earnings fell to $1.07 from $1.71. Management attributed the pressure to a cyclospora outbreak, reduced production volumes, sharply higher diesel and freight costs, and commissioning expenses for additional sauce-and-dressing capacity in Atlanta. The newly acquired Bachan’s Japanese barbecue sauce business added sales and helped offset weakness elsewhere, according to the first-quarter earnings release.

Management said the outbreak’s effect had moderated, but freight remained a headwind. It expected retail sales to benefit from Bachan’s and new products, while foodservice sales would receive support from selected quick-service restaurant customers. Pricing and cost-saving programs were intended to mitigate commodity and freight inflation. The dividend increase therefore sits alongside spending on capacity, acquisition integration, debt reduction and share repurchases, rather than replacing those uses of cash, according to the first-quarter call transcript.

The action was not caused by a stock split, merger or spin-off. The Marzetti Company is the renamed former Lancaster Colony Corporation, but the name change did not reset the dividend history or alter the economics of the payment, according to the company’s investor-relations overview.

Dividend track record

The payment history shows a deliberate annual step-up pattern. Four payments of $0.95 ran from December 5, 2024, through September 8, 2025. The rate then moved to $1.00 for the next four payments before the latest increase to $1.05. That cadence indicates one principal increase a year rather than small changes throughout the year.

Full-year dividends rose from $2.85 a share in 2020 to $3.05 in 2021, $3.25 in 2022, $3.45 in 2023, $3.65 in 2024 and $3.85 in 2025. Annual growth moderated from 7.0% in 2021 to 5.5% in 2025, while the five-year annualized dividend growth rate was 6.3% annual growth. The sequence shows consistent increases, but at a gradually slower percentage pace.

The company says it has increased its regular cash dividend for 64 consecutive years, a longer record than the recent payment series alone captures. That company-reported figure is stated in the declaration release.

Is the dividend covered?

The dividend consumes 63% of earnings. That leaves earnings coverage for the payment while committing a majority of profit to shareholders. The ratio is not so low that operating performance is irrelevant: weaker earnings, acquisition costs and freight pressure can affect the cushion even when the current payment remains covered.

SmarterDividends rates the dividend A, with a safety score of 88. That places MZTI in the very safe range of 80-100. The grade reflects strong dividend safety, while the earnings payout ratio remains the clearest figure to monitor as the company works through its current operating pressures.

Yield and valuation

At a share price of $110.97, the forward yield is 3.78%, compared with a 3.08% median for the Consumer Defensive sector. The difference means the shares provide more forward dividend income than the sector midpoint at the stated price. The annual income from 100 shares is $420.00.

SmarterDividends estimates fair value at $173.61 and classifies the shares as undervalued, representing 56% upside to fair value. That estimate follows a 33.5% loss in the one-year price return. It is a valuation comparison, not a forecast of when or whether the market price will reach the estimate.

What to watch

The immediate date is December 4, 2026, when the shares trade ex-dividend for the December 31 payment. After that, the fiscal second-quarter update expected in February will show whether the moderation in the cyclospora disruption translated into improved volumes and whether freight costs continued to weigh on margins. Management identified both issues as important near-term variables on the earnings call.

Investors can also track the Bachan’s integration, new product launches, pricing actions and cost savings, along with commissioning of the expanded Atlanta capacity. These items affect earnings coverage because they determine how quickly operating pressure eases while the company continues funding dividends, investment, debt reduction and repurchases.