Down 32% With a 5.5% Yield, Is This High-Yield Dividend Stock Too Cheap to Ignore, and Worth Buying in December?

Shares of Campbell's (NASDAQ: CPB) sold off 5.2% on Tuesday after the soup and snack giant reported first-quarter fiscal 2026 results that disappointed investors. The stock is down 32% year to date and is at its lowest level since the financial crisis of 2008.

The sell-off has pushed Campbell's dividend yield up to about 5.5% -- which is very much in high-yield territory and five times the S&P 500 (SNPINDEX: ^GSPC) dividend yield of 1.1%.

Here's why investors are sour on Campbell's, and if the high-yield dividend stock is a buy in December.

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Campbell's has an excellent portfolio of brands

The Campbell's name is known for its soups and inspired a series of 32 iconic Andy Warhol paintings. But the company is a lot more than just condensed soup, largely thanks to its 2018 acquisition of Snyder's-Lance.

In hindsight, Campbell's overpaid for the chips, pretzels, popcorn, nuts, and cookies company. But the brands have been helpful in diversifying Campbell's revenue streams to focus on delivering value to consumers through four pillars: premiumization, flavor exploration, health and wellness, and cooking and comfort.

The strategy is sound, but consumers are pulling back on spending and seeking value. Retail and grocer pressures have ripple effects for packaged food companies like Campbell's, even as some consumers shift their spending from restaurants to cooking at home.

Campbell's costs are going up due to inflation, but it hasn't been able to fully pass along those cost increases to consumers because they are pulling back on spending. So Campbell's earnings have been ticking down. To its credit, Campbell's has retained industry-leading market share across many of its leading brands. It is also leaning into its meals and beverages segment, which is doing better than its snack brands that are more discretionary in nature.

On its December earnings call, Campbell's CEO Mick Beekhuizen said that "consumers are still snacking, but how people are snacking is evolving."

Later in the call, Beekhuizen said that, "While snacking occasions are growing, consumer preferences continue to evolve to health and wellness and the desire for worth-it experiences."

Campbell's is far from the only company diversifying into health and wellness. Many of PepsiCo's recent acquisitions are geared toward health-conscious consumers and expanding from snacks to "mini-meals." It stands to reason that consumers looking to stretch their dollars without compromising on health would look for options that are convenient and easy to consume at home or on the go. Campbell's is well-positioned to capitalize on that trend through brands like V8 and low-sodium and heart-healthy options in the Campbell's soup line.

Campbell's results continue to disappoint

In the first-quarter fiscal 2026, Campbell's reported a 3% decrease in net sales and a 13% decrease in adjusted earnings per share (EPS). For the full year, Campbell's expects roughly flat organic sales growth and a 12% to 18% decline in adjusted EPS, which would mean $2.40 to $2.55 in adjusted EPS.

The weak guidance is likely why Campbell's stock sold off heavily in response to the earnings announcement. However, the guidance was identical to what Campbell's released in September.

Although Campbell's results are poor, it's essential to note that the company's struggles reflect industrywide challenges, not execution errors. The consumer staples sector is the worst-performing sector year to date, while many of the stocks driving broader market gains are business-to-business names that benefit from strong enterprise-level spending and are less sensitive to strained consumer budgets.

Despite the weak results, Campbell's dividend is intact. The company's annual dividend is $1.56 per year, which would be a 63% payout ratio based on the midpoint of its fiscal 2026 guidance.

Campbell's doesn't have as good a dividend track record as companies like Coca-Cola and PepsiCo, which have raised their payouts for more than 50 consecutive years, earning them spots on the coveted list of Dividend Kings. But Campbell's does have a solid streak of boosting its payout, having cut its dividend in 2001 but steadily boosting it or keeping it the same since.

Perhaps the best reason to buy Campbell's is that its valuation is beyond cheap. At $28.47 per share at the time of this writing, Campbell's is trading at 11.5 times the midpoint of its full-year adjusted EPS guidance. For context, Campbell's 10-year median price-to-earnings ratio is 21.1.

A high-yield dividend stock at a compelling value

Campbell's is a great buy for value and income investors in December. It is better positioned to capitalize on cooking from home trends than pure-play snack food brands. Management is well aware of the cost reductions and portfolio changes necessary to appeal to value-focused consumers. Campbell's dividend is reliable, and its yield is currently the highest in the company's history.

Since Campbell's is already guiding for poor results in the current fiscal year, investors would probably praise even mediocre results.

Campbell's isn't the kind of company that will appeal to investors looking for red-hot growth stocks to buy in 2026. However, it's a great fit for investors seeking value in today's premium-priced market or to enhance their passive income stream from a reliable name.

Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool recommends Campbell's. The Motley Fool has a disclosure policy.