Buyouts Help Flower Foods' Earnings Blossom

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To most folks, bread is just something to put peanut butter and jelly on. But forFlower Foods ( FLO ), bread is big business.

The Thomasville, Ga.-based company has a long track record of growth, thanks to a large number of acquisitions.

Flower Foods is the nation's second-biggest producer and marketer of packaged baked goods. The firm's vast portfolio of bread brands include Nature's Own, Cobblestone Mill, Sunbeam, Roman Meal and Country Kitchen. Flower Foods also makes snack cakes, pastries and tortillas.

Since going public back in 1968, it has made more than 100 buyouts. The company scooped up Tasty Baking in 2011 and Lepage Bakeries in 2012. More recently, it completed its buyout of assets from Sara Lee and Earthgrains in February. And the company is in the process of buying a number of bread brands from bankrupt Hostess.

Since 2003, Flower Foods has delivered higher earnings in all years except for 2011. It has a three-year earnings stability factor of 5, signaling a highly steady stream of profits. Earnings have nearly doubled since 2006.

Flower Foods pays a dividend of 16 cents a share quarterly or 64 cents on an annual basis. It last raised the payout in June. Flower Foods has a yield of about 2%, which is the lowest among the five dividend-paying stocks in the Food-Grain & Related group. But Flower Foods has the highest Composite Rating among the five.

While the S&P 500 is up nearly 12% for the year, Flower Foods has more than tripled that. It has been on a tear since breaking out from a cup-with-handle base in early January.

The stock is close to forming a second-stage flat base. If completed, the buy point is 33.26, 10 cents above the April 2 peak.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: FLO

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