Cracker Barrel Offers Home Cooking; Earnings Stability

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Cracker Barrel Old Country Stores ( CBRL ) certainly has brand recognition, but it remains an under-the-radar stock in IBD's restaurant group.

That's despite a consistent track record of earnings growth, high return on equity and steady dividend payouts.

It currently pays a quarterly dividend of 50 cents a share, giving it an annualized yield of 2.4%.

The company, with a market capitalization of $1.95 billion, operates 622 company-owned locations in 42 states. Its restaurants offer moderately priced, home-style country meals. Each location also has a gift shop, offering merchandise like CDs, apparel and seasonal gifts.

The company generates the majority of sales from its restaurant business.

When the company reported fiscal second-quarter earnings in late February, profit rose 19% from a year ago to $1.43 a share. Sales rose 4% to $702.7 million.

Restaurant sales rose 5% to $528.2 million. Retail sales rose 3% to $174.5 million. Same-stored sales at each segment rose 3%.

The company plans to launch eight new Cracker Barrel stores in fiscal 2013 ending in July.

Cracker Barrel is thinly traded with an average daily volume close to 200,000 shares. But with a share price over 80, it's not suffering from lack of institutional support. At the end of the first quarter, 309 mutual funds owned about 35% of the shares outstanding. Several are A-rated funds in IBD's database.

Volume has dried up in the stock in recent weeks but it continues to hold gains above its 10-week moving average, a key support level for now. A break below the 10-week line from here means the stock is probably ready to consolidate gains for a while. If it continues to move sideways , below its recent high of 83.58, a flat base could form.



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: CBRL

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