Flowers Foods Inc.
) recently increased its quarterly dividend by 6.7% to 16 cents
from 15 cents per share paid previously. The increased dividend
equates to an annual payout of 64 cents per share. The increased
dividend will be paid on June 29 2012, to stockholders of record as
of June 15, 2012.
Flowers Foods has a consistent track record of paying dividends
and the latest hike brings the forward annual dividend yield, as of
June 4, 2012, to 2.78%. Earlier, Flowers Foods had increased its
quarterly dividend by 12.5% to 15 cents per share in May last year
to boost shareholder value.
In a concerted effort to enhance shareholders' value, the
producer and maker of bakery products in the United States also has
a share buy back program in place. In the first quarter of 2012,
the company repurchased approximately 70,742 shares for $1.4
million. Since the inception of the share repurchase plan, the
company has purchased 37.9 million shares for an average of $11.41
per share, totaling $432.2 million.
Flowers Foods possesses a strong balance sheet and is well
placed financially. At the end of the first quarter of 2012, the
company's cash and cash equivalent increased sequentially to $186.1
million from $7.8 million. We believe that the company has enough
cash to provide optimum shareholder value.
We appreciate Flowers Food's efforts to consistently enhance
long-term shareholder value even amid an economic downturn. We
believe that an increase in dividend payment affirms the company's
optimistic outlook and depicts that it is heading toward strong
In addition, the company also recently inked a deal to buy
Lepage Bakeries, a private company based in Auburn, Maine for $370
million in cash and stock. Management expects the acquisition to
expand its footprint in New England and New York.
Flowers Food, which competes with
Campbell Soup Co.
), carries a Zacks #3 Rank, implying a short-term Hold rating.
Besides, we are also maintaining our long-term Neutral
recommendation on the stock.
CAMPBELL SOUP (CPB): Free Stock Analysis Report
FLOWERS FOODS (FLO): Free Stock Analysis Report
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