Flowers Foods Offers Capital Gains, Dividend Hike


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Flowers Foods ( FLO ) has offered investors a nice capital gain and a dividend hike this year amid accelerating revenue and profit growth.

Flowers, a top producer of packaged bakery goods under the Nature's Own, Cobblestone Mill and numerous other brands, traded mostly sideways for years until late 2012 as the company's fortunes began to improve. The stock is up 43% since the start of 2013, far outpacing the S&P 500.

Additionally, the company announced a 3-for-2 stock split on May 22 and boosted its quarterly dividend by 5.5% to 11.25 cents per share. That's 45 cents a share per year, good for an annual yield of 2%.

Thomasville, Ga.-based Flowers is the top stock in the eight-member Food-Grain & Related industry group, which on Monday was ranked 77th out of the 197 groups IBD tracks. That's up from No. 138 just three weeks ago.

Flowers' profit was mostly flat to declining from late 2010 to mid-2012. But it rose 13% in Q3 2012, then jumped 73% and 63% in the next two quarters. Profit for Q2, which ended in June, is expected to climb 53%.

Revenue growth has also picked up, going from a 6% increase in Q3 last year to subsequent gains of 15% and 26%.

Flowers has benefitted from the bankruptcy of Hostess, which removed a number of rival products from store shelves. Some of those products, including Wonder Bread, may be back if regulators approve Flowers' bid to buy Hostess. Flowers has also been expanding into the Midwest, Northeast and West.

Flowers has retaken its 10-week line as it works on a flat base.

Flowers and other food producers got a boost Monday when corn prices plunged to a 32-month low after planting estimates rose more than expected, as IBD reported .

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

This article appears in: Investing Investing Ideas
Referenced Stocks: FLO

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