Flowers Foods (
) 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
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