Flowers Foods +20,000%

I like to talk about little-known stocks that have done incredibly well for investors. Last June, I highlighted Flowers Foods ($FLO).

Now let’s look at some results. Thirty years ago, you could have picked up one share of FLO for about 17 cents (that’s adjusted for ten, yes ten, 3-for-2 splits). Today the stock is going for about $25 so that’s a gain of over 14,000% or more than 18% a year. That doesn’t include a dividend which usually yields between 2% and 4%.

Speaking of which, the company just raised its quarterly dividend by 14%, raising it from 17.5 cents a share to 20 cents a share. Going by the new dividend, the stock now yields about 3.2%.

In February, Flowers said that it expects 2010 EPS to increase by 10% to 15% over 2009’s total which came in at $1.38. That translates to a target of $1.52 to $1.59. They reaffirmed this guidance last month as well.

I don’t think Flowers is a take-it-to-the-bank buy right here, but I’d love to see it drop to around $20 a share. This is definitely one to watch.

What do I know? The stock never pulled back to $20, though in August it dipped below $23. From there, the stock surged. It split 3-for-2 last month and is currently at $23 again — meaning that’s a 50% gain in a little over a year. The stock also raised its dividend by another 13%. That brings the 14,000% that I mentioned last year to over 20,000% today.

Here’s a description of the company from Hoovers:

Look for Flowers Foods in your breadbox, not your garden. The company is one of the largest wholesale bakeries in the US. Flowers Foods produces, markets, and distributes fresh breads, buns, rolls, corn and flour tortillas, and sweet bakery goodies to retail food and foodservice customers in the western, southern, and northeastern US. The company’s brand names include BlueBird, Cobblestone Mill, and Nature’s Own. Flowers Foods makes snack cakes, pastries, donuts, and frozen bread products for retail, vending, and co-pack customers nationwide. It also rolls out hamburger buns for national fast-food chains. Building on its brand portfolio, Flowers Foods acquired Tastykake pastry maker Tasty Baking in mid-2011.

Posted by on July 21st, 2011 at 2:02 pm


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