(FLO) Flowers Foods, Inc. – Growth And Income – Zacks Rank Buy

March 2nd, 2009

Flowers Foods, Inc. (FLO) recently renewed its annual dividend of 60 cents per share in a time when many are cutting or halting dividends. Last week, the company declared a quarterly dividend of 15 cents to be paid on March 20 to shareholders of record on March 6. FLO boasts an industry-leading yield of 2.6%.

“We achieved good results in fiscal 2008 and this action reflects the board’s confidence in the company’s ability to deliver similar results moving forward,” said George E. Deese, the company’s chairman of the board, CEO, and president. He added that FLO’s balance sheet is strong and the company is generating good cash flow.

Estimates are on the Rise

Analysts are upbeat on earnings forecasts. Full-year 2009 estimates of $1.41 per share are above last month’s $1.39. The most accurate projection is a higher $1.43.

Solid Fundamentals

Analysts’ expectations are in line with the company’s earnings per share guidance of $1.37 to $1.48, which represents an increase of 7% to 15.6% over 2008.

FLO’s fourth-quarter sales came in 31.2% ahead of year-prior total, while full-year sales jumped 18.6% year-over-year.

The company’s earnings for the fourth quarter totaled 34 cents per share, beating the consensus estimate by 10% and the previous year’s 23 cents. For the year, FLO earned $1.28 per share, versus the year-prior $1.02.

Flowers Foods’ return on equity (ROE) of 18% compares favorable to the industry average of 11%.

The company is expected to see earnings growth of about 10% over the next 3 – 5 years, which is in line with the industry average.

Read our Dec 12 commentary on FLO.

Zacks Investment Research
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Read more on Flowers Foods at Wikinvest

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