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Comparing Whole Foods Market’s Shareholder Returns to Its Peers’

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May. 16 2016, Updated 2:05 p.m. ET

Stock market performance

After poor showings in 2014 and 2015, Whole Foods Market’s stock market performance has delivered more of the same in 2016. The company’s stock has fallen by more than 14% year-to-date (or YTD), after a 33% fall in 2015 and a 12% fall in 2014.

Better-than-expected earnings results seem to have had no impact on the company’s share price. WFM’s stock closed 0.8% lower compared to the previous day’s close after its earnings release on May 4, 2016.

In comparison, Sprouts Farmers Market (SFM) has risen 2.2% YTD, whereas Kroger (KR) and SuperValu (SVU) have fallen 15% and 31.8% YTD, respectively. The SPDR S&P Retail ETF (XRT), which invests 1% of its portfolio in WFM, has risen 2% YTD.[1. All information is as of May 4, 2016]

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Share buybacks

Whole Foods Market initiated a $1 billion share buyback program in November 2015. Under this plan, the company repurchased 21.2 million shares worth $634 million in fiscal 1Q16 and another 3.5 million shares worth $100 million in fiscal 2Q16.

Dividends

Whole Foods is a consistent dividend payer. The company returned $44 million in quarterly dividends to shareholders in fiscal 2Q16. It paid a 14-cent dividend per share to its shareholders in fiscal 2Q16, which put its dividend payout ratio at 31% as of the end of fiscal 2Q16.

WFM’s dividend per share has risen by 40% over the last five years compared to Kroger’s (KR) 15% rise over the same period. Sprouts Farmers Market (SFM) and The Fresh Market (TFM) do not offer dividends.

Total shareholder returns

Whole Foods Market’s poor stock market performance has resulted in negative total returns on the company’s common stock. Total shareholder returns on WFM’s stock over the last year stand at -39% compared to Kroger’s, Sprouts Farmers Market’s (SFM), and SuperValu’s 3.8%, -11.4%, and -46%, respectively.

Investors seeking to add exposure to Whole Foods can consider the VanEck Vectors Retail ETF (RTH), which invests 1.5% of its portfolio in the company.

Move on to the final part of this series to have a look WFM’s current valuations and to compare them with those of its peers.

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