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Evaluating Flowers Foods’ Dividend Yield and Valuation

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Dividend yield

Flowers Foods’ (FLO) quarterly dividend payout stands at $0.18 per share. The company last hiked its dividend by 5.9% in June.

Flowers Foods’ current dividend yield of 3.6% is based on its closing price of $20.39 on July 30. In comparison, the Campbell Soup Company’s (CPB) current dividend yield stands at 3.4%, while J&J Snack Foods’ (JJSF) current dividend yield stands at 1.2%. Lancaster Colony’s (LANC) dividend yield stands at 1.7% as of July 30.

Flowers Foods also has a share repurchase plan in place. On April 21, the company had $6.5 million shares under its existing authorization. Share buybacks provide upside to a company’s bottom line.

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Forward PE

On July 30, Flowers Foods was trading at a 12-month forward PE multiple of 18.2x. Since its first-quarter results, the company’s valuation multiple has fallen 4.9%.

The Campbell Soup Company is trading at 12-month forward PE ratio of ~15.0x. Lancaster Colony is trading at 12-month forward PE ratio of 28.2x, and J&J Snack Foods is trading at a 12-month forward PE ratio of ~29.2x as of July 30.

Comparing forward PE valuation multiples for companies in the same sector helps analysts make investment decisions.

Growth estimates

Analysts expect FLO’s 2018 sales to be ~$4.0 billion, up 1.0% on a YoY (year-over-year) basis. According to the company’s management, its sales are expected to rise to the range of ~$3.92 billion–$3.98 billion, which reflects growth of 0.0%–1.6% on a YoY basis.

In comparison, analysts expect J&J Snack Foods’ 2018 revenue to rise 6.1% to $1.15 billion and its 2019 revenue to rise 3.5% to $1.19 billion.

Analysts expect Lancaster Colony’s 2018 revenue to rise 0.6% to $1.21 billion and its 2019 revenue to rise 2.6% to $1.24 billion.

Analysts expect Campbell Soup’s 2018 revenue to rise 10.5% to $8.72 billion and its 2019 revenue to rise 18% to $10.29 billion.

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