Flowers Foods to Split and Raise Dividend

I often point out to investors that there are a lot of dull and little-known companies that have been great investments. One of the best has been Flowers Food ($FLO). Here’s a company description from Hoovers:

Flowers Foods is a rising star in baked goods. The company is one of the largest wholesale bakeries in the US. Flowers Foods bakes, 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 Cobblestone Mill, Nature’s Own, and Tastykake. 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. Flowers Foods has agreed to buy several bread brands, including Wonder, and about 20 bakeries from Hostess Brands.

Exciting, huh? Yeah, I know it sounds pretty boring but FLO makes stuff people need, and after all, that’s all that business is.

The stock is currently at $34 per share; 18 years ago, you could have picked them up for $1 apiece. Since 1995, FLO has split 3-for-2 seven times (and that doesn’t include another in 1987), plus they just announced another 3-for-2 split today. Flowers is also raising its dividend by 5.5% to 11.25 cents per share per quarter.

Despite a stellar track record and a market cap near $5 billion, Flowers is followed by just nine Wall Street analysts. Netflix ($NFLX) is followed by 24 even though FLO makes about seven times the profit.

Posted by on May 22nd, 2013 at 8:58 pm


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