Flowers Foods: Stable Outlook Despite Stretched Valuation

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The company has seen steady growth in recent years through its acquisition of local bakeries, product innovations, and production efficiency initiatives. Despite this success, Flowers Foods ($NYSE:FLO)’ stock valuation appears somewhat stretched at the moment. That being said, investors can still take heart in the fact that Flowers Foods’ outlook remains relatively solid. The company expects to benefit from its growing presence in the foodservice and retail channels and its continued success in product innovation.

In addition, its strong capital position and recent debt refinancing should give it plenty of fuel to drive growth going forward.

Price History

Flowers Foods Inc (FLO) recently had a less than average market performance, as its stock opened at $22.5 and closed at the same levels, down 0.3% from the previous closing price of $22.6. The company is known for its baked goods, including Nature’s Own, Wonder, Tastykake and Dave’s Killer Bread products. It is one of the largest producers of packaged bakery foods in the United States, and the stock has seen a steady increase in value over the past year.

However, due to its current high price-to-earnings ratio, analysts have warned investors that the company is now overvalued in the market. Despite this, the company has a history of paying out regular dividends, which could potentially entice investors to hold onto their stocks in the long run.

Additionally, Flowers Foods has continually expanded its product offerings through acquisition and innovation, which could potentially boost revenue and earnings in the future. Overall, despite the current stretched valuation of Flowers Foods stock, analysts remain optimistic about the company’s prospects in the future. The combination of steady dividend payouts and potential growth opportunities could make FLO an attractive option for investors in the coming months. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Flowers Foods. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Flowers Foods. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Flowers Foods. More…

Key Ratios Snapshot

Some of the financial key ratios for Flowers Foods are shown below. More…

Analysis

As part of GoodWhale’s analysis of FLOWERS FOODS’ wellbeing, we conducted a Star Chart assessment. The Star Chart assesses companies on five distinct criteria: growth, dividends, assets, profitability and cash flows/debt. Based on this assessment, FLOWERS FOODS has a high health score of 8/10 with regard to its cash flows and debt, giving us confidence that the company is capable to sustain future operations even in times of crisis. Due to its moderate revenue or earnings growth, FLOWERS FOODS is classified as a ‘rhino’. This informs us that the company is not outperforming the market, but is holding its own. As such, investors who are interested in opting for stable returns or are looking for a mid- to long-term investment may find FLOWERS FOODS an appealing option. Additionally, with a strong dividend score, strong profitability and medium asset score, investors who seek dividend income may find FLOWERS FOODS an attractive investment opportunity. However, due to its weak growth score, we conclude that investors who are looking for short-term gains or higher growth potential may wish to seek other options. More…

Peers

Flowers Foods Inc is one of the leading producers of packaged bakery products in the United States. The company’s principal competitors are J&J Snack Foods Corp, MamaMancini’s Holdings Inc, and Bridgford Foods Corp.

– J&J Snack Foods Corp ($NASDAQ:JJSF)

J&J Snack Foods Corp is a publicly traded company with a market capitalization of $2.66 billion as of March 2022. The company manufactures and markets snack foods and beverages. Its products include ice cream, frozen desserts, cookies, crackers, pretzels, and other snacks. J&J Snack Foods Corp has a return on equity of 5.74%.

J&J Snack Foods Corp was founded in 1971 and is headquartered in Pennsauken, New Jersey. The company operates through three segments: Food Service, Retail, and International. The Food Service segment provides products to foodservice customers, including restaurants, schools, and other institutions. The Retail segment sells products to retail grocery and mass merchandiser customers. The International segment consists of sales to customers located outside of the United States.

– MamaMancini’s Holdings Inc ($NASDAQ:MMMB)

MamaMancini’s Holdings Inc is a food company that specializes in the production of Italian-style foods, such as meatballs, sausages, and pasta sauce. The company has a market cap of $39.22 million and a return on equity of -14.63%. MamaMancini’s Holdings Inc is a publicly traded company on the Nasdaq Stock Market under the ticker symbol “MMMB.”

– Bridgford Foods Corp ($NASDAQ:BRID)

Bridgford Foods Corporation is a food company that specializes in the manufacture and sale of frozen and refrigerated food products. The company has a market capitalization of 115.55 million as of 2022 and a return on equity of 46.05%. Bridgford Foods Corporation’s products include breads, rolls, biscuits, snacks, and other frozen and refrigerated foods. The company operates in the United States and Canada.

Summary

Flowers Foods is an established food producer, offering a variety of products across the United States. The company’s prospects for growth are stable as they continue to benefit from strong consumer demand for their products. However, the stock appears overvalued when measures against industry peers. Investors should examine the company’s fundamentals and consider the risks associated with overvalued stocks before investing.