Whole Foods, Inc.
by Michael VodickaDecember 23, 2011 | Comments : 0 Recommended this article: (0)
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Whole Foods, Inc owns and operates natural and organic food supermarkets in the United States, Canada and the United Kingdom. The company was founded in 1978 and has a market cap of $12.3 billion.
Whole Foods has been charging higher for the last few years, but shares got an extra boost in early November after the company reported strong Q3 results that came in ahead of expectations.
Revenue for the period was up 12% from last year to $2.4 billion. Earnings also came in strong at 42 cents, 2.5% ahead of the Zacks Consensus Estimate of 41 cents. Whole Foods now has an average earnings surprise of 8% over the last four quarters.
The good quarter was led by an impressive showing in same-store sales, up 8.7% from last year.
Dividend Increased 40%
The company used the good quarter to increase its dividend, jumping 40% to 14 cents per share.
Whole Foods is also returning value to its shareholders, with the Board approving a $200 million share buyback program over the next two years.
Whole Foods has used its earnings momentum to strengthen its financial profile, with cash and short-term investments up $197 million from last year to $746 million against total debt of just $18 million.
Estimates have been holding mostly steady, with the current year projecting earnings of $2.26 and the next-year estimate pegged at $2.59, a bullish 15% growth projection.
In light of recent gains, WFM's PEG ratio of 2 is a premium to the benchmark of 1 for value.
On the chart, the 2-year trend is very bullish, with shares recently hitting a new all-time high. Look for support from the trend line on any weakness. Take a look below.
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Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Whisper Trader Service.
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