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Flowers Foods (FLO): Buy this Cheap, High-Yield Consumer Staple Stock

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The coronavirus has put a halt to a ton of economic activity in the U.S. and around the world. That said, stocks have made a comeback over the last two weeks on growing optimism that social distancing measures to slow the spread of the novel coronavirus are working.

Still, millions of people have filed for unemployment in the last two weeks, as many businesses that are deemed non-essential temporarily close or cut staff. Amid all of this economic turmoil and uncertainty, consumer staples look poised to perform well. And what’s more of a staple than bread?

Flowers Foods, Inc.’s (FLO - Free Report) portfolio of breads includes Nature's Own, Wonder and others, alongside rolls, tortillas and more. The company is also part of an industry that rests in the top 35% of our more than 250 Zacks industries at the moment.

FLO shares have popped roughly 2% in 2020 during the nearly market-wide selloff and are up 14% in the last three years. Plus, Flowers Foods is trading at roughly $22 a share, which many investors might consider cheap.

On top of that, Flowers Foods has consistently raised its dividend. This includes upping its current quarterly payout by over 5% to $0.19 a share. FLO’s dividend yield rests at 3.45% to crush the S&P 500’s 2.12% average and its industry’s 0.38%—and this looks even stronger since it’s not artificially inflated by a falling stock price.

Outlook

FLO’s fiscal 2019 revenue popped 4.4% to $4.12 billion and it topped our Q4 earnings and sales estimates. Looking ahead, our Zacks estimates call for Flowers Foods’ fiscal 2020 sales to jump another 4.4% to hit $4.30 billion. Meanwhile, the fresh packaged bakery food giant’s adjusted FY20 earnings are projected to surge 10.4% to $1.06 per share.

FLO’s positive longer-term earnings revision activity helps it earn a Zacks Rank #1 (Strong Buy) right now. Flowers Foods also sports an “A” grade for Growth and a “B” for Momentum in our Style Scores system.

Investors might also want to consider other highly-ranked stocks from FLO’s industry, such as Campbell Soup Company (CPB - Free Report) , General Mills, Inc. (GIS - Free Report) , Blue Apron (APRN - Free Report) , United Natural Foods, Inc. (UNFI - Free Report) , and more.

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