FLOWERS FOODS INC (NYSE:FLO) - A Reliable Dividend Stock Worth Considering

FLOWERS FOODS INC (NYSE:FLO) stands out as a strong candidate for dividend investors, according to our Best Dividend Stocks screener. The company combines an attractive dividend yield with solid profitability and reasonable financial health, making it a noteworthy option for income-focused portfolios.

Key Strengths for Dividend Investors

1. High Dividend Yield & Consistent Growth

• FLO offers a 5.57% dividend yield, well above the industry average of 4.46% and the S&P 500’s 2.44%.
• The company has increased its dividend for 10+ consecutive years, with an annual growth rate of 7.46%, demonstrating reliability.

2. Strong Profitability

• FLO earns a Profitability Rating of 8/10, supported by:
  • A Return on Equity (ROE) of 17.60%, outperforming 88.89% of industry peers.
  • A Gross Margin of 49.50%, ranking at the top of its sector.
  • Stable Operating and Profit Margins, indicating efficient operations.

3. Reasonable Valuation

• The stock trades at a P/E ratio of 13.74, below the industry average (18.12) and the S&P 500 (24.12).
• Its Price/Forward Earnings ratio of 14.93 also suggests an undervalued position relative to broader market benchmarks.

4. Financial Health Considerations

• FLO’s Health Rating of 5/10 reflects some liquidity concerns (Quick Ratio of 0.72), but solvency remains stable with a manageable Debt/Equity ratio of 0.73.
• The company’s Altman-Z score of 3.43 indicates low bankruptcy risk, better than 76.67% of peers.

Potential Risks

• High Payout Ratio (81.83%) – While FLO has maintained dividends, this ratio suggests limited room for further increases unless earnings grow.
• Slowing Growth – Revenue and EPS growth are modest (2.80% and 2.58% projected, respectively), which could constrain future dividend hikes.

For investors seeking steady income, FLO’s track record and above-average yield make it a compelling choice. However, monitoring payout sustainability and earnings growth will be key.

Our Best Dividend Stocks screener lists more high-quality dividend stocks updated daily.
For a deeper dive, review the full fundamental analysis of FLO.

Disclaimer

This is not investment advice. The observations are based on current data, but investors should conduct their own research before making decisions.