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 screening criteria. 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

• High Dividend Yield: FLO offers a yearly dividend yield of 5.46%, well above the industry average of 4.63% and the S&P500 average of 2.40%. This makes it an appealing choice for investors seeking steady income.
• Consistent Dividend Growth: The company has increased its dividend at an average annual rate of 7.46% over the past years, demonstrating a commitment to rewarding shareholders.
• Long Dividend History: FLO has paid dividends for at least 10 consecutive years without reductions, reinforcing its reliability as a dividend payer.

Profitability Supports Dividend Sustainability

FLO earns a Profitability Rating of 8/10, driven by strong margins and returns:

• Return on Equity (ROE) of 17.60% outperforms 88.76% of industry peers.
• Gross Margin of 49.50% is among the best in its sector.
• Stable cash flows and earnings provide a solid foundation for continued dividend payments.

Financial Health Considerations

While FLO’s Health Rating of 5/10 indicates some areas to monitor, key solvency metrics remain sound:

• Altman-Z Score of 3.38 suggests low bankruptcy risk.
• Debt levels are manageable, with a Debt-to-Equity ratio of 0.73, though liquidity ratios (Current Ratio: 1.20, Quick Ratio: 0.72) could be stronger.

Valuation and Growth Outlook

FLO trades at a reasonable P/E ratio of 13.34, below both the industry and S&P500 averages. While revenue and earnings growth are modest (2-3% expected annually), the company’s stability and dividend track record compensate for slower expansion.

For a deeper look, review the full fundamental analysis of FLO.

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Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.