NYSE:FLO

Stock Analysis Report

Executive Summary

Flowers Foods, Inc. produces and markets bakery products in the United States.

Rewards

Trading at 25.8% below its fair value

Earnings are forecast to grow 3.21% per year

Pays a high and reliable dividend of 3.46%

Risk Analysis

Has a high level of debt



Snowflake Analysis

Established dividend payer with adequate balance sheet.


Similar Companies

Share Price & News

How has Flowers Foods's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FLO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.6%

FLO

1.7%

US Food

2.0%

US Market


1 Year Return

12.7%

FLO

12.9%

US Food

23.6%

US Market

Return vs Industry: FLO matched the US Food industry which returned 13.9% over the past year.

Return vs Market: FLO underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

FLOIndustryMarket
7 Day1.6%1.7%2.0%
30 Day2.4%0.7%3.9%
90 Day1.4%6.3%12.0%
1 Year16.7%12.7%16.1%12.9%26.2%23.6%
3 Year24.1%11.7%1.7%-6.4%53.2%43.3%
5 Year30.9%10.5%41.8%24.5%75.7%56.3%

Price Volatility Vs. Market

How volatile is Flowers Foods's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Flowers Foods undervalued compared to its fair value and its price relative to the market?

25.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FLO ($21.94) is trading below our estimate of fair value ($29.57)

Significantly Below Fair Value: FLO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: FLO is poor value based on its PE Ratio (25.4x) compared to the Food industry average (25.4x).

PE vs Market: FLO is poor value based on its PE Ratio (25.3x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: FLO is poor value based on its PEG Ratio (7.9x)


Price to Book Ratio

PB vs Industry: FLO is overvalued based on its PB Ratio (3.6x) compared to the US Food industry average (2.1x).


Next Steps

Future Growth

How is Flowers Foods forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

3.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FLO's forecast earnings growth (3.2% per year) is above the savings rate (1.7%).

Earnings vs Market: FLO's earnings (3.2% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: FLO's earnings are forecast to grow, but not significantly.

Revenue vs Market: FLO's revenue (1.6% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: FLO's revenue (1.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FLO's Return on Equity is forecast to be low in 3 years time (15.8%).


Next Steps

Past Performance

How has Flowers Foods performed over the past 5 years?

-2.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FLO has high quality earnings.

Growing Profit Margin: FLO's current net profit margins (4.5%) are lower than last year (5.4%).


Past Earnings Growth Analysis

Earnings Trend: FLO's earnings have declined by -2.4% per year over the past 5 years.

Accelerating Growth: FLO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: FLO had negative earnings growth (-14.4%) over the past year, making it difficult to compare to the Food industry average (-12.1%).


Return on Equity

High ROE: FLO's Return on Equity (14.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Flowers Foods's financial position?


Financial Position Analysis

Short Term Liabilities: FLO's short term assets ($565.8M) exceed its short term liabilities ($521.9M).

Long Term Liabilities: FLO's short term assets ($565.8M) do not cover its long term liabilities ($1.4B).


Debt to Equity History and Analysis

Debt Level: FLO's debt to equity ratio (68.9%) is considered high.

Reducing Debt: FLO's debt to equity ratio has reduced from 71.4% to 68.9% over the past 5 years.

Debt Coverage: FLO's debt is well covered by operating cash flow (38.3%).

Interest Coverage: FLO's interest payments on its debt are well covered by EBIT (25.4x coverage).


Balance Sheet

Inventory Level: FLO has a high level of physical assets or inventory.

Debt Coverage by Assets: FLO's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

What is Flowers Foods's current dividend yield, its reliability and sustainability?

3.44%

Current Dividend Yield


Dividend Yield vs Market

company3.4%marketbottom25%1.4%markettop25%3.7%industryaverage2.7%forecastin3Years3.5%

Current dividend yield vs market & industry

Notable Dividend: FLO's dividend (3.46%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: FLO's dividend (3.46%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: FLO's dividends per share have been stable in the past 10 years.

Growing Dividend: FLO's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (85.4%), FLO's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FLO's dividends in 3 years are forecast to be covered by earnings (71.5% payout ratio).


Next Steps

Management

What is the CEO of Flowers Foods's salary, the management and board of directors tenure and is there insider trading?

2.7yrs

Average management tenure


CEO

A. McMullian (49yo)

0.7yrs

Tenure

0

Mr. A. Ryals McMullian, Jr., is President and Chief Executive Officer of Flowers Foods, Inc. since May 23, 2019 and has been its Director since August 16, 2019. He served as Chief Operating Officer at Flow ...


Management Age and Tenure

2.7yrs

Average Tenure

56yo

Average Age

Experienced Management: FLO's management team is considered experienced (2.7 years average tenure).


Board Age and Tenure

5.7yrs

Average Tenure

65yo

Average Age

Experienced Board: FLO's board of directors are considered experienced (5.7 years average tenure).


Insider Trading

Insider Buying: FLO insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$35,22818 Nov 19
Debo Mukherjee
EntityIndividual
Role
Head of Marketing
Chief Marketing Officer
Shares1,650
Max PriceUS$21.35
BuyUS$31,31018 Mar 19
Debo Mukherjee
EntityIndividual
Role
Head of Marketing
Chief Marketing Officer
Shares1,550
Max PriceUS$20.20

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • R. Kinsey (58yo)

    CFO & Chief Administrative Officer

    • Tenure: 12.3yrs
    • Compensation: US$754.44k
  • Mary Krier

    Senior Vice President of Communications & Corporate Responsibility

    • Tenure: 3.5yrs
  • Karyl Lauder (63yo)

    Senior VP & Chief Accounting Officer

    • Tenure: 13yrs
  • Bradley Alexander (60yo)

    Chief Operating Officer

    • Tenure: 0.7yrs
    • Compensation: US$717.45k
  • A. McMullian (49yo)

    President

    • Tenure: 0.7yrs
  • Stephanie Tillman (47yo)

    Chief Legal Counsel

    • Debo Mukherjee (51yo)

      Chief Marketing Officer

      • Tenure: 2.3yrs
    • David Wheeler (56yo)

      Chief Sales Officer

      • Tenure: 2.7yrs
      • Compensation: US$573.76k
    • J. Rieck

      Treasurer and VP of Investor Relations & Financial Analysis

      • Tenure: 3.5yrs
    • Harish Ramani

      Senior VP & Chief Information Officer

      • Tenure: 2.3yrs

    Board Members

    • George Deese (73yo)

      Non-Executive Chairman of The Board

      • Tenure: 5.1yrs
      • Compensation: US$647.48k
    • Jim Spear (64yo)

      Independent Director

      • Tenure: 5yrs
      • Compensation: US$252.50k
    • Dave Singer (63yo)

      Independent Director

      • Tenure: 10yrs
      • Compensation: US$245.00k
    • C. Wood (75yo)

      Independent Director

      • Tenure: 18.8yrs
      • Compensation: US$332.10k
    • Mel Stith (72yo)

      Independent Director

      • Tenure: 15.5yrs
      • Compensation: US$230.00k
    • Ben Griswold (78yo)

      Presiding Director

      • Tenure: 7yrs
      • Compensation: US$260.00k
    • Margaret Lewis (65yo)

      Independent Director

      • Tenure: 5.7yrs
      • Compensation: US$244.12k
    • A. McMullian (49yo)

      President

      • Tenure: 0.7yrs
    • Rhonda Gass (55yo)

      Independent Director

      • Tenure: 4yrs
      • Compensation: US$244.67k

    Company Information

    Flowers Foods, Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Flowers Foods, Inc.
    • Ticker: FLO
    • Exchange: NYSE
    • Founded: 1919
    • Industry: Packaged Foods and Meats
    • Sector: Food, Beverage & Tobacco
    • Market Cap: US$4.677b
    • Shares outstanding: 211.51m
    • Website: https://www.flowersfoods.com

    Number of Employees


    Location

    • Flowers Foods, Inc.
    • 1919 Flowers Circle
    • Thomasville
    • Georgia
    • 31757
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    FLONYSE (New York Stock Exchange)YesCommon StockUSUSDMar 2001
    FWFDB (Deutsche Boerse AG)YesCommon StockDEEURMar 2001

    Biography

    Flowers Foods, Inc. produces and markets bakery products in the United States. The company operates through two segments, Direct-Store-Delivery and Warehouse Delivery. The Direct-Store-Delivery segment produces and markets fresh breads, buns, rolls, tortillas, and snack cakes. This segment offers its products primarily under the Nature’s Own, Dave’s Killer Bread, Tastykake, Wonder, and Cobblestone Bread Company brand names. It operates 39 bakeries, as well as sells its products primarily through a network of independent distributors to retail and foodservice customers. The Warehouse Delivery segment produces snack cakes, frozen breads, and rolls for national retail, foodservice, vending, and co-pack customers through a network of warehouse channels. This segment markets its products under the Mrs. Freshley’s, Alpine Valley Bread, and European Bakers brands. It also sells products under franchised and licensed trademarks and trade names, such as Sunbeam, Bunny, and Sara Lee. The company was formerly known as Flowers Industries and changed its name to Flowers Foods, Inc. in 2001. Flowers Foods, Inc. was founded in 1919 and is headquartered in Thomasville, Georgia. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/18 23:36
    End of Day Share Price2020/01/17 00:00
    Earnings2019/10/05
    Annual Earnings2018/12/29


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.