12/3 Dividend Yield: 2.8%
Started in 1919 by brothers William Howard and Joseph Hampton Flowers, Flowers Foods (NYSE:FLO) opened up by providing 30,000 loaves of white bread a day. By 1940, it was only one of six bakeries to franchise the Sunbeam and Little Miss Sunbeam brands of bread. Flowers went public in 1968, and when it introduced the Nature’s Own bread products in 1977, the company took off.
After a series of brand purchases including Keeblers and Mrs. Smith’s, Flowers is today primarily focused on bread, including its Nature’s Own and Cobblestone Mill brands. Flowers recently purchased Tastykake, and the company is rumored to be a suitor for the Hostess Brand.
With a $3 billion market cap, Flowers’ 16-cents-per-share quarterly dividend provides a tasty 2.76% dividend yield at a price of just under $25 per share. A 26x P/E ratio appears in line with a company that saw its shares increase over 50% in the last five years and nearly 30% year-to-date.
One long-time dividend concern might be its rather high 64% dividend payout ratio. However, Flowers has consistently raised the dividend since it started paying one in 2002
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing he does not hold a position in any of the aforementioned securities.