Income investors are better off with these three plays than the leading organic grocer.
Whole Foods Market (NASDAQ:WFM) is a rare breed in the investing world -- a growth stock that offers a dividend. Though the stock has come under considerable pressure in the last year, the company has committed to returning capital to shareholders. It raised its quarterly dividend 4% to $0.135 last November, its fifth consecutive annual increase, and announced a $1 billion share repurchase program, which would reduce shares outstanding by nearly 10% if enacted at today's stock price.
Whole Foods stock now pays a 1.6% dividend yield, and with a payout ratio of just 34%, the company could afford to boost that payout. However, profit has been falling in recent quarters as organic growth has slowed due to competitive challenges. As the company maps out a turnaround strategy and invests in a new chain of budget-priced stores and lower prices, it's unlikely to raise its dividend substantially. During the recession, the company even suspended its dividend for three years as profits declined substantially, and continued weakness could threaten it again. For investors looking for a solid dividend stock in the food sector, here are three better options.
Let's look closer those 3 food stocks: GIS, CPB and PEP
Source: The Motley Fool