- Down 12.05% YTD, shares in CBRL are now yielding 4.13%.
- Earnings have been growing at double digits on average over the past 5 years and analysts expect this to continue next fiscal year.
- The company has managed to drastically reduce its long term debt.
- Still, CBRL is trading at a discount to its peers DIN and JACK.
Shares in Cracker Barrel Old Country Store (NASDAQ:CBRL) have dropped by 12.05% year to date and are now trading at $96.81. The company recently increased its dividend by 33%, to $1 per quarter, putting the dividend yield at a very respectable 4.13%.
CBRL has seen double digit EPS growth over the past years, and expectations are this will continue. In its most recent quarterly report, the company stated:
"Based upon year-to-date financial performance, the Company expects to report earnings per diluted share for the 2014 fiscal year of between $5.50 and $5.60, which implies adjusted EPS for the fourth quarter of between $1.50 and $1.60."
Analysts appear to agree as the average estimate stands at $5.58, putting the company at a forward price to earnings ratio of 17.3, well below competitors like DineEquity (NYSE:DIN), which is trading at 17.9 times forward earnings and Jack in the Box (NASDAQ:JACK), which has a forward p/e ratio of 24.3. The industry average p/e ratio stands at 27.5. Last year's earnings per share were $4.90, which means the average analyst expects CBRL to grow its EPS by 13.88%. For next year, the average estimate stands at $6.16, which would be a further 10.39% increase.
Revenue has been steadily growing in recent years, as can be seen by the 5 year growth rate of 2.09%. The company expects revenue to reach $2.7 billion in the current fiscal year, thanks in part to the opening of 7 new stores. Average analyst expectations are slightly less optimistic, with a revenue expectation of $2.68 billion. This would be an increase of 1.3% to last year's $2.65 billion. Revenue growth is expected to go up next fiscal year, with the average analyst estimating $2.79 billion. Cracker Barrel is trading at a price to sales ratio of only 0.9, well below the industry average of 2.2. It's also a lot lower than DineEquity's p/s ratio of 2.5 and JACK's 1.5.
Looking at the balance sheet we can see CBRL has a current ratio of 0.88, which is slightly below the 1.0 I would like to see as a minimum, but not low enough to really worry me too much. The long term debt currently stands at $381 million and has been declining in recent years.
CBRL Current Ratio (Quarterly) data by YCharts
The 12% drop year to date has made Cracker Barrel Old Country Store a bargain compared to its competitors, both on a p/e and p/s ratio basis. Earnings per share have been growing by double digits on average over the past 5 years, and EPS of $6.16 for next year mean the $1 quarterly dividend leads to a payout ratio of only 64.9%, leaving plenty of room for even further growth. The high dividend yield of 4.13% make this a great stock for investors looking for some extra income from their stocks.
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