Yahoo Finance Whole Foods Market Continues Its Slide in the Stock Market
A Whole Foods Appetizer: Earnings Preview for Fiscal 2Q16
WFM’s stock market performance
Whole Foods Market (WFM) has delivered below-average stock market performance this year. The company’s stock price has come down by 10.6% year-to-date as of April 26, 2016, after losing 33% of its value in 2015.
In comparison, the other two pure-play organic companies—The Fresh Market (TFM) and Sprouts Farmers Market (SFM)—have gained 22% and 5.3%, respectively. Although The Fresh Market has been riding high on the acquisition bid from Apollo, Sprouts Farmers Market’s stock market performance is more a result of its strong financial performance.
Kroger (KR) is the worst-performing major supermarket and has lost around 10.7% year-to-date (or YTD). It is interested to note that KR was the best performer among the supermarket peer group in 2015 (+32%) and the only supermarket with positive stock returns during the year.
Dividend payments
Whole Foods Market (WFM) pays healthy dividends to its shareholders. The company increased its quarterly dividend payment by 3.8% to $0.14 per share in fiscal 1Q16.
The company has grown its dividends by around 40% over the last five years. WFM’s one-year forward dividend yield stands at 1.9% as compared to Kroger’s 1.2% and Walmart’s (WMT) 2.9%. Sprouts Farmers Market (SFM) and The Fresh Market (TFM) do not offer dividends.
Share buybacks
Whole Foods Market initiated a $1 billion share buyback program in November 2015. Under this plan, the company repurchased 21.2 million shares worth $634 million during fiscal 1Q16.
Total shareholder returns
Whole Foods Market’s (WFM) continuous poor performance in the stock market in 2014 (-12% YTD), 2015 (-33% YTD), and the current year (-10.6% YTD) has resulted in lower total returns on the company’s common stock as compared to its peers. The company’s one-year and three-year shareholder returns stand at -39% and -11.4%, respectively.
In comparison, Kroger has delivered 3.7% to its shareholders through dividends and stock price appreciation over the last year and 30.7% over the last three years.
Investors seeking to add exposure to Whole Foods can consider the Market Vectors Retail ETF (RTH), which invests 1.5% of its portfolio in the company.
The final part of this series will examine WFM’s current valuations.
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