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Sunday, 03/25/2001
| WEN - Wendy's International |
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Company Description
Wendy's International, Inc. (NYSE:WEN) is one of the world's
largest restaurant operating and franchising companies with $7.1
billion in system wide sales during 1999 and two quality brands -
Wendy's and Tim Hortons. Wendy's Old Fashioned Hamburgers was
founded in 1969 by Dave Thomas and is the third-largest quick
service hamburger restaurant chain with more that 5,500 units in
the United States, Canada and other international markets. Tim
Hortons was founded in 1964 by Tim Horton and Ron Joyce and is
the largest coffee and baked goods restaurant chain in Canada.
There are month than 1,800 Tim Hortons restaurants in North
America.
Wendy's offers an extensive line of always fresh, made to order
hamburgers, chicken sandwiches, fries, salads, Fresh Stuffed Pitas,
chili and baked potatoes. The Wendy's menu is designed to offer a
variety of nutritious foods at several price points in order to
appeal to a wide base of consumers.
(source: Wendy's)
Reasons To Invest
Wendy's is a corporation with a history of stable financial
performance, which is of concern to long-term investors. The
company is expected to grow its bottom line by roughly 15
percent annually, over the next several years, which is more
than the S&P 500's expected growth rate in addition to
Wendy's peers' collective expected earnings growth rate. In
addition, its shares trade at a discounted valuation as
measured by their price-to-earnings ratio of 14. When
compared to the broader market, shares of Wendy's offer a
better value while the company is expected to grow more than
the broader market average. That formula gives shares of
Wendy's a favorable price-to-earnings growth (PEG) ratio of
0.94. A PEG below 1.00 if often considered a value in the
collective minds of institutional investors and money
managers, who may begin to key in on shares of Wendy's. What's
more, the company operates with a clean balance sheet, which
is relatively debt free.
Just recently, Wendy's announced that its earnings were
adversely impacted during its fourth quarter due to higher
energy and beef costs. This announcement caused a pullback in
shares of Wendy's. Moreover, the recent scare concerning
disease across the Atlantic may have exacerbated the decline
in shares of Wendy's. However, company officials reiterated
their view that earnings would rebound in the second half of
calendar 2001 as energy costs ease and the beef scare comes
to pass.
In addition, Wendy's announced that it would employ a share
buyback program beginning in early May. The share buyback
move by Wendy's is seen as a long-term positive because it
reveals that the company believes its stock is undervalued
at current levels and will appreciate in price over the
long-term. Obviously, we like the idea of share buyback
programs and feel confident in investing side-by-side with
the company itself.
Finally, shares of Wendy's represent not only a compelling
value at current levels, but also a unique way to
diversify systematic risk out of a stock portfolio. Because
Wendy's is, in essence, a food retailer, its sells are
less impacted by broader trends in the economy. As such,
the stock can act as a diversifying tool and a way to
minimize risk in a long-term investing portfolio.
DRIP Information:
Shares to Qualify = 1 Accept Foreign Accounts: Yes
Auto-reinvestment = Yes Temper Enrollment Serv: Yes
Min/Max Investment = $20,000/year
Reinvestment Fees:
Dividend: 0 Cash: 0 Auto ReInvest: 0
Transfer Agent:
American Stock Transfer & Trust Company
59 Maiden Lane
New York, NY 10038
Attn: Dividend Reinvestment Dept.
Wendy's Dividend Reinvestment Plan
(718)-921-8283
1-800-278-4353
Industry Group: Restaurant 52-week high=$27.13
Annual Dividend Per Share=$0.24 52-week low =$16.75
Last earnings 01/00 est=0.38 actual=0.39
Next earnings 04-15 est=0.34 versus=0.30
P/E = 15
Analyst Ratings:
Strong Buy = 5
Moderate Buy = 5
Hold = 5
Moderate Sell = 0
Strong Sell = 0
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