Flowers Foods: Dividend Not Sustainable, Maintain Sell

Ian BezekInvesting Group LeaderFollow5ShareSavePlay(9min)Comment(1)SummaryFlowers Foods trades near 52-week lows, but I don't see much of a bullish case due to structural earnings stagnation and balance sheet strain.Recent Q4 earnings beat expectations, yet 2026 EPS guidance of $0.80–$0.90 is well below prior consensus and close to flat versus 2016 levels.FLO's dividend payout exceeds earnings, and the company will have to make challenging capital allocation decisions going forward.Other packaged food companies are selling at similar valuations and have more compelling forward outlooks.Looking for a helping hand in the market? Members of Ian's Insider Corner get exclusive ideas and guidance to navigate any climate. Learn More » David Kreuzberg/iStock via Getty Images I'm a contrarian at heart. I see a stock at a 52-week low, and my first instinct is to want to buy. It's enjoyable to take the stance that the crowd is wrong and get in on an out-of-favor stock before sentiment startsThis article was written byIan Bezek23.53K FollowersFollowIan Bezek is a former hedge fund analyst at Kerrisdale Capital. He has spent the decade living in Latin America, doing the boots-on-the ground research for investors interested in markets such as Mexico, Colombia, and Chile. He also specializes in high-quality compounders and growth stocks at reasonable prices in the US and other developed markets. Ian leads the investing group Ian's Insider Corner. Features of the group include: the Weekend Digest which covers everything from new ideas to updates on current holdings and macro analysis, trade alerts, an active chat room, and direct access to Ian. Learn More.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.