Not So “Whole” Foods (WFMI)

RSS

Whole Foods (WFMI) is starting to intrigue the value players on Wall Street (and us) with its current 3.52% dividend yield. Unfortunately, the reason for the high yield is that the company's stock price has declined so rapidly, closing trading on Thursday afternoon at $22.71. Whole Foods' stock price is down over 45% this year, and is far off its all-time high of $77 it set in December of 2005. The company has seen its niche organic products line come under attack from competing grocers who are now stocking organic foods themselves. The cost factor of paying more for better quality is hurting the company as well, given the recent economic slowdown. Whole Foods not Feeling so FreshWhole Foods is hoping to reap some rewards next year of its pricey acquisition of the Wild Oats chain, which essentially removed their main competitor from the market. Expansion plans are still in place for 51 stores this year, which would be up from 34 stores two years ago. Such aggressive expansion plans are probably another reason for Whole Foods' stock price decline. If the company decides to pull back on those expansion plans, they may be able to address the falling stock price with a buyback, and then hopefully a dividend increase. In short, WFMI is beginning to look more attractive at these current levels, but investors should probably just browse the aisles for now and wait for a catalyst to turn Whole Foods' fortunes around. Whole Foods (WFMI) is not recommended at this time, and currently holds a Dividend.com rating of 2.8 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks as well as a detailed explanation of our ratings system here.

Dividend.com archives (articles more than 30 days old) are only available to Dividend.com Premium subscribers.

Sign up for a Dividend.com Premium account for instant access to article archives, stock ratings on nearly 1,600 dividend-paying stocks, and much more! FREE TRIAL available!

If you are a current Dividend.com Premium subscriber, please click here to log in.

Free Updates

Join over 100,000 investors who get the latest news from Dividend.com.

Best Dividend Stocks

Looking for stocks that are poised for growth and pay solid dividends? Visit our list of the:

Best Dividend Stocks

Best CD Rates

Sitting on some extra cash and looking for the most current and profitable CD Rates?

Get The Best CD Rates

14 Day Free Trial

Earn more from your dividend portfolio within the next 14 days.

Sign Up Today