Einstein Noah Group has Appeal for Gr...
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Jul
18
Tim Lambert
Einstein Noah Group has Appeal for Growth, Value, and Income Investors
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Small caps are becoming particularly alluring with all of the comment about a market correction due to blue chips like Coca-Cola (NYSE: KO), ExxonMobil (NYSE: XOM), and Wal-Mart (NYSE: WMT) doing so well over the run of the bull market.

Einstein Noah Group (NASDAQ: BAGL), a chain of bagel restaurants, is one such stock (chart below).

The small cap has appeal to growth, value and income investors.  For growth investors, in the next five years, earnings-per-share expected to rise by 15 percent.  That is a very bullish trajectory from this year and the past five years, which was negative.  A projected trend like that should please all growth investors as it is a positive outlook.

For value investors, Einstein Bagel is selling at a price-to-sales ratio of 0.63.   That means that every dollar of sales is going for more than a one-third discount of the stock price of Einstein Bagels.  That is a very appealing discount.  The price-to-earnings ratio is projected to drop, which is also alluring to value investors.  That should increase its attractiveness to value investors.

There is much for income investors to like about Einstein Bagels, too.  A 3.40 percent dividend yield is very strong.  At present, the average dividend yield for a Member of the Standard & Poor’s 500 Index (NYSE: SPY) is around 1.8 percent.  Einstein Bagels also has a much higher dividend yield than Coca-Cola, ExxonMobil, and Wal-Mart.  In addition, the company has the cash flow to sustain the dividend

Despite the positive outlook for Einstein Bagels, it is down for the last week, month, quarter, six months, and year of market action.  Einstein Bagels is now trading for around $15.30 a share.  The mean analyst target price for Einstein Bagels over the next year of market action is $18.00.

That upside combined with its high dividend yield should make for a tasty long term total return!

 



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