"With an expected dividend yield of 8.5% and track record of stable cash flow generation, we believe RNDY represents an attractive stock for yield-oriented investors. Recent sales trends have been soft, but we see plenty of support for the projected $42M annualized dividend payout, even assuming continued flat to -LSD% comps going forward. With dividend risk emerging at -5% comps for two years (an unlikely scenario), we believe risk/reward looks attractive," wrote Baird analyst Peter Benedict.
Roundy's is the Milwaukee-based parent company of Pick 'n Save, Rainbow, Copps, Metro Market and Mariano's Fresh Market stores. The company is the largest grocery retailer in Wisconsin and operates 158 stores in Wisconsin, Minnesota and Illinois.
Roundy's stock is traded on the New York Stock Exchange under the ticker symbol RNDY.
Roundy's net income increased 6.6 percent to $9.2 million for the fourth quarter and 4.0 percent to $48.0 million for the year.