Tim Hortons Reports Very Good 2Q, Money Expected To Be Returned To Shareholders

Tim Hortons, Inc.

reported 2Q EPS of $0.54 vs $0.44 this time last year, and exceeded the $0.51 estimate from Newcrest. Tim Hortons also sold its 50% stake in Maidstone Bakeries to JV partner Aryzta AG for $475M, according to Newcrest, which believes that Tim Hortons' bakery supply and pricing is safe through 2016. Tim Hortons is also expected to yield a special cash dividend of ~$2.40 per share, or possibly repurchase 10 million shares (around 6% of outstanding shares). The extra cash has been reported by management to be returned to the shareholders one of these ways, according to Newcrest. Newcrest maintains its "hold" rating for Tim Hortons and has raised the price target from $37 to $42. Tim Hortons, Inc. closed yesterday at $36.14.