Market Overview

Reasons To Buy Cracker Barrel On The Dip

Reasons To Buy Cracker Barrel On The Dip
Morgan Keegan Raises EPS Guidance on Cracker Barrel

A previous article on Benzinga detailed how investors should buy high yield stocks such as Coca-Cola (NYSE: KO) and McDonald's (NYSE: MCD) on the decline.

You can also add Cracker Barrel Old Country Store (NASDAQ: CBRL) to that list. Like McDonald's and Coca-Cola, Cracker Barrel has appeal to income, growth and value investors.

Many are calling for a correction in the market, which places a value on stocks with a high dividend yield. That stock description certainly suits Cracker Barrel Old Country Stores.

Dividend stocks are favored during adverse market conditions, as the income stream provides a foundation for investors. In this way, the dividend serves as a safe haven asset.

At present, the average dividend yield for a member of the Standard & Poor's 500 Index is around 1.8 percent. Cracker Barrel  has a dividend yield of 4.10 percent. Income investors will appreciate how much higher that dividend yield is than that for Coca-Cola or McDonald's.

Related: Consider Buying Coca-Cola On The Dip For Long-Term Gains

There is much for value investors and growth investors, as well, to like about Cracker Barrel Old Country Stores. The present price-to-sales ratio is 0.87. That means that each dollar of sales is priced at nearly a 15 percent discount in the stock price. As earnings are double digits this year, it is hardly the proverbial, "catching a falling knife" that investors should shun.

Growth investors should like what Cracker Barrel Old Country Stores has to offer, too.

Earnings-per-share been holding steady at around 10-11 percent. It is projected to do so for the next five years, too. Double digit earnings growth is always appealing to growth investors.

Cracker Barrel Old Country Stores is down more than 9 percent for 2014.

The stock is presently trading around $98.50. The mean analyst target price over the next year of market action is $108.33.

Posted-In: Long Ideas Dividends Restaurants Trading Ideas General Best of Benzinga


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