+ 2.93
+ 0.87%
+ 3.04
+ 0.9%
+ 3.77
+ 0.91%
+ 0.28
+ 0.2%
+ 1.62
+ 0.97%

Reasons to Buy Cracker Barrel on the Dip

July 30, 2014 3:46 pm
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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. And 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 nine 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.