Momentum Stock Watch: The Wendys Company (WEN)

Company Profile:

The Wendy’s Company, together with its subsidiaries, operates as a quick-service restaurant company. It operates through three segments: Wendy’s U.S., Wendy’s International, and Global Real Estate & Development. The company is involved in operating, developing, and franchising a system of quick-service restaurants specializing in hamburger sandwiches. As of December 29, 2019, it operated approximately 357 company owned restaurants; 5,495 franchised restaurants in the United States; and 936 franchised restaurants internationally. The company also owns and leases real estate properties. As of December 29, 2019, it owns 512 and leases 1,248 properties, which are leased or subleased primarily to franchisees. The company was formerly known as Wendy’s/Arby’s Group, Inc. and changed its name to The Wendy’s Company in July 2011. The Wendy’s Company was founded in 1969 and is headquartered in Dublin, Ohio.

Recent News:

The company increased its dividend on the 15th of September to US$0.12. Based on the announced payment, the dividend yield for the company will be 1.6%. Looking forward, earnings per share is forecast to rise by 6.1% over the next year. If the dividend continues on this path, the payout ratio could be 47% by next year.

For the fiscal second quarter of 2021, the company reported revenues of $493.3 million, adjusted earnings of 27 cents per share. Net income during fiscal second quarter soared 163.9% to $65.7 million, from $24.9 million reported in the year-ago quarter.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

WEN’s strengths can be seen in its better growth and strong profitability compared with its peers. Its revenue has increased over recent several years. Technical indicators signal the bullish signs, as there is a bullish crossover in the Stochastic oscillator, the MACD is trying to cross back up and the RSI stands at 53.13 with positive bias. We rate The Wendys Company (WEN) a STRONG BUY.