Tomorrow's the big day for investors in gum-meister William Wrigley
Wall Street Wisdom:
- General consensus. The 10 analysts who follow Wrigley are an unusual lot. For the most part, they appear to have actual opinions. Only one of the 10 rates Wrigley a hold. Seven of the rest vote buy, while the other two say sell.
- Revenues. Consensus estimates call for the company to report a 14% rise in sales for Q4 in comparison to last year, to $1.1 billion.
- Earnings. Profits, in contrast, are only expected to rise 6% to $0.55 per share.
Margin watch:
Watching Wrigley's margin movement is like chewing on a stick of gum. It gives you something to do with your time, but doesn't really accomplish much. Average gross margins have declined just 20 basis points in 18 months. Operating and net margins declined by about twice that, but basically things are chugging along just fine here. No major problems noted.
|
Margins% |
6/04 |
9/04 |
12/04 |
3/05 |
6/05 |
9/05 |
|---|---|---|---|---|---|---|
|
Gross |
56.1 |
56.0 |
55.9 |
55.9 |
56.2 |
55.9 |
|
Op. |
20.5 |
20.2 |
19.7 |
19.8 |
20.2 |
20.1 |
|
Net |
14.0 |
13.8 |
13.5 |
13.5 |
13.9 |
13.5 |
Dividend diligence:
With just a 1.7% dividend yield, Wrigley wouldn't make the cut for the dividend hunters at Motley Fool Income Investor (where our recommendations pay an average dividend two-and-a-half times as large). However, the firm did raise its dividend 17% this time last year, to $0.28 per share, per quarter. The previous year saw a 9% dividend hike, preceded by a 5% boost in 2003 and a 10% increase in 2002. I'd say odds are we'll see another hike tomorrow.
Competitors:
Wrigley's publicly listed competitors include Topps
Fool contributor Rich Smith does not own shares of any company named above.
