Not all food companies are alike. If you're Hormel (NYSE:HRL), you can crank out tons of SPAM from a central location and ship it everywhere. Likewise for Campbell Soup (NYSE:CPB) and its condensed soups.

But what do you do when you're Flowers Foods (NYSE:FLO) and your stock-in-trade is baked goods? Then you have a tricky situation -- do you invest the money in building production facilities across your market to ensure quick delivery of fresh product, or do you risk the wrath of consumers by resorting to preservative-laden Franken-loafs?

So far Flowers has been making the right decisions (namely, deliver fresh goods quickly). Sales were up more than 11% this quarter, and the company's breads continue to gain share in what is an otherwise flat market. And though margin analysis is hampered by some items (an insurance recovery, stock option expense, and so on), I think it's still reasonable to say that the company's doing alright on the margins.

Flowers definitely has some factors working in its favor. Not only is it a low-cost producer, but it is also rather specialized. Companies like Sara Lee (NYSE:SLE) and Campbell make baked goods too, but they also make many other things. And even though the company operates 37 bakeries to serve its customers, it still generates a double-digit return on invested capital above the cost of that capital.

The drag here is, of course, the price of the equity. The stock has had a run-up over the past few years that belies its food stock label. And though there are food and beverage stocks that do continue to defy gravity (Hansen Natural (NASDAQ:HANS), anyone?), factors like energy and packaging costs, not to mention simple valuation, could ultimately weigh on these shares.

I'm a big fan of the company's products (especially the Cobblestone Mill brand), but that doesn't really mean a lot when you think the stock is overpriced. I can certainly see the appeal in a growing and well-run company that is far removed from technology, oil, and minerals, but habitually paying too much for any stock is a sure ticket toward a future of living off of white bread and bologna.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).