"From today's price, Wall Street expects that those adjusted free cash flows will grow at 20% per year for the next five years, and 15% for the following five years."
-- David Meier, five minutes ago
Dave's right; average companies don't attain 15% or better cash flow growth over the course of a decade. Only exceptional firms do that. Retailers like, say, Starbucks
|
Cash from operations |
2006 |
1996 |
10-year CAGR |
|---|---|---|---|
|
Starbucks |
$1,132 mil |
$136 mil |
23.6% |
|
Wal-Mart |
$20,164 mil |
$2,383 mil |
23.8% |
Now, here's a reminder of why Whole Foods
|
Metric |
Kroger |
Safeway |
SUPERVALU |
Whole Foods |
|---|---|---|---|---|
|
EBITDA growth |
6.1% |
0.7% |
21.5% |
20.3% |
Remember, I didn't say that this stock is cheap. It isn't. But, again, it doesn't have to be. Investors throughout history have made billions buying into leaders in explosive industries whose stocks, while not cheap, were offering growth at a reasonable price. That's what we have with Whole Foods. Ready to eat yet?
You're not done with this Duel yet! Go back and read the other arguments, then vote for the winner!
Whole Foods and Starbucks are Stock Advisor picks. To discover Tom and David Gardner's entire portfolio of superior stocks -- currently beating the market by more than 39 percentage points -- try a free 30-day subscription.
Fool contributor Tim Beyers, ranked 1,272 out of more than 25,000 in our Motley Fool CAPS investor-intelligence database, wonders when Taco Bell will go organic. Hey, if junk food works for Warren Buffett.... Tim didn't own shares in any of the companies mentioned in this story at the time of publication. All of Tim's portfolio holdings can be found at his Fool profile. His thoughts on Foolishness and investing may be found in his blog. Wal-Mart is an Inside Value recommendation. The Motley Fool's disclosure policy prefers muesli to granola and Birkenstocks to Crocs.
