Supervalu (SVU) Dividend Stock Analysis
SUPERVALU INC. operates as a grocery retailer in the United States. The company is member of the S&P 500 and the S&P Dividend Aristocrats indexes.
SUPERVALU INC. has paid dividends for more than 70 years and consistently increased payments to common shareholders every year for 35 years. The company announced a 1.5% dividend raise in May 2009, plus a $70 million stock buyback initiative.
Between June of 1999 up until June 2009 this dividend growth stock has delivered a negative average total return of 4.00% annually. The stock is trading below the levels it was changing hands a decade ago.
The company has managed to deliver a 4.80% average annual increase in its EPS between 1999 and 2008. Not reflected in 2008 earnings per share is a $15.71/share non-cash impairment charge, required by Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” to goodwill at certain Retail food reporting units and indefinite-lived trademarks and tradenames related to the Acquired Trademarks. You could read more about it here and here. For 2010 analysts are expecting a decline in EPS to $2.10, followed by rebound to $2.40 in FY 2011.
Future EPS growth would come from synergies related to the acquisition of 1124 Albertson’s stores in 2006 and new store openings. The latter are expected to slow down in FY 2010. Despite flat same store sales, the company generates sufficient cash to distribute back to shareholders in the form of dividends or stock buybacks.