Ruddick Eats Competitors for Lunch
Ruddick (RDK) is an unlikely marriage that is successful.
The holding company has two unrelated businesses: a global thread and yarn company and a regional supermarket chain. TheStreet.com Ratings gives Ruddick a "buy" and expects the stock to outperform competitors Winn-Dixie Stores (WINN), Ingles Markets (IMKTA), SafeWay (SWY) and Weis Markets (WMK) because it's fundamentally better.
Harris Teeter is Ruddick's supermarket chain, operating in eight Southern states and the District of Columbia. The store sells a range of grocery items, personal products and prescription drugs through its pharmacies. The chain is known for cleanliness and competitive pricing. Harris Teeter accounted for 92% of RDK's fiscal 2008 revenue.
American & Effird, the other subsidiary, is a manufacturer of industrial sewing thread and embroidery. The company has an extensive global presence, with wholly owned units spread across the world, from Canada to China to Colombia.Ruddick has posted consistent EPS growth since the beginning of fiscal 2006. In the latest quarter, EPS improved 15.9% from the fourth quarter of fiscal 2007, while net sales rose 8.79%. Winn-Dixie Stores and Weis Markets posted year-over-year declines in quarterly EPS. Ruddick's quarterly return on assets increased to 5.7% from 5.27%, and return on equity jumped to 11.74% from 10.95%. The company has a modest amount of debt, as reflected by a debt-to-capital-ratio of 0.29. It has weak liquidity, seen in its quick ratio of 0.32. Using the Food and Staples Retailing Index as a comparison, RDK is a bargain stock. The shares are trading at a discount based on price to book, price to cash flow, price to earnings and price to sales. The stock declined 25.18% last year and is trading near the bottom of its 52-week range of $23.82 to $39.79. RDK has an annual dividend yield of 1.81%.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV