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SpartanNash: A 4.5% Yield From This Undervalued Grocer

Published Tue, 15 Sep 2020 10:40:11 -0400 on Seeking Alpha

Seeking AlphaDividend Ideas | Services SpartanNash: A 4.5% Yield From This Undervalued GrocerSep. 15, 2020 10:40 AM ET|| About: SpartanNash Company (SPTN)by: Gen AlphaGen Alpha Long Only, Value, Growth, Growth At Reasonable PriceSummarySpartanNash is the fifth largest food distributor in the U.S. and also operates a network of retail stores.
The company has shown strong revenue growth during the pandemic, and has made good progress in paying down its debt.
Despite margin pressures, the shares remain undervalued with an attractive 4.5% dividend yield.
The grocery sector has been one of the net winners during the pandemic over the past six months. They first benefited from the effects of “pantry-loading”, as consumers panic-bought everyday household items and food products. Then, the sector benefited from stay-at-home measures, which compelled consumers to do more cooking and dining at home. In this article, I’m focused on the food distributor and retailer, SpartanNash (SPTN). I evaluate whether if it makes an attractive investment; so let’s get started.

(Source: Supermarket News)
A Look Into SpartanNash
SpartanNash is a Fortune 400 company and is the fifth largest food distributor in the United States. It is also a leading grocery distributor to U.S. military commissaries. It currently operates more than 155 corporate-owned retail stores in nine states, and distributes to more than 2,100 independent retail locations. SpartanNash currently employs nearly 19,000 employees, and last year, generated $8.5 billion in total revenue. As seen below, its store-presence is in the Midwest, and North-central regions of the U.S., with a heavy presence in Michigan, where its corporate headquarters are located.

(Source: Company website)
The company appears to be executing well, as total revenue for the company increased by 9.4% YoY during the latest quarter, representing its 17th consecutive quarter of growth. The food distribution side... Read more