FDP - Fresh Del Monte: Deep Value Winner With Sustainable 5% Cash Yield
2024-06-20 09:34:00 ET
Summary
- Fresh Del Monte Produce offers a high dividend yield of 4.7%, while trading near a 50% discount to my net asset liquidation value estimate.
- Total enterprise value including debt is now trading at less than its cost-accounting measured tangible book value, which is incredibly rare for a profitable business.
- Fresh Del Monte's stock quote is primed to rise substantially over the next 12-18 months, conservatively offering a total return potential of +100% for buyers today.
Fresh Del Monte Produce Inc. ( FDP ) is a global grower and supplier of bananas, alongside a list of other fresh fruits and vegetables, cleaned and sometimes packaged for consumers to buy at your local grocery store. (Not to be confused with Del Monte Pacific Limited, a different company canning vegetables like green beans.)
I last wrote about the incredible FDP value proposition developing in its stock back in November here . After a quick +30% share price gain after that article was published, price has slowly eroded, and is now trading at roughly the same level as seven months ago. The good news is profits and cash flow keep coming in the door daily, increasing the company's underlying worth. The dividend has been raised to $1.00 annually (which works out to 4.7% on a forward-yield basis), and free cash flow yield is now running at 11.7%....
Fresh Del Monte: Deep Value Winner, With Sustainable 5% Cash Yield