So Caribou Coffee (NASDAQ: CBOU [FREE Stock Trend Analysis]) is being acquired by the Joh. A. Benckiser Group, the same outfit that bought Peet's Coffee & Tea in July. Caribou will continue to operate as a standalone business, and it will continue to compete with the likes of Coffee Holding Co. (NASDAQ: JVA), Dunkin Brands (NASDAQ: DNKN), Green Mountain Coffee Roasters (NASDAQ: GMCR) and Starbucks (NASDAQ: SBUX).
Here is a quick look at the recent performance of coffee stocks and what analysts expect from these competitors:
Coffee Holding Co.
This Staten Island-based maker and distributor coffee products has a market capitalization of about $51 million and dividend yield of about 1.7 percent. The long-term EPS growth forecast is about 16 percent, and the forward earnings multiple is less than the industry average price-to-earnings (P/E) ratio. But the return on equity is only about four percent. And short interest is almost 18 percent of the float, though the number of shares sold short is the lowest it has been since September.
Both of the analysts surveyed by Thomson/First Call who follow the stock recommend buying shares, and they have for at least three months. Their mean price target, or where they expect the shares to go, represents almost 22 percent potential upside. But that target is considerably less than the 52-week high reached last March.
Shares have traded mostly between $6 and $8 since August. However, the share price is still more than 20 percent higher than six months ago. The stock has narrowly outperformed the likes of J.M Smucker (NYSE: SJM) and Kroger (NYSE: KR) in that time.
This operator and franchisor of quick-service restaurants under the Dunkin Donuts and Baskin-Robbins brands sports a market cap of about $3.2 billion. It also offers a dividend yield near 1.9 percent. Its P/E ratio is higher than the industry average, but so is its operating margin. The long-term EPS growth forecast is almost 19 percent and the return on equity is more than 16 percent. The short interest is about nine percent of the float.
Nine of the 19 analysts surveyed recommend buying shares; seven of them rate the stock at Strong Buy. They believe the stock still has some room for growth, as their mean price target is more than eight percent higher than the current share price.
But shares are almost 12 percent lower than six months ago, though they have risen about six percent in the past month. The stock has underperformed McDonald's (NYSE: MCD) and Starbucks, as well as the S&P 500, over the past six months.
Green Mountain Coffee Roasters
This purveyor of specialty coffee and coffeemakers has a market cap of less than $6 billion and it is headquartered in Waterbury, Vermont. The P/E and PEG ratios are less than the industry averages. The long-term EPS growth forecast is more than 18 percent and the return on equity is more than 17 percent. Short interest has been generally rising since June and now is about 40 percent the float.
Half of the 14 polled analysts recommend buying shares, but only one recommends selling. Their mean price target represents more than 16 percent potential upside, but that is much less than the 52-week high reached early this year.
However, Green Mountain shares are up almost 95 percent from six months ago. The share price surged in November after the company posted strong quarterly results and boosted its guidance. The stock has outperformed competitors Farmer Brothers (NASDAQ: FARM) and Starbucks, as well as the Nasdaq, over the past six months.
The market cap of the largest coffeehouse company in the world is about $40.5 billion, and its dividend yield is near 1.6 percent. The P/E ratio is a bit higher than the industry average, but the operating margin is much higher. The long-term EPS growth forecast is more than 18 percent and the return on equity is about 29 percent. Shares sold short is a little over one percent of the float.
Of the 30 analysts polled, 21 recommend buying shares; 11 of them rate it at Strong Buy. They believe the stock has some room to run as their mean price target is about nine percent higher than the current share price. That would be a level the stock has not seen since reaching a multiyear high back in April.
Shares are up more than nine percent in the past month but are still down about 1.5 percent from six months ago. Over the past six months, the stock's performance has been in line with that of McDonald's and Caribou Coffee, but it has underperformed the broader markets.
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