Cracker Barrel Old Country Store (CBRL) has continuously increased its dividend while maintaining significant amounts of cash on its balance sheet, making the restaurant company an attractive holding for Morley Campbell, Portfolio Manager, Analyst and Managing Director at NFJ Investment Group, LLC.
“On a forward-earnings basis, it was 13.8 times earnings, and the dividend growth was particularly impressive, doubling year over year at the time we made our purchase. Despite the dividend growth, Cracker Barrel had over $120 million of cash on the balance sheet, an unprecedented level,” Campbell said.
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Campbell adds that the $120 million Cracker Barrel has on its balance sheet is particularly significant given the restaurant currently has a market cap in the single-digit billions.
“[Cracker Barrel Old Country Store is] an operator of over 600 restaurant and gift shops in the U.S., and they had increased their dividend and were yielding 3%,” Campbell said, adding that he “liked the valuation” of the company.
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