Wendy’s elevated annual dividend yield is ‘raising eyebrows’
CNBC’s Jim Cramer said Wednesday he believes Wendy’s may have a tough year ahead after the franchise reported weaker-than-expected quarterly results last week. Wendy’s delivered softer-than-anticipated sales growth in North America and internationally while offering guidance below expectations. Still, management said they’re optimistic about 2024 revenue growth supported by lower commodity costs and incremental investments in its breakfast menu. However, Cramer said the stock’s 5.55% annual dividend yield is “raising eyebrows” as investors may question whether the quarterly payout can be sustained, given the difficult macroeconomic environment. Wendy’s share prices have dropped more than 7.5% year to date. WEN 1Y mountain WEN stock performance. JPMorgan downgraded Wendy’s to neutral from overweight (hold from buy) while cutting its price target to $19 per share from $22. The analysts see increased price competition as a risk in the category. Fellow fast food competitor McDonald’s also reported a challenged fourth quarter earlier this month driven by softer revenue but offset by higher menu pricing.
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