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Free Basic Stock Performance Review: Wendy’s International Inc. (WEN)
Wendy’s International Inc.
4288 West Dublin-Granville Road
P.O. Box 256
Dublin, Ohio 43017-0256
(614) 764-3100 phone number
(614) 764-3330 fax number
What Wendy’s International Inc. (WEN) Does
The first thing that you should know about the stock that you are considering to invest in is what the company does. In the case of Wendy’s International Inc. the answer is simple. They own, operate, and franchise Wendy’s brand fast food restaurants in the United States and Canada, as well as several other countries around the world. As of mid-2006 this company had 9,900 restaurants and franchises under their brand.
52 Week Performance Review: WEN
During the 52 week period that ended on 08/25/06 WEN fluctuated between 43.56 and 66.35. On 08/25/06 the value of this stock was valued between 62.19 and 62.94. This price is close to the year’s peak value, which indicates that the stock is strong enough to maintain its growth. While some restaurant stocks have been floundering this year, WEN seems to be doing fine, and it is predicted that the value of this stock should increase slightly over the next year and reach a target price of 64.44.
Historical Performance Review: WEN
Over the last five years WEN has had its fair share of ups and downs. However, the overall trend for this stock since 2002 has been one of value growth. Between 2002 and 2003 WEN’s value dropped slightly from about $30 per share to about $26 per share. Between 2003 and 2004 the value rebounded to a price of about $40 per share. The price stayed basically the same between 2004 and 2005, however, by 2006 the stock had once again grown to a value of about $58 per share. The growth trend seems to be continuing into 2006 where it has reached prices that have topped $66 per share.
Strengths of WEN
As a stock WEN has several strengths. First it is not a new stock. It has been available for over five years and because of this it is more reliable stock than younger restaurant stocks like BKC. This stock also pays its shareholders a small dividend of about 0.68 per share. Financially this company is also in a fairly good position. It is making a profit, and their quarterly revenue is growing. They also have a great debt to cash ratio. As of 09/02/06 their total debt balance was $903.48 million and their total cash balance was $1.23 billion. This is a rather unique financial position for a franchise restaurant as its competitors usually have a much higher debt balance compared to their cash balance. This is a major plus for this company. As a company the WEN is also in a pretty good position. They have nearly 10,000 restaurant franchises across the country, and they have a fairly well known name.
Weaknesses of WEN
The only real weakness that WEN has is that it is not the top performer in its market. WEN’s main competitor is McDonald’s that brings in almost seven times the annual revenue that WEN does. WEN also is up against a lot of competition from McDonald’s, Burger King, Yum! Brands, as well as private fast food restaurants.
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