J&J Snack Foods: Best in Class

BOSTON (TheStreet) -- J&J Snack Foods JJSF was founded in 1971 when Gerald Schreiber purchased the J&J Pretzel Co. for about $73,000 at a bankruptcy auction. Schreiber rapidly expanded the company, securing a trademark for Superpretzel, now a staple at movie theaters, in 1973. Three years later, he had built a national distribution network for his soft pretzels and began acquiring competitors. The company grew steadily until 1985 when it went public on the Nasdaq. That same year, sales passed the $25 million mark. Fiscal 2010 sales are expected to hit $688 million. In the food-products industry, J&J Snack is a best-in-class company. Focusing on the concession and frozen beverage markets, J&J has increased sales 6.5% annually since 2007 and boosted earnings per share by twice that amount. Its stock has fallen 10% in the past 12 months, but analysts are overwhelmingly bullish. J&J Snack's fiscal third-quarter profit increased 6.2% to $15 million, or 85 cents a share, as revenue grew 5.5% to $190 million. The operating margin hovered at 14%. J&J Snack held $81 million of cash and just $310,000 of debt at the end of the quarter -- ample liquidity. The company has fuel on hand for acquisitions, share buybacks or a dividend boost. It currently pays an 11 cent quarterly distribution, equaling an annual yield of 1.1% with a safe payout ratio of 18%. To read the rest, head over to TheStreet.com