Baconator Packs a Dividend Punch !

exclamation words indicating a punch

Wendy’s Co. beefed up its quarterly dividend 20% to 12¢ a share from 10¢, continuing its annual streak of modest dividend increases started in 2012 to attract stock option traders and investors.

Baconator History

The Baconator was introduced in April 2007 as part of a push to add menu items that appeal to 18 to 34-year-olds and expand late-night sales.

Wendy's Baconator hamburger

Baconator was named the official burger of the Canadian Football League and a contest to build a giant Baconator had a $25,000 prize. Wendy’s also packed a southern punch with a Carolina Classic Burger to pay homage to some of the best favorites of the south. There’s also a “Baconator Boot Camp”.

What’s New?

Wendy’s doesn’t serve breakfast nationally after previous attempts in 2012 floundered and is trying again to capture more business in the morning to boost their sales and value to entice stock option traders and investors. Consumers are increasingly ditching cereal at home for egg-and-sausage sandwiches out.

Wendy’s announced it would spend $20 Million and hire thousands of workers to bring breakfast in 2020 to nearly 6,000 locations in the U.S. Looking ahead at the effect on their bottom line and stock option share potential, breakfast may seem like a natural move for Wendy’s, considering all other fast foods have a morning menu; however, even deep-pocketed rivals, like McDonalds, have found lackluster sales success, and are even scaling back breakfast.

Barb’s Takeaway

2019 third quarter global sales rose 5.7% and beat expectations. For 2020 Wendy’s expects global sales of $12 Billion to $12.5 Billion. Wendy’s stock has gained 32.5% for the year to date, compared to the S&P 500 index which is up 18.8% for the same period.

On October 11, 2019 there was unusually high options trading activity. About 9,000 option contracts of the October $21 Calls were purchased. At the same time, option traders started buying the January $20.50 Calls, usually an indication of option trading increased activity and the stock option is going to move higher over the next few weeks.

Are You a Bull or Bear?

Wall Street bull and bear wrestling

Date: October 22, 2019 -Stock: Wendy’s Co. (WEN)- Share price closed @ $21.65

If you’re a Bullish Mom and think Wendy’s will go up, try the January 17 Expiration Date – CALL $20.00 Bid;  and $ 19.00 Ask strike prices.  Premium is $1.05 (mid @86¢) debit to pay = Long Call Vertical Spread on  www.TDAmeritrade.com

On the other hand, Mom, if you think Wendy’s is bearish and will go down, try the Expiration Date:January 17 – PUT $20.00 Ask;  and $19.00 Bid strike prices. Premium is 30¢(mid @17¢) debit to pay = Long Put Vertical Spread on www.TastyWorks.com

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