Wendy’s new capital allocation strategy leaves room for upside, could reduce debt

Wendy’s new capital allocation strategy leaves room for upside, and could reduce the fast food restaurant chain’s debt, say analysts.

On Friday Wendy’s Co. gave upbeat fourth-quarter guidance and its board doubled the company’s quarterly dividend to 25 cents a share. The board also approved a new $500 million share-repurchase authorization and announced an organizational restructuring. Stifel also raised its Wendy’s price target to $22 from $20 on Monday. “Historically, the company has returned more capital through share repurchases than dividends; however, the new capital plan has likely shifted that strategy,” wrote Stifel analyst Chris O’Cull.

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