Safeway (FRA:SWY) Forward Rate of Return (Yacktman) % : 43.83% (As of Sep. 2014)

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What is Safeway Forward Rate of Return (Yacktman) %?

Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Safeway's forward rate of return for was 43.83%.

The historical rank and industry rank for Safeway's Forward Rate of Return (Yacktman) % or its related term are showing as below:

FRA:SWY' s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: -17.3 Med: 9.2 Max: 43.9
Current: 43.75

During the past 13 years, Safeway's highest Forward Rate of Return was 43.90. The lowest was -17.30. And the median was 9.20.

FRA:SWY's Forward Rate of Return (Yacktman) % is not ranked
in the Retail - Defensive industry.
Industry Median: 16.055 vs FRA:SWY: 43.75

Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past seven years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.

Safeway Forward Rate of Return (Yacktman) % Historical Data

The historical data trend for Safeway's Forward Rate of Return (Yacktman) % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Safeway Forward Rate of Return (Yacktman) % Chart

Safeway Annual Data

Trend

Dec04

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Forward Rate of Return (Yacktman) %

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6.70

-11.97

3.69

28.62

37.20

Safeway Quarterly Data
	Dec09	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14
Forward Rate of Return (Yacktman) %	Get a 7-Day Free Trial															31.47	37.20	35.13	39.67	43.83

Competitive Comparison of Safeway's Forward Rate of Return (Yacktman) %

For the Grocery Stores subindustry, Safeway's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Safeway's Forward Rate of Return (Yacktman) % Distribution in the Retail - Defensive Industry

For the Retail - Defensive industry and Consumer Defensive sector, Safeway's Forward Rate of Return (Yacktman) % distribution charts can be found below:

* The bar in red indicates where Safeway's Forward Rate of Return (Yacktman) % falls into.

Safeway Forward Rate of Return (Yacktman) % Calculation

Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

Safeway's Forward Rate of Return of Sep. 2014 is

Forward Rate of Return	=	Normalized Free Cash Flow	/	Price	+	5-Year EBITDA Growth Rate
	=	1.18647619	/	26.873	+	0.2
	=	24.42 %

Safeway (FRA:SWY) Forward Rate of Return (Yacktman) % Explanation

Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.

Be Aware

In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.

Safeway Forward Rate of Return (Yacktman) % Related Terms

Thank you for viewing the detailed overview of Safeway's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.

Safeway (FRA:SWY) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Retail - Defensive » Safeway Inc (FRA:SWY) » Definitions » Forward Rate of Return (Yacktman) %

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Traded in Other Exchanges

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Address

Website

http://www.safeway.com

Safeway Inc was incorporated in the state of Delaware in July 1986 as SSI Holdings Corporation and, thereafter, its name was changed to Safeway Stores, Incorporated. In February 1990, the Company changed its name to Safeway Inc. The Company is a food and drug retailers in the United States, with 1,335 stores at year-end 2013. The Company's U.S. retail operations are located principally in California, Hawaii, Oregon, Washington, Alaska, Colorado, Arizona, Texas and the Mid-Atlantic region. The Company also has a network of distribution, manufacturing and food-processing facilities. The Company retail business operates into seven geographic retail operating segments; Denver, Eastern, Northern California, Phoenix, Northwest, Texas and Southern California. In all geographical retail operating segments, it operates one store format, where each store offers the same general mix of products with similar pricing to similar categories of customers. The Company does not operate supercenters, warehouse formats, combination clothing/grocery stores or discount stores. It owns and operates GroceryWorks.com Operating Company, LLC ("GroceryWorks"), an online grocery channel doing business under the names Safeway.com and Vons.com. Safeway's stores provide grocery items tailored to local preferences. Its stores offer a selection of food and general merchandise and feature a variety of specialty departments such as bakery, delicatessen, floral and pharmacy. In addition, its stores offer Starbucks coffee shops and adjacent fuel centers. The Company also owns more than 300 other trademarks registered and/or pending in the United States Patent and Trademark Office and other jurisdictions, including trademarks for its product and services such as Safeway, Safeway SELECT, Rancher's Reserve, O Organics, Lucerne, Primo Taglio, Eating Right, mom to mom, waterfront BISTRO, Bright Green, Pantry Essentials, Open Nature, Refreshe, Snack Artist, Signature CafÃ©, Priority, just for U, My Simple Nutrition, Ingredients for Life, and other trademarks such as Pak'N Save Foods, Vons, Pavilions, Randalls, Tom Thumb, and Carrs Quality Centers. Blackhawk, a subsidiary of Safeway, provides third-party gift cards, prepaid cards, telecom cards and sports and entertainment cards to a group of top North American retailers for sale to retail customers. The competitive factors that affect the Company's business are location, quality, price, condition of assets, marketing and promotional strategies, service and consumer loyalty to other brands and stores. It faces intense competition from traditional grocery retailers, non-traditional competitors such as supercenters and club stores, as well as from specialty supermarkets, drug stores, dollar stores, convenience stores and restaurants. The Company's compliance with the federal, state, local and foreign laws and regulations have been adopted regulating the discharge of materials into the environment or otherwise related to the p

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