Sadly, when Newcastle United defender Dan Burn was born, the London Inventory Trade hadn’t launched its SEAQ (Inventory Trade Automated Citation) system — that might occur in 1993. Nonetheless, I consider Greggs (LSE:GRG) shares have been altering arms for round 50p per share when Dan Burn was born. The inventory is up 3,870% since then.

Clearly, each the sausage roll maker and now-England centre again have come good over the previous 33 years. And if an investor had positioned a £1,000 funding into Greggs when Dan Burn was born, they’d now have £39,700. That’s fairly the return.

Why has Greggs carried out so properly?

Greggs has carried out exceptionally properly over the previous 30 years because of its skill to adapt and reposition itself in a altering retail panorama. Initially a conventional bakery, Greggs shifted its focus to turn out to be a number one food-to-go chain, concentrating on on-the-go shoppers moderately than competing immediately with supermarkets.

This strategic transfer was essential, because it allowed the corporate to develop its choices, resembling scorching drinks, breakfast objects, and marginally more healthy selections, assembly evolving client calls for and broadening its enchantment.

Greggs additionally excelled at sustaining affordability and accessibility, opening shops in high-traffic areas like prepare stations and airports, which helped drive constant development whilst different excessive avenue retailers struggled.

The model’s sturdy neighborhood roots, dedication to worth, and willingness to innovate — evident in standard launches just like the vegan sausage roll — have cemented its popularity as a staple of British meals tradition, resulting in rising gross sales and sustained profitability.

What about now?

As a few of you’ll know, I’m not the largest fan of Greggs inventory. And the reason being merely the valuation.

Trying forward, Greggs is about to expertise a fall in earnings in 2025 however a restoration within the years after. In 2025, the corporate’s price-to-earnings (P/E) ratio is forecast at 14.7 occasions earnings, with earnings per share (EPS) projected to achieve £1.35. The dividend per share is anticipated to be £0.6803, leading to a dividend yield of three.42%.

Shifting into 2026, Greggs’s P/E ratio is predicted to say no barely to 14.3, reflecting continued earnings development. EPS is about to extend to £1.394, whereas the dividend per share rises to £0.701. This development lifts the dividend yield to three.53%. It’s a modest however vital enhance.

By 2027, the P/E ratio is projected to fall additional to 13.7, with EPS rising to £1.447. The dividend per share is forecast at £0.7402, pushing the dividend yield up to three.72%.

The issue is the earnings development and the dividends aren’t sufficient to fulfill the P/E ratio for my part. Actually, a dividend-adjusted P/E-to-growth (PEG), even excluding this 12 months’s reversal in earnings, is wholly unattractive and properly over two.

Personally, it’s not a inventory I’m contemplating. It could, nonetheless, given its rising dividends, be proper for different buyers. I’m additionally a little bit involved concerning the longevity of its baked items’ reputation in an more and more health-conscious surroundings.