The biggest U.S. milk processor is now a penny stock.
On Tuesday, shares of Dean Foods—which was based in Franklin Park for more than 70 years until 2001—closed at less than $1 for the first time since they started trading more than two decades ago. The destruction of value—from a peak of $6.2 billion in 2007 to about $90 million now—is as simple to explain as it is dramatic: Americans aren’t drinking as much milk.
Amid fierce competition to supply grocery stores’ own brands, Dean’s margins are razor thin — averaging about 3.8% over the past five years. The company’s situation deteriorated further after Walmart Inc., a key customer, built its own milk processing plant last year.
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