Here is what I would have had if I had bought 1,000 Greggs shares 10 years ago.

Greggs (LSE: GRG) shares float at London Stock Exchange in 1984 with a market capitalization of £15m and a legacy of over 260 stores. Today, it is £3.2bn FTSE 250 a company with more than 2,500 stores.

Needless to say, the stock price has risen dramatically over the past four decades. But what if I ‘only planted’ ten years ago? How much would 1,000 shares be worth today? Let’s find out.

Return of the mouth

In September 2014, one Gregs share was worth 536p (or £5.36). That means I would need to fork out £5,360 to fund £1,000.

Fast forward to today, one share is trading at 3,152p (£31.52). That’s a sweet 488% increase. So my holding would be £31,520.

Obviously, that’s an amazing long-term return. But factor in the benefits too, including an occasional special dividend as a treat, and the total return could be around £40,000.

Next year, Gregs predicts that it will issue a dividend of 74.4%. Assuming this is met, which has yet to be confirmed, I could get another £744 from my 1,000 shares.

And that can be regardless of whether the share price goes up or down.

Infinite expansion

In 2013, the company shifted its focus from high street bakery to affordable food on the go. Since then, it has made significant strides in expanding beyond its traditional heartland in the North of England.

It specifically targets areas with high foot traffic and convenient locations, including airports, train stations, retail parks, and service stations. In 2017, it opened its first drive-through.

Currently introducing café-style formats in supermarkets such as Accommodations in SainsburyAsda once Tescowhile increasing its presence in delivery applications Just eat it again Uber He eats. Evening trade (after 4pm) is booming.

In the future, the company plans to have more than 3,000 stores and build supply chain capacity to support this growth.

International expansion may be on the cards at some point, even if your last overseas venture didn’t end well. This can bring uncertainty and execution risks, so it will need to be managed sensibly.

Changing eating habits?

In the first half of 2024, net sales grew by 13.8% year-on-year to £961m, while pre-tax profit rose by 16.3% to £74m. it paid dividends of 18.7% to 19%.

Clearly, business is good at Greggs, and this is reflected in the stock count. It currently trades at 23 times earnings. That’s almost double the FTSE 250 average, meaning it plays a value premium.

This could be a problem if healthy eating habits catch on quickly, as some predict. Weight loss drugs like Wegovy are increased and these can suppress cravings for high-calorie foods, including sugary and baked goods. This may jeopardize the firm’s expansion plan and impact earnings growth.

On the other hand, Greggs has an excellent track record when it comes to menu innovation. Many were skeptical when it launched its vegan sausage roll in 2019 due to the rise of plant-based diets. However the product became another cult hit.

It is now expanding its Healthy Choice range, which includes salads, rice dishes and chicken wraps.

In the long run, I think Gregs stock will continue to do well. I’m still holding on to my shares. But I’m watching too The green of the grassa fast-growing salad chain, to hedge my bets.