There is a phenomenon known as the “Icahn Lift.” This is the term used when the stock price of a company rises after Carl Icahn acquires shares —  sometimes even when there’s only speculation that he will invest.

The latest company to get the “Icahn Lift” is Whole Foods Market (Nasdaq: WFM). While there’s serious doubt he actually owns shares of Whole Foods, shareholders could use a little of Carl Icahn’s magic.

Shares of the company are down almost 34% year-to-date. On a trailing basis, Whole Foods’ stock trades at a price-to-earnings ratio of 25, which is well below its five-year average P/E ratio of 37.

The problem is that Whole Foods is not growing as fast as it once was. There are only so many affluent neighborhoods in the United States. As Whole Foods expanded into lower income markets, it found that its new clientele can’t afford to load up their carts and as a result, the newer stores are not doing as well.

But slow growth is still growth nonetheless.

In the third quarter, total revenues at Whole Foods increased 10.5% from last year to $3.38 billion and the company reported earnings per share of $0.43, beating estimates by two cents.

The problem, and what the market is focusing on, is same-store sales. This term refers to sales revenue at stores that have been open for at least one year. Investors use this to compare stores after the initial excitement of a new store has worn off and sales stabilize.

Same-store sales have been gradually weakening each quarter. In the three previous quarters, Whole Foods reported average same-store sales growth of 5.3%. However, in Q3, Whole Foods saw same-store sale growth of 3.9%, missing market expectations by 1.1%

The other big issue is that Whole Foods is lowering prices to maintain leadership in the organic foods market, which results in declining margins.

Since the rumor of Icahn’s involvement circulated, investors have had a chance to get a second look at Whole Foods. Whether or not Icahn gets involved, there’s a lot to like.

Whole Foods has many options it can implement to boost earnings. Management has noted that it can remodel stores, implement a nationwide marketing campaign and introduce a loyalty program.

Simpler options include raising dividends. Whole Foods pays a 1.2% dividend yield, but with no debt and over $2 a share in cash, I certainly think it could do more. Currently, its dividend is only a 29% payout of its earnings.

Another way the company is looking to boost shareholder value is with a share buyback program. Whole Foods plans to buy back $1 billion of its shares — good enough to reduce shares outstanding by 7%. Considering the drop in share price, I think this is a smart use of the company’s capital.

With a rock solid balance sheet, Whole Foods could also easily make an acquisition. This includes potentially buying up another organic foods grocer or taking the path toward vertical integration.

Along those lines, United Natural Foods (Nasdaq: UNFI) would be a nice fit.

I profiled United Natural Foods for StreetAuthority back in April. At the time, I thought United Natural Foods was the better bet for investors. Shares of United Natural Foods are even cheaper today than back then. With Whole Foods’ recent share price drop, both companies are looking rather attractive.

United Natural Foods is Whole Foods’ main supplier, which accounts for 35% United’s business. Whole Foods acquiring United would be a win-win for both companies.

Risks to Consider: The biggest problem facing Whole Foods is intense competition, which is shrinking its margins. Further margin weakness will have an impact on earnings growth and its share price.

Action to take –> Buy shares of Whole Foods on the belief that the company remains the leader in a young and fast growing industry. With an experienced management team, look for Whole Foods to get back on track whether Carl Icahn gets involved or not.

If Whole Foods raised its dividends and bought back shares, it would be on its way to sporting a top-notch “Total Yield.” My colleague Nathan Slaughter uses the Total Yield score to find the world’s most profitable, stable companies. Since 1982, these dividend payers returned an average of 15% per year. Last year, this group of stocks more than doubled the S&P 500’s return. To learn more about the Total Yield strategy, click here.