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Hormel's Dividend Growth Makes It A Standout Investment

Cash-Centered Creep profile picture
Cash-Centered Creep


  • Hormel is a Dividend King which has seen significant dividend growth.
  • The firm's strong brands and recent acquisitions make it likely to continue being profitable.
  • It is trading at a discount at this time.

Hormel Foods Corporation (NYSE:HRL) is a Dividend King - a stock which has paid consecutively rising dividends for 50+ years. Specifically, Hormel became a Dividend King this year, as the diversified food firm has paid consecutively rising dividends to its shareholders since 1967, and took its place alongside stocks such as Johnson & Johnson (JNJ) and Procter & Gamble (PG).

Notable enough as that dividend record is, what makes Hormel stand out is the growth of its dividend. Its dividend growth rate for 2012-2016 was an impressive 17.04%.

Year Dividend Per Share ($)
2012 0.30
2013 0.33
2014 0.39
2015 0.48
2016 0.56

Furthermore, Hormel's revenue and net income figures suggest that the dividend will continue to be well supported going forward.

Year Revenue ($) Net Income ($)
2012 8.23 billion 500.05 million
2013 8.75 billion 526.21 million
2014 9.32 billion 602.68 million
2015 9.26 billion 686.09 million
2016 9.52 billion 890.05 million

Hormel has been able to sustain its dividend record and be a profitable company due to its very diverse portfolio of strong food brands. Household names such as Dinty Moore, Jennie-O, Lloyd's, Skippy and SPAM account for the healthy income that Hormel generates.

Furthermore, Hormel is not complacent with respect to this portfolio. Its focus in recent years has been to complement its refrigerated foods with natural foods and organic foods and thus further diversify its offerings. To this end, Hormel has made several acquisitions: In 2014, it acquired CytoSport Holdings Inc., the nutritional products firm which makes Muscle Milk, for $450 million; in 2015, it purchased organic processed meat maker Applegate Farms for $775 million; and in 2016, it acquired nut-butter producer Justin's for an undisclosed sum. Such acquisitions add breadth and depth to Hormel's already impressive

This article was written by

Cash-Centered Creep profile picture
Buy and hold, common stock investor focused on dividends and on value. Interested in various stocks that are suitable for long-term dividend investment. A Buffett admirer, but not a Buffett cultist, and not quite as creepy as my name implies - though certainly cash-centered!

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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