Hormel Foods Corp's Dividend Analysis
Assessing Hormel Foods Corp's Dividend Sustainability and Growth
Hormel Foods Corp(NYSE:HRL) recently announced a dividend of $0.28 per share, payable on 2024-02-15, with the ex-dividend date set for 2024-01-12. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Hormel Foods Corps dividend performance and assess its sustainability.
What Does Hormel Foods Corp Do?
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Hormel Foods has evolved from a primarily meat-focused company to a diversified branded food company with a broad range of protein-based and other food products. The company's sales are distributed across various channels, with a significant portion coming from U.S. retail, U.S. food service, and international markets. Hormel Foods prides itself on leading brands like Hormel, Spam, and Skippy, many of which dominate their respective categories.
A Glimpse at Hormel Foods Corp's Dividend History
Hormel Foods Corp has a remarkable dividend track record, having consistently paid dividends since 1967 and increasing them annually. This impressive history has earned the company the prestigious title of a Dividend King. Below is a chart depicting the annual Dividends Per Share to visualize historical trends.
Breaking Down Hormel Foods Corp's Dividend Yield and Growth
Hormel Foods Corp boasts a trailing dividend yield of 3.43% and a forward dividend yield of 3.53%, indicating anticipated dividend increases in the coming year. The company has demonstrated a solid dividend growth rate over various time frames, with a 3-year growth rate of 5.80%, a 5-year growth rate of 7.70%, and an impressive 10-year growth rate of 12.40%. The 5-year yield on cost stands at approximately 4.97%, reflecting the company's commitment to rewarding shareholders.
The Sustainability Question: Payout Ratio and Profitability
The dividend payout ratio is a critical indicator of dividend sustainability. Hormel Foods Corp's current ratio of 0.76 may raise concerns regarding long-term sustainability. However, the company's profitability rank is a robust 8 out of 10, supported by a decade of consistent positive net income, which suggests strong profitability and potential to maintain its dividend payments.
Growth Metrics: The Future Outlook
With a growth rank of 8 out of 10, Hormel Foods Corp's prospects look promising. The company's revenue per share growth rate of 7.90% per year outperforms more than half of its global competitors. Despite a modest 3-year EPS growth rate, Hormel Foods Corp still outperforms 39.28% of global companies in this metric. The 5-year EBITDA growth rate also surpasses that of 31.93% of global competitors, further underlining the company's growth potential.
Next Steps
Considering Hormel Foods Corp's consistent dividend payments, robust dividend growth rate, and solid payout ratio, the company stands as an attractive option for value investors focused on dividend income. The strong profitability and growth metrics reinforce the potential for ongoing dividend sustainability. As investors weigh their options, Hormel Foods Corp's track record and financial health suggest it could be a worthy addition to a dividend-focused portfolio. For those seeking to expand their income-generating investments, GuruFocus Premium offers a High Dividend Yield Screener to discover other high-yield opportunities.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
