Assessing the Upcoming Dividend and Historical Performance of Hormel Foods Corp
Hormel Foods Corp (HRL, Financial) recently announced a dividend of $0.28 per share, payable on 2024-05-15, with the ex-dividend date set for 2024-04-12. 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 Corp's dividend performance and assess its sustainability.
What Does Hormel Foods Corp Do?
Hormel Foods has evolved from its historical meat-centric portfolio to a diversified branded food company. The company's sales channels encompass U.S. retail, which accounts for 64% of fiscal 2023 sales, U.S. food service at 30%, and international markets comprising 6%. Hormel Foods' product mix includes 70% perishable foods and 30% shelf-stable items. Its portfolio of leading brands, such as Hormel, Spam, Jennie-O, Columbus, Applegate, Planters, and Skippy, are often at the forefront of their respective categories.
A Glimpse at Hormel Foods Corp's Dividend History
Hormel Foods Corp has maintained a consistent dividend payment record since 1967, with dividends currently distributed on a quarterly basis. The company's commitment to dividend growth is evident in its status as a dividend king, having increased its dividend annually for over five decades. For investors interested in tracking the company's dividend consistency and growth, Hormel Foods Corp's annual Dividends Per Share history provides valuable insights.
Breaking Down Hormel Foods Corp's Dividend Yield and Growth
Hormel Foods Corp currently boasts a 12-month trailing dividend yield of 3.19% and a forward dividend yield of 3.26%, indicating anticipated dividend increases over the next year. The company's dividend growth rates are also noteworthy: 5.80% over the past three years, 7.70% annually over five years, and an impressive 12.40% over the past decade. Consequently, the 5-year yield on cost for Hormel Foods Corp stock is approximately 4.62%.
The Sustainability Question: Payout Ratio and Profitability
The dividend payout ratio, which sits at 0.68 as of 2024-01-31, is a critical metric for evaluating dividend sustainability. This figure suggests that Hormel Foods Corp retains a substantial portion of its earnings, which is beneficial for funding future growth and buffering against economic downturns. Additionally, Hormel Foods Corp's profitability rank of 7 out of 10, as per GuruFocus, underscores the company's strong earnings potential relative to its peers. The consistent positive net income over the past decade further solidifies Hormel Foods Corp's robust profitability.
Growth Metrics: The Future Outlook
Hormel Foods Corp's growth rank of 7 out of 10 signals a positive growth trajectory. The company's revenue per share and 3-year revenue growth rate of 7.90% per year surpass that of approximately 51.99% of global competitors, indicating a solid revenue model. Furthermore, Hormel Foods Corp's 3-year EPS growth rate and 5-year EBITDA growth rate, despite being negative, still outperform a significant portion of global competitors. These growth metrics are essential for the sustainability of dividends in the long term.
Investor Considerations and Next Steps
In conclusion, Hormel Foods Corp's dividend payments, consistent growth in dividends per share, reasonable payout ratio, strong profitability, and growth metrics make it an attractive option for value investors focused on dividend income. While past performance is not always indicative of future results, the data suggests Hormel Foods Corp is well-positioned to maintain its dividend king status. Investors seeking high-dividend yield opportunities may find Hormel Foods Corp to be a compelling choice and can further explore such stocks using the GuruFocus High Dividend Yield Screener.
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.
