Friday, August 1, 2014

Hershey (HSY) Dividend Stock Analysis

The Hershey Company (HSY), together with its subsidiaries, manufactures, markets, distributes, and sells chocolate and sugar confectionery products, pantry items, and gum and mint refreshment products. The company has paid dividends since 1930 and has managed to increase them for 5 years in a row. Prior to the dividend freeze in 2009, the company was a dividend champion which had managed to raise dividends for 34 years in a row.

The company’s latest dividend increase was announced in July 2014 when the Board of Directors approved a 10.30% increase in the quarterly dividend to 53.50 cents /share. The company’s peer group includes Mondelez International (MDLZ), Nestle (NSRGY) and Mars. Hershey is one of the five world class dividend companies I plan to buy during the next bear market.

Over the past decade this dividend growth stock has delivered an annualized total return of 10.70% to its shareholders.

Please check the rest of the article on Seeking Alpha.

Full Disclosure: Long NSRGY and MDLZ and a put on HSY

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  1. DGI,

    HSY never seems cheap. I wanted to see what it had done thru the years so I went back thru the 10Qs for HSY from '92 on. I figured the *absolute best* yield for the quarter based on the lowest price listed. The median value of that set is 2.23%. The max was 3.31% in '94Q3. Anything over 2.75% seems really cheap historically, and 3%+ is a steal.

    I think on a yield basis looking backwards that HSY shares seem at least reasonable here around 2.4%.


    1. Agreed. It's at the high end of reasonable, and I intend to start nibbling in the coming week, in the hopes the price lowers even further in the future.

  2. Ty very much for the info. on HSY. I love your website I am on it everyday after work. I can't wait to read it and I really appreciate that I can find fellow investors here.

  3. Darn HSY went up over a dollar today. I want it to go lower so I can buy a big order instead of just a few shares every time it dips.

  4. DGI,
    First, I didn't know that you wrote for SA. I had to register to read your article which I never would have done otherwise.

    Second, I have been accumulating HSY of late even with the high valuation. I concluded (like Anon) that the stock is never cheap and that it is reasonable at current levels.

  5. Ty. I am sold on v and I am going to get in when it takes a big dip down. I don't see anything on ice does anyone know if it would be a good buy on a dip?

  6. Hey DGI,
    I took a good look at HSY today and I noticed that the price is closer to the 52 Week of $87.88. P/E is a little high at 24.34. Another thing to that HSY has been growing dividend for 4 years. I might acquire a small position here because I feel like it's a great buying opportunity. I don't see the price dipping much more. In 6 months the price has dropped -10.36%. Might as well put HSY on the clearance rack.

  7. Hello Dividend Mongrel good idea I too am buying more at this price I hope I can get in before it goes to $90 but I am not buying a lot I am waiting for the next big down turn to stock up on stocks.

  8. First off, thank you for the write up and your thoughts on HSY. Obviously a great company to consider having a position in. The only thing I wonder, though, is with so many other great companies, and with the option you have to simply increase your position in one of your many other investments, why not just forget about HSY until the value really grabs you? If it never seems to do so, then that's no harm no foul, however, if you buy into HSY with hesitation and uncertainty on whether or not you truly feel comfortable making the purchase then it will always be a sore ticker to look at.

    If you wanted to have the position because you wanted the diversity in your portfolio that would be one thing, but I'm sure you have a wonderfully diverse portfolio! It appears, from the outside in, that you have more of an emotional desire to want HSY moreso than a desire to have HSY based on analytical attractiveness of the stock/share price.

    Always a pleasure reading through your blog :)

  9. I haven't evaluated this stock yet but thanks to this analysis I will wait for it to come down as well. Thanks DGI.


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