Yahoo Finance The Hershey Co's Dividend Analysis
Exploring The Hershey Co's Dividend Sustainability and Growth
Introduction to The Hershey Co's Upcoming Dividend
The Hershey Co (NYSE:HSY) recently announced a dividend of $1.37 per share, payable on 2024-06-14, with the ex-dividend date set for 2024-05-16. 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 The Hershey Co's dividend performance and assess its sustainability.
Overview of The Hershey Co
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Hershey is a leading confectionery manufacturer in the US, with a market cap of around $25 billion. It controls approximately 36% of the domestic chocolate market. Beyond its famous Hershey's brand, the company's portfolio includes over 100 brands like Reese's, Kit Kat, Kisses, and Ice Breakers. Hershey's products are distributed in about 80 countries, although a significant majority of its sales come from the US. Recent acquisitions such as Amplify Snack Brands and Dot's Pretzels illustrate Hershey's strategy to diversify beyond traditional confectionery.
A Look at The Hershey Co's Dividend History
The Hershey Co has demonstrated a strong commitment to returning value to shareholders, maintaining a consistent dividend payment record since 1986 and increasing its dividend each year since 1997. This consistency qualifies it as a dividend aristocrat, a status reserved for companies with at least 27 consecutive years of dividend increases.
Breaking Down The Hershey Co's Dividend Yield and Growth
The Hershey Co currently boasts a 12-month trailing dividend yield of 2.32% and a forward dividend yield of 2.65%, indicating expectations of increased dividend payments over the next 12 months. Over the past three years, The Hershey Co's annual dividend growth rate was 12.20%, which slightly decelerates to 9.80% over a five-year period, and further to 8.60% over the past decade. The 5-year yield on cost for The Hershey Co stock is approximately 3.70%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
The dividend payout ratio, which currently stands at 0.45 for The Hershey Co, is crucial for assessing the sustainability of dividend payments. This ratio indicates that The Hershey Co retains a substantial portion of its earnings for growth and operational needs. The company's profitability rank is 9 out of 10, reflecting strong earnings relative to its peers and a consistent track record of positive net income over the past decade.
Growth Metrics and Future Outlook
The Hershey Co's growth prospects are solid, with a growth rank of 9 out of 10. Its revenue per share and 3-year revenue growth rate of 11.80% annually outperform approximately 65.61% of global competitors. Earnings per Share (EPS) growth over the past three years averages 12.50% annually, surpassing about 57.87% of global competitors. Furthermore, The Hershey Co's 5-year EBITDA growth rate of 12.40% also outperforms approximately 63.44% of global competitors, indicating robust financial health and growth potential.
Conclusion: The Sustainability of The Hershey Co's Dividends
The Hershey Co's consistent dividend growth, prudent payout ratios, and strong profitability and growth metrics suggest that its dividends are sustainable in the long term. Investors seeking dividend consistency and growth, coupled with solid financial health, may find The Hershey Co an attractive option. For those looking to explore further, GuruFocus Premium offers tools like the High Dividend Yield Screener to discover similar investment 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.
