Opinions
Mike S. Newton, CIM FCSI
Hormel Foods Corp
HRL-N
TOP PICK
Jun 08, 2016
$34.540
Stock price when the opinion was issued
food services
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COMMENT
It's always been a good company due to their ability to allocate capital appropriately. They were struggling before due to pork prices for SPAM. They're also in the spreads business like Skippy's. 5 year dividend growth is 16%. If they continue to keep margins up, it is a good company.
food services
DON'T BUY
Is up 13% for the past year. They make Spam, Planter's Peanuts and other packaged food, an industry that has held up better than the market. Hormel just released its quarter and it was mixed: 51 cents EPS vs. expected 50 cents, lower than expected sales which worries him, a weak 2023 forecast because of a volatile, high-cost environment.
food services
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This owns about 30 brands including Skippy peanut butter. They are getting into the healthier food. It came on his radar screen because of its really long ascent, a very low volatile name. It was up about 500% for about 10 years and the dividend rose 300%. Then it had a big pull back of about 25%. They reported and actually beat earnings 2 weeks ago. The street turned on them. Dividend yield of 1.68%.