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Hormel Foods (HRL) Rewards Investors With Dividend Hike
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Hormel Foods Corporation (HRL - Free Report) is focused on enhancing shareholders’ returns. The global branded food company hiked its annual dividend by 3%. This takes the annualized rate to $1.13 per share from the earlier rate of $1.10 per share. The hike marks the company’s 58th consecutive annual dividend increase.
The company will pay a quarterly dividend of 28.25 cents per share on Feb 15, 2024, to shareholders record as of Jan 16, 2024. This marks HRL’s 382nd consecutive quarterly dividend payment.
Hormel Foods currently has a dividend payout of 64%, a dividend yield of 3.4% and a free cash flow yield of 4.8%. With an annual free cash flow return on investment of 7.1%, the increased dividend is likely to be sustainable. Dividend payouts are one of the biggest enticements for investors and HRL is committed to boosting shareholders’ value.
Image Source: Zacks Investment Research
What Else Should You Know?
Hormel Foods intends to strengthen its business on the back of strategic acquisitions. The company acquired a minority stake in Indonesia-based food and beverage company PT Garudafood Putra Putri Jaya Tbk in fourth-quarter fiscal 2022. The move expands its presence in Indonesia and Southeast Asia. On Jun 7, 2021, the company acquired the Planters snacking portfolio. The buyout includes the Planters, NUT-rition, Planters Cheez Balls and Corn Nuts brands and three manufacturing units.
Hormel Foods is on track with strategic growth drives, including the Go Forward initiative. Management remains focused on initiatives like One Supply Chain, Project Orion and Digital Experience Group to accelerate growth.
Hurdles on the Way
The Zacks Rank #4 (Sell) company continues to operate in a volatile, complex and high-cost environment. The company’s adjusted operating income was $286.8 million in the third quarter of fiscal 2023, 1.5% lower than last year. The downside can be attributed to supply-chain disruption because of the third-party logistics provider shutdown. The company saw impacts from shortages, additional logistic costs and escalated levels of distressed inventory.
Management expects to witness continued weakness in the International segment, alongside earnings pressure from heightened competition in the Retail business in 2023. The company also expects overall consumer spending to remain under pressure in the United States due to the resumption of student loan payments.
Hormel Foods expects fiscal 2023 net sales to be down 4% to flat year over year, reflecting soft to-date performance and expectations of raw material input costs in the fiscal fourth quarter. Fiscal 2023 adjusted earnings per share (EPS) are expected to be $1.61-$1.67, down from $1.82 reported in the year-ago period.
The company’s shares have slumped 16.5% in the past three months compared with the industry’s 11.6% decline.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings suggests growth of 28.3% and 24.8%, respectively, from the year-ago reported numbers.
The Kraft Heinz Company (KHC - Free Report) , a food and beverage product company, currently carries a Zacks Rank #2 (Buy). KHC has a trailing four-quarter earnings surprise of 9.9% on average.
The Zacks Consensus Estimate for Kraft Heinz’s current fiscal year sales suggests growth of 1.2% from the corresponding year-ago reported figure.
Post Holdings (POST - Free Report) , operating as a cosmetic and skin care products provider, currently carries a Zacks Rank of 2. POST has a trailing four-quarter earnings surprise of 59.2% on average.
The Zacks Consensus Estimate for Post Holdings’ current financial-year sales suggests growth of 10.9% from the prior-year reported number.
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Hormel Foods (HRL) Rewards Investors With Dividend Hike
Hormel Foods Corporation (HRL - Free Report) is focused on enhancing shareholders’ returns. The global branded food company hiked its annual dividend by 3%. This takes the annualized rate to $1.13 per share from the earlier rate of $1.10 per share. The hike marks the company’s 58th consecutive annual dividend increase.
The company will pay a quarterly dividend of 28.25 cents per share on Feb 15, 2024, to shareholders record as of Jan 16, 2024. This marks HRL’s 382nd consecutive quarterly dividend payment.
Hormel Foods currently has a dividend payout of 64%, a dividend yield of 3.4% and a free cash flow yield of 4.8%. With an annual free cash flow return on investment of 7.1%, the increased dividend is likely to be sustainable. Dividend payouts are one of the biggest enticements for investors and HRL is committed to boosting shareholders’ value.
Image Source: Zacks Investment Research
What Else Should You Know?
Hormel Foods intends to strengthen its business on the back of strategic acquisitions. The company acquired a minority stake in Indonesia-based food and beverage company PT Garudafood Putra Putri Jaya Tbk in fourth-quarter fiscal 2022. The move expands its presence in Indonesia and Southeast Asia. On Jun 7, 2021, the company acquired the Planters snacking portfolio. The buyout includes the Planters, NUT-rition, Planters Cheez Balls and Corn Nuts brands and three manufacturing units.
Hormel Foods is on track with strategic growth drives, including the Go Forward initiative. Management remains focused on initiatives like One Supply Chain, Project Orion and Digital Experience Group to accelerate growth.
Hurdles on the Way
The Zacks Rank #4 (Sell) company continues to operate in a volatile, complex and high-cost environment. The company’s adjusted operating income was $286.8 million in the third quarter of fiscal 2023, 1.5% lower than last year. The downside can be attributed to supply-chain disruption because of the third-party logistics provider shutdown. The company saw impacts from shortages, additional logistic costs and escalated levels of distressed inventory.
Management expects to witness continued weakness in the International segment, alongside earnings pressure from heightened competition in the Retail business in 2023. The company also expects overall consumer spending to remain under pressure in the United States due to the resumption of student loan payments.
Hormel Foods expects fiscal 2023 net sales to be down 4% to flat year over year, reflecting soft to-date performance and expectations of raw material input costs in the fiscal fourth quarter. Fiscal 2023 adjusted earnings per share (EPS) are expected to be $1.61-$1.67, down from $1.82 reported in the year-ago period.
The company’s shares have slumped 16.5% in the past three months compared with the industry’s 11.6% decline.
3 Solid Picks
Lamb Weston (LW - Free Report) , which offers frozen potato products, sports a Zacks Rank #1. LW has a trailing four-quarter earnings surprise of 46.2% on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings suggests growth of 28.3% and 24.8%, respectively, from the year-ago reported numbers.
The Kraft Heinz Company (KHC - Free Report) , a food and beverage product company, currently carries a Zacks Rank #2 (Buy). KHC has a trailing four-quarter earnings surprise of 9.9% on average.
The Zacks Consensus Estimate for Kraft Heinz’s current fiscal year sales suggests growth of 1.2% from the corresponding year-ago reported figure.
Post Holdings (POST - Free Report) , operating as a cosmetic and skin care products provider, currently carries a Zacks Rank of 2. POST has a trailing four-quarter earnings surprise of 59.2% on average.
The Zacks Consensus Estimate for Post Holdings’ current financial-year sales suggests growth of 10.9% from the prior-year reported number.