Dividend King Hormel (NYSE: HRL) is a food maker with a collection of industry-leading brands. Despite recent challenges from inflation, avian flu, a slow COVID-19 recovery in China, and a weak nut market, the company is showing signs of resilience, hinting at a brighter future ahead.
Here are three compelling reasons why dividend growth investors should seriously consider investing in Hormel today.
Seizing the Early Opportunity
Following Hormel’s fiscal first-quarter results in 2024, the stock surged and maintained most of its gains. While still trading around 35% below its 2022 peak, there is considerable upside potential awaiting. If the company continues its strong performance in the upcoming quarters, Wall Street is likely to shift towards a more bullish stance on Hormel.
Furthermore, with Hormel’s dividend yield currently at 3.3%, near its historic highs, the stock remains attractively valued, signaling an opportune moment to make an investment move.
A Legacy of Success
Hormel has established itself as a Dividend King by consistently increasing dividends for 57 consecutive years. This track record, especially during challenging times, underscores the company’s ability to weather storms and deliver long-term growth. While recent dividend growth rates may have moderated due to prevailing headwinds, Hormel’s resilience in the face of adversity speaks volumes about its management’s capabilities.
The key to weathering tough times lies in how a company navigates such challenges. Hormel’s robust dividend growth history indicates the management’s adeptness at steering through difficult periods, warranting confidence in the company’s future prospects.
Temporary Troubles, Long-Term Opportunities
While Hormel grapples with various headwinds concurrently, such as inflationary pressures and supply chain disruptions, each issue is likely transient. For example, although avian flu impacts its turkey business and a slow recovery in China poses challenges, signs of improvement, like volume growth and market share gains, are already emerging.
Just like the ebb and flow of waves, these obstacles are expected to recede over time. Despite the storm, Hormel’s operational agility and market performance indicate resilience and potential opportunities for investors to capitalize on the current discounted stock price.
Take Action Before It’s Too Late
Despite recent trials, Hormel continues to reward dividend investors with consistent dividend growth. As the company rebounds from challenges, the current high yield offers an enticing entry point for investors. Timely action might be prudent as Hormel’s solid performance in the coming quarters could signal an end to its discounted valuation.