Hormel Foods (HRL) is a boring company that offers an exciting dividend to its shareholders.
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Hormel is best-known for making Spam, the famous meat in a can. A going concern for 135 years, Hormel’s other products include Skippy peanut butter and Planters nuts. The company and its stock are largely unremarkable, with one exception: the dividend.
HRL stock currently pays a quarterly dividend of $0.29, giving it a hefty yield of nearly 6%. Hormel is also a Dividend King, a title reserved for company’s that have increased their distribution to shareholders for 50 consecutive years or longer. Hormel has raised its dividend for 60 consecutive years, a streak that’s nearly unmatched on Wall Street.
HRL Stock’s Performance
While the dividend increases and yield are impressive, they partly make-up for the lackluster performance of HRL stock. Stagnating growth and a lack of new products have led Hormel’s stock to languish in recent years, and the declining share price has helped push the dividend yield higher.
HRL stock is down 55% over the past five years, including a 30% decline in the last 12 months. The shares last peaked in 2022 during the Covid-19 pandemic when people sheltering-in-place were loading up on the company’s Spam, peanut butter, and other consumer staples. Can the stock stage a comeback? It’s hard to say. But while shareholders wait, they can comfort themselves with Hormel’s dividend payment.
Is HRL Stock a Buy?
Hormel’s stock has a consensus Hold rating among four Wall Street analysts. That rating is based on one Buy and three Hold recommendations issued in the last three months. The average HRL price target of $26.75 implies 28% upside from current levels.
