Hormel Foods Boosts Shareholder Value With Dividend Increase

Hormel Foods Corporation HRL remains focused on rewarding shareholders. Keeping on these lines, the global branded food company unveiled a 3% hike to its annual dividend, continuing its impressive streak of 59 consecutive annual dividend increases. This takes the annualized rate to $1.16 per share from the earlier rate of $1.13 per share. The company will pay a quarterly dividend of 29 cents per share on Feb. 18, 2025, to its shareholders of record as of Jan. 13. This marks HRL’s 386th consecutive quarterly dividend payment. This remarkable achievement reflects Hormel Foods' unbroken history of regular dividend payments since becoming a public company in 1928.Hormel Foods currently has a dividend payout of 71.5%, a dividend yield of 3.6% and a free cash flow yield of 5.2%. With an annual free cash flow return on investment of 7.4%, the increased dividend is likely to be sustainable. Dividend payouts are one of the biggest enticements for investors and HRL is committed toward the same. Such shareholder-friendly actions are crucial in attracting long-term investors who prioritize consistent returns.These strategic actions enhance shareholder value and also elevate the stock’s market appeal. By increasing dividends, companies effectively encourage investors to buy or hold their shares. The decision to raise dividends reflects the company’s robust financial position and capacity to generate substantial cash flow, reinforcing its commitment to delivering consistent returns to investors.On its third-quarter 2024 earnings call, HRL stated that its year-to-date cash flow from operations totaled $858 million. The company continues to prioritize its strategic objectives, including consistent dividend growth, reinvestment in business operations, and preserving an investment-grade credit rating.Insights Into HRL's Growth InitiativesHormel Foods is on track with the Transform and Modernize initiative as part of its strategic priorities. The initiative has started to generate tangible results, particularly in improving production efficiency and inventory management. Significant strides were made in the plan and pillars during the third quarter of fiscal 2024, with the company unlocking additional production capacity and achieving cost savings across its network.These operational advancements are helping Hormel Foods optimize its supply chain, ensuring that it remains competitive and cost-efficient in a challenging market environment. The Transform and Modernize initiative is expected to deliver even stronger savings in the fourth quarter, which will bolster the company’s profitability and improve its long-term operational resilience.Hormel Foods continues to benefit from strong demand in its food service segment, achieving its fifth consecutive quarter of year-over-year volume growth in the third quarter of fiscal 2024. The company’s long-standing relationships, innovative solutions and differentiated product portfolio are driving above-industry sales growth, highlighting its strong market position despite broader industry challenges.What Else to Know About HRL?Hormel Foods continues to face significant headwinds from the turkey commodity market, which has negatively impacted overall performance. The production disruption at Hormel Foods’ Planters facility in Suffolk, VA, has also been a notable setback, directly impacting the company’s ability to meet demand for its snack nuts portfolio. This disruption has been impactful throughout the third quarter and is expected to linger into the fourth quarter, bringing uncertainty regarding Hormel Foods’ ability to fully recover from the operational bottlenecks by the end of the fiscal year.Shares HRL have lost 2.8% in the past three months against the industry’s growth of 1.0%.Image Source: Zacks Investment ResearchNonetheless, Hormel Foods’ commitment to innovation and strategic acquisitions have been bolstering its market position. Its Transform and Modernize initiatives further aim to enhance production efficiency and supply-chain management. This Zacks Rank #3 (Hold) company’s strategic initiatives and strong market position provide a foundation for sustained growth in the future.Stocks to ConsiderWe have highlighted three better-ranked stocks from the Consumer Staples sector, namely Ingredion Incorporated INGR, Freshpet FRPT and Pilgrim’s Pride PPC.Ingredion Incorporated manufactures and sells sweeteners, starches, nutrition ingredients and biomaterial solutions derived from wet milling and processing corn and other starch-based materials. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.INGR has a trailing four-quarter earnings surprise of 9.5%, on average. The Zacks Consensus Estimate for Ingredion’s current financial year’s earnings indicates growth of 12.5% from the year-ago reported number.Freshpet, a pet food company, presently carries a Zacks Rank #2 (Buy). FRPT has a trailing four-quarter earnings surprise of 144.5%, on average.The Zacks Consensus Estimate for Freshpet’s current financial-year sales and earnings suggests growth of 27.3% and 224.3%, respectively, from the year-ago period’s reported figure.Pilgrim’s Pride, which produces, processes, markets and distributes fresh, frozen and value-added chicken and pork products, currently carries a Zacks Rank of 2. PPC delivered a positive earnings surprise of 30.9% in the trailing four quarters, on average.The Zacks Consensus Estimate figure for Pilgrim’s Pride’s current financial-year earnings indicates growth of 190.5% from the prior-year reported level.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Hormel Foods Corporation (HRL): Free Stock Analysis Report Freshpet, Inc. (FRPT): Free Stock Analysis Report Pilgrim's Pride Corporation (PPC): Free Stock Analysis Report Ingredion Incorporated (INGR): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks