Candy Giant Hershey Offers Growth, Income


For consumers,Hershey ( HSY ) is best known for sweet indulgences such as Reese's Peanut Butter Cups, Kit Kat bars and Almond Joy candies. For investors, the company offers sweet, steady growth and a competitive yield.

Since 2000, the candy giant has delivered higher earnings in all but two years. Nearly all of its gains have been in double digits. Its only two blemishes in recent years were in 2007 and 2008. Profit fell 12% and 10%, respectively during tough economic times.

Last month, Hershey beat expectations with a 9% rise in second-quarter earnings. Sales rose 7%. Results were boosted by strong demand for its Hershey's brand chocolate bars, Reese's products and Ice Breakers mints.

The company also lifted its full-year earnings growth target to about 14% from 12%. Currently analysts polled by Thomson Reuters see Hershey's bottom line rising 15% to $3.71 a share.

Also with its Q2 results, Hershey lifted its quarterly dividend by 15.5% to 48.5 cents a share. That's its third hike since early 2012. Its dividend has grown 28% over the trio of raises. Hershey's next dividend will be paid Sept. 13 to shareholders of record Aug. 23.

On an annual basis, Hershey pays $1.94 a share, giving it a yield of about 2%. It has the second highest yield among the four dividend-paying stocks in the Food-Confectionery group.Rocky Mountain Chocolate Factory ( RMCF ) offers the highest yield. But Hershey has a higher Composite Rating.

Hershey is at an all-time high, but extended from a 92.09 buy point from a flat base cleared July 15. The stock has been on a roll lately. Last week, it logged a sixth straight weekly gain. It climbed further so far this week.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: HSY , RMCF

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