In This Article:
Delving Into The Hershey Co's Dividend Dynamics
The Hershey Co (NYSE:HSY) recently announced a dividend of $1.19 per share, payable on 2023-12-15, with the ex-dividend date set for 2023-11-16. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into The Hershey Co's dividend performance and assess its sustainability.
What Does The Hershey Co Do?
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Hershey is a leading confectionery manufacturer in the U.S., boasting a market cap of around $25 billion and commanding approximately 45% of the domestic chocolate market, according to IRI data cited by the company. With a history spanning over 85 years, The Hershey Co's portfolio has grown to include over 100 brands such as Reese's, Kit Kat, Kisses, and Ice Breakers. Although the company's products are available in roughly 80 countries, a significant portion of its sales are generated within the U.S. In recent years, The Hershey Co has expanded into the snack segment, acquiring brands like Amplify Snack Brands, Pirate Brands, and Dot's Pretzels.
A Glimpse at The Hershey Co's Dividend History
The Hershey Co has been a model of consistency in dividend payments, having done so since 1986. The company distributes dividends quarterly and has been increasing its dividend annually since 1997, earning it the prestigious title of a dividend aristocrata testament to its commitment to shareholder returns. The chart below illustrates the annual Dividends Per Share to help track The Hershey Co's historical trends.
Breaking Down The Hershey Co's Dividend Yield and Growth
The Hershey Co currently sports a 12-month trailing dividend yield of 2.19% and a forward dividend yield of 2.43%. This indicates an anticipated increase in dividend payments over the next year. Over the past three years, The Hershey Co's dividend has grown by an average of 9.00% annually. This growth rate has slightly dipped to 8.30% over a five-year period, while the decade-long annual growth rate stands at 8.60%. The 5-year yield on cost for The Hershey Co stock is currently approximately 3.26%.
The Sustainability Question: Payout Ratio and Profitability
The sustainability of a dividend is often gauged by the company's payout ratio. The Hershey Co's dividend payout ratio is 0.46 as of 2023-09-30, suggesting that nearly half of its earnings are returned to shareholders as dividends. The Hershey Co's profitability rank is 9 out of 10, indicating strong profitability compared to its peers. Consistent positive net income over the past decade further supports its financial health and dividend sustainability.