- By Mrinalini Chaudhuri

Hormel Foods Corporation (HRL), based in Austin, Minnesota, is a multinational manufacturer and marketer of consumer-branded food and meat products, many of which are among the best known and trusted in the food industry. The company leverages its extensive expertise, innovation and high competencies in pork and turkey processing and marketing to bring branded, value-added products to the global marketplace.

• Warning! GuruFocus has detected 2 Warning Sign with HRL. Click here to check it out.

• HRL 15-Year Financial Data

• The intrinsic value of HRL

• Peter Lynch Chart of HRL

It is primarily engaged in the production of a variety of meat and food products, many of which are among the best known and trusted in the food industry, and the marketing of those products throughout the U.S. and internationally.

The company recently achieved record third quarter results and raised its full year guidance. This quarter marks the 13th consecutive quarter of record earnings. Adding to this, three out of five segments reported volume, sales and earnings growth.

Strong third quarter

The company reported record diluted EPS of 36 cents, which marked a 33% increase from the prior year quarter.

Net earnings were a record $195.7 million, which marked an increase of 33% from $146.9 million in the prior year quarter.

Dollar sales were a record $2.3 billion during the quarter, up 5% from the prior year quarter. Volume increased by 1%.

Refrigerated Foods operating profit increased by 24% and volume increased by 3%. Jennie-O Turkey Store operating profit increased by 59% and volume increased by 29%. International & Other operating profit increased by 5% and volume increased by 10%. Grocery Products operating profit was flat during the quarter and volume increased by 1%.

Dividends

On August 15 the company paid its quarterly dividend at the annual rate of 58 cents.

Expectations for 2016

Strong attributes of the company:

• Strong earnings guidance.

• Dividend hikes.

• Growth in Muscle Milk sales.

• Boasts of a diversified portfolio.

• Strong balance sheet.

• Strong cashflow generation.

Focus:

• Incremental growth through acquisitions.

• It is taking notable progress toward the 2020 environmental goals.

• It is also working on several sodium reduction and clean label initiatives to continue to offer products that meet emerging consumer trends.

• Innovation and continuous improvement.

Conclusion

This company is a dividend king with a history of 50 years of dividend growth.

It posted a strong third quarter and is poised to grow. It may benefit from the acquisition of Applegate Farm (nation's leading branded natural and organic meat company). This acquisition allows the company to expand the breadth of its protein offerings. It is continuing to make significant strides. I think adding this company is going to create shareholder returns.

Disclosure: I do not hold any position in the company.

This article first appeared on GuruFocus.

• Warning! GuruFocus has detected 2 Warning Sign with HRL. Click here to check it out.

• HRL 15-Year Financial Data

• The intrinsic value of HRL

• Peter Lynch Chart of HRL