1 Dividend Growth Stock Down 25% to Buy Right Now

Core Viewpoint - Hershey's stock has dropped over 25% due to various challenges, but this presents a potential opportunity for long-term investors willing to look beyond short-term issues [1] Group 1: Cocoa Price Inflation - Rising cocoa prices, a key ingredient for Hershey's products, are a significant concern as they have not started to decline materially [2] - The cocoa production sector is facing issues such as lack of investment, aging trees, and crop illnesses, contributing to sustained high prices [2] Group 2: Distribution System Update - Hershey's recent update to its distribution system has temporarily affected earnings due to inventory buildup prior to the switch, which is now being worked down [3] - This transition is expected to normalize operations and order flow in the future [6] Group 3: Market Trends and Consumer Behavior - A shift in consumer preferences towards more filling snacks has led to a slowdown in popcorn sales, which was previously a growth driver for Hershey [3] - The emergence of new weight loss drugs poses a potential long-term risk to confectionery demand, although adherence to such medications may vary among consumers [4][6] Group 4: Dividend Growth and Investment Potential - Despite current challenges, Hershey's dividend yield is near its highest levels in the past decade at 2.7%, with a 10% annualized dividend growth over the last 10 years [7] - The recent dividend increase of nearly 15% indicates confidence in the company's financial health and future prospects [7] - Current price-to-sales and price-to-earnings ratios are below their five-year averages, suggesting Hershey may also be considered a value stock [8]