Workflow
Could Buying Hershey Stock Today Set You Up for Life?
HersheyHershey(US:HSY) The Motley Foolยท2025-02-07 14:45

Group 1: Company Overview - The Hershey Company is one of the largest confectionery companies in the United States, known for its iconic products like Hershey bars and Reese's [1] - Hershey's product portfolio includes not only chocolate brands such as Reese's, Kit Kat, and Cadbury, but also non-chocolate confections like Twizzlers and Jolly Rancher, and salty snacks like Dot's Pretzels and Skinny Pop [2][3] Group 2: Financial Performance - Hershey has a strong dividend track record, having increased its dividend annually for 15 years, with a growth rate of approximately 10% per year over the past decade [3][4] - The current dividend yield stands at 3.6%, which is near the highest levels in the company's history, indicating a potential buying opportunity for long-term investors [4][5] Group 3: Current Challenges - The primary challenge facing Hershey is the recent surge in cocoa prices, which could negatively impact profit margins starting in 2025 as hedging efforts roll off [6] - Additional concerns include the potential impact of new weight loss drugs and a government shift towards promoting healthier lifestyles, which may affect demand for Hershey's products [8] Group 4: Market Sentiment and Valuation - Despite the challenges, Hershey's business is not expected to face long-term decline, and the stock has fallen 45% since reaching all-time highs in 2023, suggesting it may be undervalued [9] - Traditional valuation metrics, such as price-to-sales and price-to-earnings ratios, indicate that the stock price is currently below its five-year averages, reinforcing the notion of a buying opportunity [9]