A Sweet Investment Opportunity
When it comes to investing in the stock market, I’m always on the lookout for companies with a strong track record and a promising future. One such company that has caught my attention is Hershey (NYSE: HSY), a leading confectionery brand that has been a staple in many households for generations.
A Business Model That’s Hard to Resist
At its core, Hershey is a snack-focused company, with a portfolio of beloved brands that include Reese’s peanut butter cups and Hershey’s chocolates. While some might view the company’s reliance on snacks as a negative, I see it as a positive. After all, who can resist the allure of a sweet treat every now and then? Moreover, I believe it’s highly unlikely that the government will regulate chocolate out of existence, given its widespread popularity and affordability.
A Unique Advantage
One of the key factors that sets Hershey apart from its peers is the presence of The Hershey Trust, a not-for-profit organization that controls most of the company’s voting rights. The Trust uses its dividend income to fund its philanthropic efforts, which aligns perfectly with my own investment goals. This unique arrangement provides an added layer of stability and ensures that the company remains focused on its long-term objectives.
Navigating Commodity Volatility
Of course, no company is immune to external factors, and Hershey is no exception. The current supply-demand imbalance in the cocoa market has driven prices to historic highs, posing a significant challenge for the company. However, Hershey has a proven track record of navigating commodity volatility, and I’m confident that it will find ways to pass on the higher costs to consumers without sacrificing its competitive edge.
A Dividend Powerhouse
One of the most attractive aspects of Hershey’s stock is its dividend yield, which currently stands at a near-historic high of 3.5%. The company has a long history of paying consistent dividends, and I believe that this trend will continue in the years to come. In fact, the last dividend increase was a whopping 15%, demonstrating management’s confidence in the company’s future prospects.
A Buying Opportunity
With Hershey’s stock price having fallen over 40% from its all-time highs, I believe that now is an excellent time to jump aboard. The company’s fundamentally attractive business, combined with its historically high dividend yield, makes it an attractive option for long-term investors. If you’re looking for a reliable dividend payer with upside potential, Hershey is definitely worth considering.
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