Do you know Hormel Foods (WKN: 850875) as a dividend stock? Behind the stake is a noble and even royal motive. In addition to a defense food company that specializes in strong consumer products within the United States. Several products rank first in terms of consumer interest, including SPAM breakfast meat.
Let’s revisit that later. In any case, there are three reasons why Hormel Foods is a top dividend stock. Ownership structure, earnings growth and defensive class are the relevant aspects for me.
Hormel Foods: Highest Dividend Stock Based On Ownership
First of all, Hormel Foods is at least a private dividend stock to me because the ownership structure is so clear. And above all it is controlled by one party. From the owner’s perspective, the Hormel Corporation is behind the American Food Company. This non-profit is now the largest beneficiary of a billion dollar empire.
But why do the owners of Hormel Foods make the highest-paying stock? The simple reason: Hormel Corporation in particular needs one thing: reliable revenue streams. As a foundation, it has to take on its own costs and continually refinance its charitable projects. This means that decisions by owners and major shareholders must be made with an eye on the long term, but also with the preservation of current operational success.
This is a special situation, especially since the foundation claims to own about 46.8% of the voting rights. In any case, such a large investor must have a say in the interests involved. A clear plus for us as smaller investors.
Steady earnings growth
However, Hormel Foods is also the highest paying stock from a dividend perspective. Management regularly increases earnings per share and is also supposed to address the concerns of the owners and the organisation. Recently, by the way, it’s up another 6%, which pays a dividend of $1.10 per share annually.
I dare say this should remain the case in the future. Hormel Foods isn’t just a dividend king with 57 consecutive dividend increases. No, but management also ensures the needs of the enterprise. So I consider the current dividend yield of 2.40% to be very safe. Especially as a company-oriented, timeless and high-quality company forms the basis for payments.
Hormel Foods: Powerful products and products
Finally, Hormel Foods is a top stock dividend for me because their approach to food is simply timeless. The group owns not only SPAM breakfast meats, but also 40 of the best brands and best products in the United States in their respective product categories. This means that loyal shoppers will reach for the products because of the quality, not just because they enjoy eating something of the type of product (like salami).
This is exactly what gives Hormel Foods the necessary pricing power. So I think investing, especially now with a dividend yield of 2.4%, is not unattractive. At least if you are looking for a defensive class and want to stay with this company for the long term (eg Hormel Foundation).
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Vincent owns shares of Hormel Foods. The Motley Fool does not own any of the shares mentioned.
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