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Hormel Foods Declared Quarterly Dividend of 14.5 Cents per Share

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Jun. 1 2016, Updated 6:05 a.m. ET

Price movement of Hormel Foods

Hormel Foods (HRL) has a market cap of $18.7 billion. It fell by 0.20% to close at $34.80 per share on May 24, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -10.3%, -8.2%, and -11.3%, respectively, on the same day.

This means that HRL is trading 9.2% below its 20-day moving average, 13.9% below its 50-day moving average, and 5.8% below its 200-day moving average.

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Related ETFs and peers

The Fidelity MSCI Consumer Staples ETF (FSTA) invests 0.63% of its holdings in Hormel Foods. The ETF tracks a market-cap-weighted index of stocks in the US consumer staples sector. The YTD price movement of FSTA was 4.0% on May 24, 2016.

The SPDR S&P 500 ETF (SPY) invests 0.07% of its holdings in Hormel Foods. The ETF tracks a market-cap-weighted index of US large- and mid-cap stocks selected by the S&P Committee.

The market caps of Hormel Foods’s competitors are as follows:

  • Tyson Foods (TSN) — $24.2 billion
  • ConAgra Foods (CAG) — $19.6 billion

Hormel Foods declared dividend

Hormel Foods has declared a quarterly dividend of 14.5 cents per share on its common stock. The dividend will be paid on August 15, 2016, to shareholders of record at the close of business on July 18, 2016.

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Hormel Foods’ fiscal 2Q16

Hormel Foods reported fiscal 2Q16 net sales of $2.3 billion, a rise of 0.92% compared to net sales of $2.27 billion in fiscal 2Q15.

Sales from HRL’s Grocery Products and Refrigerated Foods segments rose by 1.1% and 6.8%, respectively. Sales from its Jennie-O Turkey Store, Specialty Foods, and International and Other segments fell by 3.5%, 5.2%, and 17.2%, respectively, in fiscal 2Q16 compared to fiscal 2Q15.

The company’s cost of products sold as a percentage of net sales fell by 3.4%, and its operating income rose by 16.6% in fiscal 2Q16 compared to the prior year’s period. It reported a goodwill repair charge of $0.99 million in fiscal 2Q16.

Its net income and EPS (earnings per share) rose to $215.4 million and $0.40, respectively, in fiscal 2Q16, compared to $180.2 million and $0.33, respectively, in fiscal 2Q15.

Hormel’s cash and cash equivalents and inventories rose by 9.4% and 3.4%, respectively, in fiscal 2Q16 compared to fiscal 4Q15. Its current ratio rose to 2.1x, and its debt-to-equity ratio fell to 0.42x in fiscal 2Q16 compared to 1.7x and 0.53x, respectively, in fiscal 4Q15.

Acquisitions

Hormel Foods has entered into a definitive agreement to acquire Justin’s. Justin’s markets spread, squeeze packs, peanut butter cups, and snack packs, and it will operate as a Hormel’s subsidiary in its Grocery Products segment.

Projections

HRL expects EPS in the range of $1.56–$1.60 per share for fiscal 2016 based on its second-quarter results and growth expectations for the second half of the year.

It expects a rise in earnings from Refrigerated Foods and Grocery Products, its Jennie-O Turkey Store, and Specialty Foods.

Now, let’s discuss Sony Corporation.

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