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Hormel Foods’ Dividend Yield and PE Multiple

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Dividend yield

Hormel Foods’ (HRL) quarterly dividend payout stands at ~$0.19 per share. The company increased its dividend 10% in November 2017. Hormel Foods is a dividend aristocrat. The company has been paying increased dividends for the last 52 years. Hormel Foods started paying dividends in 1928.

Hormel Foods current dividend yield of ~2.0% is based on its closing price of $37.83 on August 16. In comparison, Tyson Foods’ (TSN) current dividend yield stands at 2%, while Sanderson Farms’ (SAFM) dividend yield is 1.2% as of August 16. Campbell Soup’s (CPB) current yield is 3.3%, while Conagra Brands’ (CAG) current yield is 2.3%.

The dividend yield is the cash flow received by an investor for each dollar invested in a company’s stock.

Hormel Foods also has a share repurchase plan in place. In the first half of fiscal 2018, the company repurchased $45 million in stock. Share buybacks give upside to a company’s bottom line.

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Forward PE multiple

Comparing the forward PE valuation multiples for stocks in the same sector helps investors make investment decisions.

On August 16, Hormel Foods was trading at a 12-month forward PE multiple of 20.1x. In contrast, Tyson Foods (TSN), Pilgrim’s Pride (PPC), Campbell Soup (CPB), and Conagra Brands (CAG) had PE ratios of 10.2x, 7.8x, 15.4x, and 16.4x, respectively.

Growth estimates

Analysts expect Hormel Foods’ fiscal 2018 sales to be $9.7 billion—up 5.9% on a YoY (year-over-year) basis. According to the company’s management, in fiscal 2018, the sales are expected to be $9.7 billion–$10.1 billion. For fiscal 2019, analysts expect the sales to increase 3.2% to $10.0 billion.

Analysts expect ConAgra’s sales to rise 1.1% to $8.0 billion in fiscal 2019. Campbell Soup’s fiscal 2018 sales are expected to increase 10.5% to $8.8 billion. Campbell Soup’s fiscal 2019 sales are expected grow 18.0% to $10.3 billion.

Analysts expect Tyson Foods’ fiscal 2018 revenues to increase 5.3% to $40.3 billion. The company’s 2019 revenues are expected to increase 2.6% to $41.4 billion. Analysts expect Pilgrim’s Pride’s fiscal 2018 revenues increase 3.1% to $11.1 billion, while the 2019 revenues are expected to rise 1.6% to $11.3 billion.

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