Dividend increase Hormel Foods

Dividend increase Hormel Foods

At the 21st of November the board of directors of Hormel Foods decided to increase the quarterly dividend from $ 0,17 to $ 0,1875 per quarter. This means an increase of $ 0,07 per share per year which translates to a 10,3% increase. The new dividend starts with the next dividend payment in February of 2018. This is the 52nd consecutive annual increase.

 

The Pursuit

Since I have 55 shares this increase means that my yearly dividend for Hormel Foods is now $ 41,25, up from $ 37,40 or a $ 3,85 increase in yearly dividends. After taxes I will receive $ 35,06 per year from the company.

This increase means Hormel Foods currently yields 2,17% and my yield on cost rises to 2,41%.

 

Conclusion

The raise of Hormel Foods is smaller than the raise it paid in the last couple of years. However, it’s clear that food stocks are experiencing a rough time. Since I believe those challenges will be temporary that is actually also why I bought the stock.

Looking at the challenges the company compared to the dividend increase I believe that it is very solid and investors can be happy with it. I expect 2 additional years of increases from this size. After that maybe a bit bigger increases if the company finds growth again. But who knows, time will tell. 3 years is a long time to look into the future.

For now I made some nice capital gains in a small amount of time and I received a great dividend increase. So I am happy with the recent performance of the stock!

Do you own Hormel Foods? What do you think of the stock and the problems it is facing this year? And most important, how do you see the future of the company?

2 thoughts on “Dividend increase Hormel Foods”

  1. Sure the raise is smaller than previous years, but a 10% increase is pretty nice given dividend increases I have been seeing elsewhere in the investing community. I don’t own HRL, but I’m excited for all of those that do.

    Bert

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