(HRL) Hormel Foods Corporation – Annual Dividend was Raised 10.5%
Hormel Foods Corporation (HRL), the manufacturer of food and meat products including SPAM, Hormel and Dinty Moore brands, recently raised its dividend for the 44th straight year. The company has been paying a dividend, without interruption, since it went public in 1928.
The annual dividend was raised 10.5% to 84 cents from 76 cents per share in 2009.
On Nov 24, Hormel also surprised on the fourth quarter Zacks Consensus Estimate by 13.24%. Earnings per share rose 54% to 77 cents from 50 cents in the year ago period. The Zacks Consensus called for 68 cents. For fiscal 2009, earnings per share climbed 22% to $2.53 from $2.08 per share.
Sales and volumes both declined, however. Sales fell 10% to $1.68 billion while volumes sank 3% compared to a year ago. The sales decline was due to lower commodity costs which was reflected in lower pricing in the pork and turkey segments as well as a continued weak consumer environment.
On the positive side, the refrigerated foods segment led the quarter as volumes rose 1%.
Outlook for Fiscal 2010
The company provided a 2010 outlook of earnings per share in the range of $2.63 to $2.73.
The analysts are still revising their estimates but the full year Zacks Consensus has already jumped 4 cents to $2.63, which is at the lower end of the company’s guidance range. 3 out of 10 covering analysts raised estimates in the last week.
Value Fundamentals
Hormel is now a Zacks #2 Rank (buy) stock. It is trading with a forward P/E of 14.5. Its price-to-book ratio is 2.36. The company has a solid 1-year return on equity (ROE) of 14.73%.
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.
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