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Yahoo
29-05-2025
- Business
- Yahoo
Should You Forget Coca-Cola? Why You Might Want to Buy This Unstoppable Growth Stock Instead.
Coca-Cola is one of the dominant consumer staples companies. But it's not the only one, and its stock is looking a little expensive today. Another famous name -- Hershey -- offers a high yield and attractive valuation. 10 stocks we like better than Coca-Cola › Coca-Cola (NYSE: KO) is a great business, but that doesn't mean it is a great stock to own. In fact, to paraphrase famous value investor Benjamin Graham, overpaying for a great company can turn it into a bad investment. If you are considering this consumer staples giant, here's why you might be better off buying something completely different. Coca-Cola makes beverages. In fact, it is one of the largest beverage makers on the planet, with a distribution network that is top-notch, a powerful marketing team, and strong R&D skills. As a business, it is highly attractive. But what about as an investment? Right now, Coca-Cola's price-to-sales, price-to-earnings, and price-to-book value ratios are all above their five-year averages. It is hard to escape the fact that the stock is expensive today. If you bought it and held it for long enough, you'd probably end up OK, but overpaying could lead to some near-term trepidation if the stock's valuation reverts back toward the mean. If you are seeking a stock that looks attractively priced, you'll be better off with The Hershey Company (NYSE: HSY). Despite material cost headwinds, this confection maker is still growing its business. That speaks to a potentially bright future if its valuation metrics return to their longer-term averages. Starting with the stock price, Hershey's shares have fallen around 45% from the all-time high they reached in 2023. That has pushed the dividend yield up to a historically high 3.6%. The stock's price-to-sales, price-to-earnings, and price-to-book value ratios are all below their five-year averages. Essentially, Hershey looks cheap while Coca-Cola looks expensive. There's a reason, of course. Hershey is facing a severe cost headwind thanks to the massive increase in the price of cocoa. Although revenue is expected to grow at least 2% in 2025, the company's adjusted earnings are projected to fall in the mid-30% range. Investors are reacting accordingly and selling the stock. But that's an opportunity for long-term growth investors. Indeed, the current headwinds haven't stopped Hershey from growing its business. It has recently added the Sour Strips brand to its confection operation and has agreed to buy LesserEvil, which will expand its presence in the salty snack category. In other words, this food maker is taking the long view even as it deals with adversity. That, plus a strong balance sheet, should reassure investors that the currently struggling business will rebound once the cocoa market becomes more rational. To be fair, cocoa comes from trees, so it could take a little while for commodity prices to rationalize. There's probably no rush to buy Hershey's stock. However, acting now gets you in the door and allows you to collect a historically high yield while you await better days. And you'll get to benefit from the growth via acquisition that's being hidden by the market's cocoa concerns. If you wait too long, meanwhile, you could miss out entirely on this unstoppable growth stock. It's probably better to be a little early than miss out because you wait too long. Before you buy stock in Coca-Cola, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Coca-Cola wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,761!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $826,263!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 170% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Reuben Gregg Brewer has positions in Hershey. The Motley Fool has positions in and recommends Hershey. The Motley Fool has a disclosure policy. Should You Forget Coca-Cola? Why You Might Want to Buy This Unstoppable Growth Stock Instead. was originally published by The Motley Fool
Yahoo
29-05-2025
- Business
- Yahoo
Should You Forget Coca-Cola? Why You Might Want to Buy This Unstoppable Growth Stock Instead.
Coca-Cola is one of the dominant consumer staples companies. But it's not the only one, and its stock is looking a little expensive today. Another famous name -- Hershey -- offers a high yield and attractive valuation. 10 stocks we like better than Coca-Cola › Coca-Cola (NYSE: KO) is a great business, but that doesn't mean it is a great stock to own. In fact, to paraphrase famous value investor Benjamin Graham, overpaying for a great company can turn it into a bad investment. If you are considering this consumer staples giant, here's why you might be better off buying something completely different. Coca-Cola makes beverages. In fact, it is one of the largest beverage makers on the planet, with a distribution network that is top-notch, a powerful marketing team, and strong R&D skills. As a business, it is highly attractive. But what about as an investment? Right now, Coca-Cola's price-to-sales, price-to-earnings, and price-to-book value ratios are all above their five-year averages. It is hard to escape the fact that the stock is expensive today. If you bought it and held it for long enough, you'd probably end up OK, but overpaying could lead to some near-term trepidation if the stock's valuation reverts back toward the mean. If you are seeking a stock that looks attractively priced, you'll be better off with The Hershey Company (NYSE: HSY). Despite material cost headwinds, this confection maker is still growing its business. That speaks to a potentially bright future if its valuation metrics return to their longer-term averages. Starting with the stock price, Hershey's shares have fallen around 45% from the all-time high they reached in 2023. That has pushed the dividend yield up to a historically high 3.6%. The stock's price-to-sales, price-to-earnings, and price-to-book value ratios are all below their five-year averages. Essentially, Hershey looks cheap while Coca-Cola looks expensive. There's a reason, of course. Hershey is facing a severe cost headwind thanks to the massive increase in the price of cocoa. Although revenue is expected to grow at least 2% in 2025, the company's adjusted earnings are projected to fall in the mid-30% range. Investors are reacting accordingly and selling the stock. But that's an opportunity for long-term growth investors. Indeed, the current headwinds haven't stopped Hershey from growing its business. It has recently added the Sour Strips brand to its confection operation and has agreed to buy LesserEvil, which will expand its presence in the salty snack category. In other words, this food maker is taking the long view even as it deals with adversity. That, plus a strong balance sheet, should reassure investors that the currently struggling business will rebound once the cocoa market becomes more rational. To be fair, cocoa comes from trees, so it could take a little while for commodity prices to rationalize. There's probably no rush to buy Hershey's stock. However, acting now gets you in the door and allows you to collect a historically high yield while you await better days. And you'll get to benefit from the growth via acquisition that's being hidden by the market's cocoa concerns. If you wait too long, meanwhile, you could miss out entirely on this unstoppable growth stock. It's probably better to be a little early than miss out because you wait too long. Before you buy stock in Coca-Cola, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Coca-Cola wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,761!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $826,263!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 170% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Reuben Gregg Brewer has positions in Hershey. The Motley Fool has positions in and recommends Hershey. The Motley Fool has a disclosure policy. Should You Forget Coca-Cola? Why You Might Want to Buy This Unstoppable Growth Stock Instead. was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
26-05-2025
- Business
- Yahoo
This Is Why Hershey's Sell-Off Is a Buying Opportunity for Growth Investors
Hershey faces cost headwinds that are leading to a dramatic earnings decline. However, the confection maker's sales continue to be resilient. Despite its current challenges, Hershey continues to invest for the future. 10 stocks we like better than Hershey › Shares of The Hershey Company (NYSE: HSY) are in a deep downturn, off over 40% from their 2023 highs. The confection giant is in its own personal bear market. Given the nature of the problems Hershey faces, the bad news that led to this decline isn't likely to let up anytime soon. Yet, this food maker's share price drop is still a buying opportunity for growth investors. Here's why. Hershey is a consumer staples company. Within that broad sector description, it is a food maker. And within that, it is a snack maker. The company's biggest business is confections, dominated by its chocolate products. That includes industry leading brands like Hershey and Reese's. It is this business that is the problem right now. Generally speaking, consumer staples companies make products that are bought regularly -- regardless of the economic environment. Chocolate isn't a necessity, but it is an affordable indulgence that consumers love. So while recessions are a problem to consider, Hershey tends to be just as resilient a business as other food makers. In fact, demand isn't expected to be a problem in 2025. Hershey continues to guide for a sales advance of "at least" 2% for the full year. And yet adjusted earnings are expected to drop around 35% or so. What's going on is that the price of cocoa -- the key chocolate ingredient -- has soared and is crimping the company's margins. Cocoa's price rise is simply too large to pass on to consumers so Hershey has to eat it, at least over the near term. The interesting thing about Hershey as a company is that The Hershey Trust, a non-profit entity, has voting control of the company. The Hershey Trust uses the dividends it collects from Hershey (the company) to fund its philanthropic efforts. It takes a long-term view even when Wall Street is caught up in short-term problems, like the rise in cocoa prices. High commodity prices tend to resolve over time because they bring new investment. Cocoa comes from trees, so the resolution process may be a long one, but eventually this issue will pass. And even if cocoa prices remain elevated, Hershey will cut costs and slowly raise prices to restore its margins. The Hershey Trust isn't likely to push management to do anything rash. In fact, Hershey is operating just like it has for years. And that notably includes buying new brands to diversify its business. Despite the share price downturn, Hershey has inked deals to buy Sour Strips in the non-chocolate confection space and LesserEvil in the salty snacks space. These are two areas in which the company is looking to expand its business reach. Simply put, management isn't running around worried about a five-alarm fire because Wall Street has a negative view of the business. Hershey is still investing for the long term, at least partly because it doesn't have to answer to Wall Street, it has to answer to The Hershey Trust. Hershey has a long history of growth, and demand for its core products remains solid. Management continues to invest for the future despite the cocoa headwinds it faces. Given the price decline, this still-growing food maker looks like it is on sale today. And the best part is that the price drop has pushed the dividend yield up to a historically high 3.5%. So not only is this downturn an opportunity for growth investors, but it is also an opportunity for income investors. Before you buy stock in Hershey, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Hershey wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor's total average return is 957% — a market-crushing outperformance compared to 167% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Reuben Gregg Brewer has positions in Hershey. The Motley Fool has positions in and recommends Hershey. The Motley Fool has a disclosure policy. This Is Why Hershey's Sell-Off Is a Buying Opportunity for Growth Investors was originally published by The Motley Fool
Yahoo
14-05-2025
- Business
- Yahoo
The Hershey Company (HSY): Among the Best Dividend Growth Stocks with High Yields
We recently published a list of the . In this article, we are going to take a look at where The Hershey Company (NYSE:HSY) stands against other best dividend growth stocks. Dividend-paying stocks have been gaining popularity among investors due to their long-term advantages. According to Jeremy Zirin, who leads the US equity team for private clients at UBS Asset Management, companies with a consistent track record of increasing dividends are a smart choice for investors seeking a balanced approach in the current market environment. When markets dipped in April after President Donald Trump announced new tariff policies, investors gravitated toward high-yield dividend stocks. However, as trade tensions began to ease and negotiations progressed, markets recovered. Stocks surged particularly after the US and China agreed to temporarily reduce tariffs. He made the following comment about dividend stocks: 'The higher-dividend-yielding strategies tend to do better when markets are in real turmoil and declining, but if there's more chop, more volatility and potentially upside … you don't want to be overly defensive.' Historically, companies that consistently increase their dividends have tended to be less volatile and often delivered stronger returns than the broader market, including benchmarks like the S&P Equal Weight Index. According to a report by Guggenheim, from May 2005 through December 2024, firms that either initiated or raised their dividends generated an average annual return of 10.5%. In contrast, companies that cut or suspended their payouts posted just 5.5% annually. The overall market returned 10.4% during this timeframe, slightly behind the dividend growers. The report also highlighted that dividend growth strategies have historically performed well in both rising and falling markets, making them an attractive option for investors focused on long-term gains and downside protection. According to a report by S&P Global, the growth of global dividend payments had been slowing since the post-COVID recovery, but that trend reversed last year. In 2024, the growth rate unexpectedly accelerated to 8%, with shareholders receiving approximately $180 billion more than the previous year. This increase came as a surprise given the persistent geopolitical and economic challenges. The report also highlighted that several sectors and regions saw record dividend initiations, including the US technology, media, and telecom (TMT) sector, banks in Italy and Spain, Japan's automotive industry, and a general rise in payouts from Mainland China. Even with extreme price fluctuations, dividend payments from the oil and gas sector remained strong. Looking ahead, the report suggested that this high level of dividends is likely to hold steady, with global payouts expected to remain at $2.3 trillion in 2025. With growing investor appetite for dividend-paying stocks, many companies have responded by gradually increasing their dividend payouts. A report by Janus Henderson revealed that global dividend payments reached a record $1.75 trillion in 2024, reflecting a 6.6% rise on an underlying basis. The overall growth rate came in at 5.2%, slightly held back by a drop in special one-time dividends and the effect of a stronger U.S. dollar. Out of the 49 countries covered in the report, 17—including major economies such as the US, Canada, France, Japan, and China—posted record-high dividend levels. In total, 88% of companies either raised or held their dividends steady over the year. A close-up of hands deftly moulding a bar of chocolate. For this list, we screened for dividend stocks with yields higher than 3% as of May 13. From this group, we further refined our selection criteria by identifying stocks with a dividend growth streak of 10 years or more. The stocks are ranked in ascending order of their dividend yields. At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). Dividend Yield as of May 13: 3.21% The Hershey Company (NYSE:HSY) is a Pennsylvania-based multinational confectionery company that is known for its chocolates, snacks, and pantry items. The company faced near-term challenges from reduced calorie consumption due to Ozempic and rising cocoa costs from poor harvests. The stock has declined by over 22% in the past 12 months. However, its long-term outlook remains stable thanks to diversified product offerings and pricing power to offset higher input costs. In the first quarter of 2025, The Hershey Company (NYSE:HSY) reported revenue of $2.8 billion, which, though, fell by 13.7% YoY, beat analysts' estimates by $11.9 million. The EPS of $2.09 also beat consensus by $0.16. The company's quarterly consumption surpassed expectations across both its US Candy, Mint, and Gum segment and its Salty Snacks category, fueled by strong seasonal demand and the continued success of products like Dot's and SkinnyPop. Although cost pressures remain elevated, management emphasized that the company's solid balance sheet provides the flexibility to invest in growth initiatives and pursue recent strategic acquisitions, which enhance its better-for-you offerings and support long-term value creation. The Hershey Company (NYSE:HSY) ended the quarter with over $1.5 billion available in cash and cash equivalents, up from $730.7 million at the end of December 2024. It is one of the best dividend stocks on our list as the company has raised its payouts for 15 years in a row. Currently, it offers a quarterly dividend of $1.37 per share and has a dividend yield of 3.21%, as of May 13. Overall, HSY ranks 18th on our list of the best dividend growth stocks with high yields. While we acknowledge the potential of HSY as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than HSY but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at . Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
14-05-2025
- Business
- Yahoo
Some Investors May Be Willing To Look Past Hershey's (NYSE:HSY) Soft Earnings
The market for The Hershey Company's (NYSE:HSY) shares didn't move much after it posted weak earnings recently. Our analysis suggests that while the profits are soft, the foundations of the business are strong. Our free stock report includes 1 warning sign investors should be aware of before investing in Hershey. Read for free now. To properly understand Hershey's profit results, we need to consider the US$339m expense attributed to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's hardly a surprise given these line items are considered unusual. Assuming those unusual expenses don't come up again, we'd therefore expect Hershey to produce a higher profit next year, all else being equal. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. Because unusual items detracted from Hershey's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Hershey's earnings potential is at least as good as it seems, and maybe even better! And we are pleased to note that EPS is at least heading in the right direction over the last three years. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. So while earnings quality is important, it's equally important to consider the risks facing Hershey at this point in time. Case in point: We've spotted 1 warning sign for Hershey you should be aware of. This note has only looked at a single factor that sheds light on the nature of Hershey's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
