Hormel Foods: A Deserved Premium, But I'm Still Not Buying

Consumer staples companies typically make up a good portion of most dividend growth investors' portfolios and for good reason.  Businesses that provide products that are used every day and enjoyed by their customers have a very captive audience that keep coming back to buy more products month after month.

Hormel Foods (HRL) has plenty of recognizable brands under their control.  In addition to brands such as SPAM and Hormel meats like pepperoni and the various other deli offerings, Hormel also owns the Jennie-O Turkey brand as well as Wholly Guacamole, Skippy and Justin's peanut butter.

Hormel's sales are largely concentrated in the United States with over 90% of FY 2019's revenue coming from the domestic market.  Management is focusing on international expansion as a way to improve growth prospects by focusing on both Asia and South America with their faster growing economies and populations.


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