05-28-2015, 03:24 PM
I'm not sure that we've discussed Hershey around here much. Seeing as it is almost time for my afternoon run to the candy machine, I though I would solicit people's opinions about HSY.
Tim M. praised it in one of his recent articles, and it caught my eye in another article as well, so I decided to put it through its paces. I of course love the product, and it seems like a very well-run company, but overall I think there are much more exciting DG opportunities around right now.
The best aspect about HSY seems to be the consistent revenue and earnings growth -- the absolute foundation for a healthy company. Their dividend growth streak is only 5 years (though seems likely to be 6 soon), and the payout ratio is just above 50 percent. The current yield is an ok 2.29 percent. I love the simple business model. But the real downer for me is the price -- even after a significant recent decline, it is still trading for a P/E of about 24.
Bottom line: I'd love to own some HSY, but I don't think at this price. I know that the gist of Tim's article was that something like HSY can be a great buy even at 24 times earnings, but I am still wary. Maybe I am just one of those people who needs a bit more of a bargain.
What do you all think?
Tim M. praised it in one of his recent articles, and it caught my eye in another article as well, so I decided to put it through its paces. I of course love the product, and it seems like a very well-run company, but overall I think there are much more exciting DG opportunities around right now.
The best aspect about HSY seems to be the consistent revenue and earnings growth -- the absolute foundation for a healthy company. Their dividend growth streak is only 5 years (though seems likely to be 6 soon), and the payout ratio is just above 50 percent. The current yield is an ok 2.29 percent. I love the simple business model. But the real downer for me is the price -- even after a significant recent decline, it is still trading for a P/E of about 24.
Bottom line: I'd love to own some HSY, but I don't think at this price. I know that the gist of Tim's article was that something like HSY can be a great buy even at 24 times earnings, but I am still wary. Maybe I am just one of those people who needs a bit more of a bargain.
What do you all think?