April 13, 2025 a 02:46 pm
HSY: Dividend Analysis - The Hershey Company
The Hershey Company, a notable player in the consumer sector, showcases a compelling dividend profile with a substantial history of 41 years in dividend payouts without a cut or suspension. This underlines a strong commitment to rewarding shareholders, backed by a solid dividend yield of 3.47% that is appealing amid stable growth.
📊 Overview
The Hershey Company operates within the consumer sector, known for its resilience and consistent market demand. The company's dividend yield stands at an attractive 3.47%, with a current dividend per share of $5.36. Hershey's impressive 41-year history of dividend payments without a suspension highlights its strong financial management.
| Key Metric | Details |
|---|---|
| Sector | Consumer |
| Dividend yield | 3.47 % |
| Current dividend per share | $5.36 |
| Dividend history | 41 years |
| Last cut or suspension | None |
🗣️ Dividend History
Hershey's robust history of consistent dividend increases underscores its commitment to delivering shareholder value. This regularity in payouts assures investors of the company's financial health and operational stability.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.37 |
| 2024 | 5.48 |
| 2023 | 4.456 |
| 2022 | 3.874 |
| 2021 | 3.410 |
📈 Dividend Growth
The growth of Hershey's dividends over the past few years indicates a strong upward trend. With a 3-year growth rate of 17.13% and a 5-year growth rate of 12.88%, shareholders can be confident of receiving incrementally higher payouts.
| Time | Growth |
|---|---|
| 3 years | 17.13 % |
| 5 years | 12.88 % |
The average dividend growth is 12.88% over 5 years. This shows moderate but steady dividend growth.
✅ Payout Ratio
The payout ratio is a critical indicator of dividend sustainability. With an EPS-based payout ratio of 48.84% and a free cash flow-based ratio of 56.35%, Hershey demonstrates a balanced approach to rewarding shareholders while retaining earnings for business reinvestment.
| Key Figure | Ratio |
|---|---|
| EPS-based | 48.84 % |
| Free cash flow-based | 56.35 % |
These figures suggest that the company maintains a healthy balance between distributing dividends and preserving capital for growth and operational needs.
📝 Cashflow & Capital Efficiency
Cash flow management is fundamental for operational efficiency and strategic planning. Hershey shows a positive free cash flow yield and maintains a strategic balance between capital expenditures and operating cash flow, pointing to effective capital allocation practices.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 7.38 % | 4.07 % | 3.80 % |
| Earnings Yield | 6.48 % | 4.88 % | 3.46 % |
| CAPEX to Operating Cash Flow | 23.94 % | 33.19 % | 22.32 % |
| Stock-based Compensation to Revenue | 0.40 % | 0.73 % | 0.63 % |
| Free Cash Flow / Operating Cash Flow Ratio | 100 % | 66.81 % | 77.68 % |
The data reflects strong cash flow generation capabilities and a prudent approach to investment decisions, enhancing operational resilience.
⚠️ Balance Sheet & Leverage Analysis
Analyzing the balance sheet helps assess Hershey's financial stability. The company's leverage ratios, such as debt-to-equity and current ratio, need to be considered to understand the capital structure and potential risks.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.08 | 1.25 | 1.54 |
| Debt-to-Assets | 39.41% | 43.06% | 46.42% |
| Debt-to-Capital | 51.97% | 55.56% | 60.63% |
| Net Debt to EBITDA | 1.48 | 1.72 | 1.94 |
| Current Ratio | 0.97 | 0.97 | 0.80 |
| Quick Ratio | 0.64 | 0.52 | 0.44 |
| Financial Leverage | 2.75 | 2.90 | 3.32 |
Hershey's leverage ratios indicate moderate usage of debt, suggesting manageable leverage with a continued focus on ensuring liquidity and financial health.
🏛️ Fundamental Strength & Profitability
The fundamental strength is measured through profitability ratios such as Return on Equity (ROE), Return on Assets (ROA), and margins, which illustrate Hershey's efficiency in generating profit from its operations.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 47.11 % | 45.42 % | 49.85 % |
| Return on Assets | 17.16 % | 15.64 % | 15.02 % |
| Net Margin | 19.83 % | 16.68 % | 15.79 % |
| EBIT Margin | 23.64 % | 20.90 % | 19.64 % |
| EBITDA Margin | 27.70 % | 24.66 % | 22.84 % |
| Gross Margin | 47.32 % | 44.77 % | 43.18 % |
| Research & Development to Revenue | 0.00 % | 0.45 % | 0.45 % |
Hershey's financial metrics highlight strong profitability, with robust ROE and profit margins reflecting superior operational efficiency and market positioning.
📉 Price Development
🌟 Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend Yield | 4 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 4 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Overall Score: 34/40
🏅 Rating
The Hershey Company exhibits a robust dividend profile with strong historical stability and growth, supported by sound financial health and profitability. The company's resilience, consistent dividend history, and strategic financial management make it a noteworthy choice for income-focused investors.