April 18, 2025 a 11:31 am
HSY: Dividend Analysis - The Hershey Company
The Hershey Company presents a compelling dividend profile with a robust history of payments, consistent growth, and sound financial fundamentals. Despite market fluctuations, HSY has maintained a solid yield and effective capital management strategies. This analysis will explore the key aspects of HSY's dividend viability and future potential.
📊 Overview
The Hershey Company, operating within the Consumer Goods sector, offers competitive dividends with solid growth potential. Here's a snapshot:
| Metric | Value |
|---|---|
| Sector | Consumer Goods |
| Dividend yield | 3.47% |
| Current dividend per share | 5.36 USD |
| Dividend history | 41 years |
| Last cut or suspension | None |
📈 Dividend History
The rich dividend history of The Hershey Company underscores its commitment to returning value to shareholders. Maintaining dividends for over four decades without cuts demonstrates financial resilience.
The following table shows the most recent dividend payments, exemplifying the company's reliability in shareholder returns:
| 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 dividends over time reflects positively on HSY's capacity to enhance shareholder value. Consistent advancement in dividends speaks to strong business performance and strategic foresight.
| 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, reflecting HSY's robust earnings potential and capital allocation efficiency.
✴️ Payout Ratio
The payout ratio is a key indicator of dividend sustainability. A balanced EPS-based payout ratio suggests that HSY maintains a prudent approach to distribution.
| Key Figure | Ratio |
|---|---|
| EPS-based | 48.84% |
| Free cash flow-based | 56.31% |
The payout ratios of 48.84% (EPS) and 56.31% (FCF) indicate a healthy payout, suggesting that HSY has ample room to maneuver in terms of ongoing dividend commitments.
💰 Cashflow & Capital Efficiency
Cash flow is the lifeblood of any dividend payment firm, and capital efficiency ensures high returns on investment. Here are key indicators for HSY:
| Metric | 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 | 0% | 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% |
HSY exhibits a strong cash flow position and excellent capital efficiency, underpinning its dividend sustainability and potential for growth through strategic investments.
📉 Balance Sheet & Leverage Analysis
Understanding the balance sheet is crucial for assessing financial stability and leverage. Here are the relevant metrics for HSY:
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 108.22% | 125.04% | 154.02% |
| Debt-to-Assets | 39.41% | 43.06% | 46.42% |
| Debt-to-Capital | 51.97% | 55.56% | 60.63% |
| Net Debt to EBITDA | 1.41x | 1.72x | 1.94x |
| Current Ratio | 0.96 | - | - |
| Quick Ratio | 0.64 | 0.52 | 0.44 |
| Financial Leverage | 2.75x | 2.90x | 3.32x |
HSY maintains a reasonable debt level and leverage ratios, which are manageable and reflect a stable balance sheet. This enhances the company's capacity to meet obligations and support its dividends.
💼 Fundamental Strength & Profitability
With high profitability ratios and returns, HSY shows the operational excellence necessary to sustain and grow its dividend profile.
| Metric | 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% | 0.45% | 0.45% |
Such strong fundamentals ensure continued profitability and cash flow generation, supporting robust dividend payments and potential increases.
🔍 Price Development
✅ Dividend Scoring System
The following scores each dividend characteristic:
| Category | Score | Scale |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend Growth | 3 | |
| Payout Ratio | 4 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Total Score: 33/40
🌟 Rating
Overall, The Hershey Company delivers a well-rounded dividend prospect with stability, consistent growth, and financial health central to its value proposition. Investors seeking reliable dividend income should consider HSY for its strong track record and balanced growth potential.