July 09, 2026 a 07:31 am
HSY: Dividend Analysis - The Hershey Company
The Hershey Company, a stalwart in the consumer goods sector, offers a reliable dividend with a strong history. With over 42 years of uninterrupted dividend payments, the company illustrates its commitment to returning value to shareholders. Currently, with a dividend yield of 3.02% and a moderate dividend growth rate, Hershey represents a dependable option for dividend-seeking investors.
Overview 📊
Understanding the company’s financial landscape is crucial for assessing its dividend reliability and future growth potential.
| Metric | Value |
|---|---|
| Sector | Consumer Goods |
| Dividend Yield | 3.02% |
| Current Dividend per Share | $5.33 USD |
| Dividend History | 42 years |
| Last Cut or Suspension | None |
Dividend History 🗣️
Hershey's consistent dividend history underscores its stable cash flow and operational efficiency, essential indicators of financial health.
| Year | Dividend Per Share |
|---|---|
| 2026 | $2.904 |
| 2025 | $5.48 |
| 2024 | $5.48 |
| 2023 | $4.456 |
| 2022 | $3.874 |
Dividend Growth 📈
Understanding the dividend growth rate offers insights into the company’s future income potential for shareholders.
| Time | Growth |
|---|---|
| 3 years | 12.26% |
| 5 years | 11.68% |
The average dividend growth is 11.68% over 5 years. This shows moderate but steady dividend growth.
Payout Ratio 📉
A healthy payout ratio indicates sustainability in dividend payments. It helps to assess whether the company can maintain its dividends out of its earnings.
| Key figure | Ratio |
|---|---|
| EPS-based | 96.84% |
| Free cash flow-based | 49.88% |
With an EPS payout ratio of 96.84%, the company is distributing most of its earnings as dividends, which suggests a mature business. The 49.88% FCF payout ratio provides a cushion from cash flows, indicating manageable distribution obligations.
Cashflow & Capital Efficiency 💰
The cash flow metrics offer an insight into the liquidity and efficiency of capital use, fundamental for supporting dividend payouts.
| Year | 2025 | 2024 | 2023 |
|---|---|---|---|
| Free Cash Flow Yield | 4.72% | 5.60% | 4.07% |
| Earnings Yield | 2.39% | 6.46% | 4.88% |
| CAPEX to Operating Cash Flow | 23.19% | 23.94% | 33.19% |
| Stock-based Compensation to Revenue | 0.56% | 0.40% | 0.73% |
| Free Cash Flow / Operating Cash Flow Ratio | 76.81% | 76.06% | 66.81% |
The consistent cash flow ratios highlight a stable cash generation capability, vital for ongoing dividend strength and potential capital reinvestment.
Balance Sheet & Leverage Analysis 🏦
Assessing leverage and financial ratios offers insights into financial health and the potential risks associated with debt levels.
| Year | 2025 | 2024 | 2023 |
|---|---|---|---|
| Debt-to-Equity | 1.17 | 1.15 | 1.25 |
| Debt-to-Assets | 39.32% | 42.08% | 43.06% |
| Debt-to-Capital | 53.82% | 53.61% | 55.56% |
| Net Debt to EBITDA | 2.29 | 1.52 | 1.72 |
| Current Ratio | 1.24 | 0.96 | 0.97 |
| Quick Ratio | 0.72 | 0.64 | 0.52 |
| Financial Leverage | 2.96 | 2.75 | 2.90 |
A balanced leverage position combined with solid interest coverage indicates a robust ability to manage obligations, supporting dividend commitments.
Fundamental Strength & Profitability 💼
Evaluating profitability metrics gives an indication of financial performance, shareholder value creation, and enterprise growth aspects.
| Year | 2025 | 2024 | 2023 |
|---|---|---|---|
| Return on Equity | 19.05% | 47.11% | 45.42% |
| Return on Assets | 6.43% | 17.16% | 15.64% |
| Margins (Net) | 7.55% | 19.83% | 16.68% |
| Margins (EBIT) | 12.39% | 23.64% | 20.90% |
| Margins (EBITDA) | 16.70% | 27.70% | 24.66% |
| Margins (Gross) | 33.27% | 47.32% | 44.76% |
| R&D to Revenue | 0% | 0% | 0% |
Solid profitability ratios demonstrate excellent operational efficiency and a solid foundation for dividend sustainability, although a lack of R&D spend may indicate a focus on core operations rather than innovation.
Price Development 📊
Dividend Scoring System ✅
| Criteria | Score (1-5) | Score Bar |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 3 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
The Hershey Company scores 32 out of 40 in the Dividend Scoring System.
Rating ⚖️
The Hershey Company maintains a robust dividend profile, characterized by stability and moderate growth. While high payout ratios demand attention, the company's dedication to shareholder returns through longstanding dividend consistency offers attractive investment opportunities for income-focused investors. Overall, Hershey represents a strong choice for a stable dividend stream, with prudent monitoring of its financial ratios.
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