Stock Spotlight: Hormel Foods
If you know anything about the stocks that make our stock spotlight each week, then you know that you can almost always count on learning about a stock that not only has a high PowerRating itself, but also comes from an industry group with a PowerRating that is no less impressive.
So it is with Hormel Foods
(
HRL |
Quote |
Chart |
News |
PowerRating), our Stock Spotlight feature of the week.
Hormel Foods has a PowerRating of 9. Based on our research going back to 1995, stocks with PowerRatings of 9 have been much more reliable than both the average stock and the broader market for stocks in terms of being higher after a year. While the average stock has been higher one year later less than 68% of the time, 9-rated stocks have been higher one year later more than 79% of the time.
In addition to superior reliability, high PowerRatings stocks like Hormel Foods have also outperformed the average stock by a significant margin. Stocks with PowerRatings of 9, for example, have averaged a gain of more than 18% in a year’s time. Compare this to the average stock, which has tended to gain 12-13% on average after one year.
What’s more, Hormel Foods comes from an industry that also has a PowerRating of 9. This industry, Meat Products, can be expected to outperform most other industry groups based on our research which reveals that 9-rated stocks have produced average annualized returns of more than 24%. The average industry, by comparison, has provided average annualized returns of approximately 14.61%.
Hormel Foods is a worldwide maker and marketer of brand-name food and meat products. Some of the companies more well-known brands include Hormel, of course, as well as Chi-Chi’s Mexican foods, Dinty Moore, Stagg chili, Farmer John and perhaps the company’s most famous brand of all, Spam.
Based out of Austin, Minnesota, Hormel Foods has been named by Forbes as one of the 400 “Best Big Companies in America” for the past nine years. While the company made news recently as one of the food and meat product manufacturers that stood to benefit from the FDA’s recent ruling in favor of using meat from cloned animals, Hormel Foods has been cautious about pursuing this initiative, fearing a perceived “yuck” factor and potential consumer backlash.
The stock trades as about 18 times earnings, and is at the upper end of a fairly tight 52-week price range from $41.82 at the high to
$30.04 at the low. Hormel Foods also has a modest dividend yield of 1.90.
Hormel Foods shares the Meat Products industry group with other well-known meat producers such as Smithfield Foods
(
SFD |
Quote |
Chart |
News |
PowerRating) and Tyson Foods
(
TSN |
Quote |
Chart |
News |
PowerRating). Both Smithfield Foods and Tyson Foods have average PowerRatings of 5.
David Penn is Senior Editor at PowerRatings.net