This is the third time I’ve written on The Hershey Company’s (NYSE: HSY), and the price has just slumped and slumped. The other articles can be found here and here. Today, my main intention is to do a deeper dive into what buying and holding at these levels for at least 5 years could do for the long-term and patient investor. The stock has a strong trailing dividend growth rate, and the starting forward yield is now higher than most high-yield savings accounts [but lower than money market funds].
In bull markets, the consumer staples often get left by the wayside, the cost of capital is also hurting the sector. This is a sector that borrows a lot of its operating capital and makes acquisitions to grow. As a company that normally trades in the 20-24 X P/E range, getting it here at 16.77 X FWD seems like a once in a decade deal. The same goes for the 3.64% dividend yield, which is also the highest in 10 years.