Updated on March 4th, 2025 by Felix Martinez
As the saying goes, slow-and-steady wins the race.
This comes to mind when discussing the Dividend Aristocrats, a select group of just 69 companies in the S&P 500 Index, each with at least 25 consecutive years of dividend increases.
The Dividend Aristocrats are among the best stocks for investors looking to generate long-term wealth that can last for generations.
With this in mind, we created a full list of all Dividend Aristocrats, along with relevant financial metrics such as price-to-earnings ratios.
You can download your full Dividend Aristocrats list by clicking on the link below:
Disclaimer: Sure Dividend is not affiliated with S&P Global in any way. S&P Global owns and maintains The Dividend Aristocrats Index. The information in this article and downloadable spreadsheet is based on Sure Dividend’s own review, summary, and analysis of the S&P 500 Dividend Aristocrats ETF (NOBL) and other sources, and is meant to help individual investors better understand this ETF and the index upon which it is based. None of the information in this article or spreadsheet is official data from S&P Global. Consult S&P Global for official information.
Hormel Foods (HRL) is the very definition of a slow-and-steady stock.
While it will not make investors rich overnight, it has steadily built wealth for its shareholders over many years.
Hormel operates in a stable industry and has many strong brands. It has also rewarded shareholders with 59 consecutive years of rising dividends for over 90 years.
Not only is Hormel a Dividend Aristocrat, but it is also a Dividend King, thanks to its outstanding track record of returning cash to shareholders.
The Dividend Kings have increased their dividends for 50+ consecutive years. You can see all the Dividend Kings here.
This article will discuss why Hormel is a high-quality dividend growth stock, and provide some perspective on the company’s growth and valuation outlook.
Business Overview
Hormel was formed all the way back in 1891, when George A. Hormel established the Geo. A. Hormel & Company in Austin, Minnesota. Consumers took a liking to Hormel’s fresh pork products, which were a novelty at the time. In 1926, the company produced the world’s first canned ham.
Hormel has continued to grow in the decades since, and now generates ~$17.5 billion in annual revenue. It has a diverse product portfolio today, spanning several categories. Some of its major brands include Skippy, Jennie-O, Spam, Hormel, and Dinty Moore.
In recent years, it has added more natural products to complement its processed offerings, such as Justin’s and Applegate.
Hormel posted first quarter earnings on February 27th, 2025. The company reported first-quarter fiscal 2025 net sales of $2.99 billion (1% organic growth) and adjusted earnings per share of $0.35. Operating income reached $228 million ($254 million adjusted), with $309 million in operating cash flow. The company reaffirmed its full-year guidance, expecting 1% to 3% sales growth and adjusted EPS between $1.58 and $1.72.
Retail saw growth in key brands like SPAM and Applegate, while Foodservice maintained strong demand for premium proteins. The International segment expanded in China, though supply chain disruptions and turkey market challenges impacted results. The Planters brand showed improvement, and the company expects $100 million to $150 million in cost benefits from its Transform and Modernize (T&M) initiative.
Hormel invested $72 million in capital expenditures to enhance production and returned $155 million to shareholders through dividends. It remains focused on strategic expansion and long-term growth.
Source: Investor Presentation
Growth Prospects
Hormel has an extremely impressive history of generating consistent growth from year to year, regardless of the broader economic climate. This speaks to the company’s strong brands and staying power during recession.
Hormel’s growth prospects depend upon a few different levers it can pull in the coming years. Organic growth is likely due to the company’s strong brands. In addition, Hormel has habitually bought its growth over the years through acquisitions.
The most recent example is Hormel’s $3.35 billion acquisition of the Planters snack nut portfolio from Kraft-Heinz (KHC). The acquisition fits perfectly into Hormel’s long-held acquisition strategy.
The deal is expected to provide Hormel with a $560 million tax benefit, for a net price of $2.79 billion. The portfolio produced $1 billion in sales in 2020 and should reach Hormel’s long–term organic growth target.
Moving forward, we expect 5% annualized earnings per share growth over the next half decade.
Source: Investor Presentation
Competitive Advantages & Recession Performance
Hormel has several operational advantages. First, it operates in a wide variety of very stable food businesses. Everyone has to eat, which gives the company a certain level of demand, even during recessions.
In addition, Hormel’s products are affordable for everyone, so stability should shine through during tough economic times.
In addition, Hormel has many strong brands, which gives the company pricing power. Hormel has the #1 or #2 position in over 40 of its brands.
Hormel’s popular products make it difficult for competing food companies to take market share. In fact, Hormel has held that enviable leadership position for years, so it is certainly a lasting advantage.
Hormel’s competitive advantages provide the company with a recession-resistant business model. Hormel’s earnings-per-share during the Great Recession are below:
- 2007 earnings-per-share of $0.54
- 2008 earnings-per-share of $0.52 (3.7% decline)
- 2009 earnings-per-share of $0.63 (21% increase)
- 2010 earnings-per-share of $0.76 (21% increase)
As you can see, Hormel experienced a mild earnings decline in 2008, then racked up two consecutive years of 20%+ earnings growth. We expect Hormel to perform very well whenever the next recession strikes.
Valuation & Expected Returns
We expect Hormel to generate an adjusted EPS of $1.67 for fiscal 2025. Based on this, the stock trades for a price-to-earnings ratio of 18.3. This is below Hormel’s 10-year average price-to-earnings ratio. We view fair value for Hormel at a P/E of 22.
As a result, Hormel appears to be undervalued right now. If the P/E expands to 22 over the next five years, it would increase annual returns by 3.2% per year for the next five years.
With expected EPS growth of 7% and a dividend yield of 3.9%, total returns are estimated at 14.1% per year.
The company’s dividend is very safe and will almost certainly continue to grow for many years. Given that the total return profile is over 10% annualized, we rate Hormel stock a buy.
Final Thoughts
Hormel has paid consecutive quarterly dividends without interruption since it became a public company in 1928. It has established one of the longest market dividend increases streaks, and it is a Dividend King.
Consumer staples stocks enjoy steady demand and pricing power, particularly food companies with strong brands. Hormel has a strong business with a high-quality brand portfolio.
We rate HRL stock a Buy.
Additionally, the following Sure Dividend databases contain the most reliable dividend growers in our investment universe:
- The Dividend Contenders List: 10-24 consecutive years of dividend increases.
- The Dividend Challengers List: 5-9 consecutive years of dividend increases.
- The Dividend Champions: Dividend stocks with 25+ years of dividend increases, including those that may not qualify as Dividend Aristocrats.
- The Dividend Achievers: dividend stocks with 10+ years of consecutive dividend increases.
- The Dividend Kings: considered to be the ultimate dividend growth stocks, the Dividend Kings list is comprised of stocks with 50+ years of consecutive dividend increases
If you’re looking for stocks with unique dividend characteristics, consider the following Sure Dividend databases:
- The Complete List of Monthly Dividend Stocks: stocks that pay dividends each month, for 12 payments over the year.
- The Blue Chip Stocks List: this database contains stocks that qualify as either Dividend Achievers, Dividend Aristocrats, or Dividend Kings.
The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them monthly: