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Hershey Co will remove synthetic dyes from its snacks by the end of 2027, Bloomberg News reported on Monday, making it the latest in a growing list of companies seeking to align with directives from U.S. health authorities.
In the closing of the recent trading day, Hershey (HSY) stood at $171.45, denoting a +1.02% move from the preceding trading day.
HSY leans on demand shaping and pricing strategy to ease elevated cocoa and tariff costs.
Dividend Yield Theory signals Hershey is undervalued, with current yield well above its historical mean, suggesting strong long-term total return potential. Despite recent earnings declines and headwinds from high cocoa prices, tariffs, and manufacturing costs, Hershey's fundamentals remain robust for dividend investors. Hershey's dividend is well-covered by cash flow, with strong ROIC, payout ratio, and dividend growth rates reinforcing its blue-chip status.
In the latest trading session, Hershey (HSY) closed at $169.12, marking a -1.74% move from the previous day.
Hershey is a quality international consumer staple sector company with an "A" S&P credit rating and 15 years of paying a rising dividend. It rarely has a dividend yield over 3% which it easily does now. Despite earnings dip for 2025 and issues with consumer healthy tastes, the company continues to meet the demand with new "Better For You" products.
Hershey shares have pulled back to attractive levels due to cocoa price spikes, tariffs, and higher interest rates, creating a solid entry point for long-term investors. Cocoa price volatility is a major headwind for 2025 but I don't see it impacting the firm's longer-term trajectory. Hershey faces meaningful but not unmanageable risk from tariffs.
Hershey's margins are under sustained pressure, with volume declines, elevated cocoa prices, and new tariffs creating a challenging environment for profitability. Despite strong brands and management, the current stock price reflects overly optimistic expectations for a return to normalcy, prompting my exit. Tariffs could significantly impact Hershey's earnings as outlined by management, adding to existing cost pressures and making the stock less attractive.
Consumer staple stocks are a compelling bet during heightened economic uncertainty.
HSY's first-quarter results reflect lower year-over-year earnings and sales amid economic uncertainty and heightened cost pressure.
The Hershey Company (NYSE:HSY ) Q1 2025 Earnings Conference Call May 1, 2025 8:30 AM ET Company Participants Anoori Naughton - Senior Director, Investor Relations Michele Buck - Chairman and Chief Executive Officer Steve Voskuil - Senior Vice President and Chief Financial Officer Conference Call Participants Ken Goldman - JPMorgan Andrew Lazar - Barclays Max Gumport - BNP Paribas David Palmer - Evercore ISI Robert Moskow - TD Cowen Jim Salera - Stephens Peter Galbo - Bank of America Alexia Howard - Bernstein Michael Lavery - Piper Sandler Megan Klapp - Morgan Stanley Thomas Palmer - Citi Leah Jordan - Goldman Sachs Christopher Carey - Wells Fargo Securities Scott Marks - Jefferies Bingqing Zhu - Redburn Atlantic Operator Greetings and welcome to The Hershey Company First Quarter 2025 Question & Answer Session. [Operator Instructions] At this time, all participants are in a listen-only mode.