I recently opened up a position in Hershey (HSY) to add to my dividend portfolio. Hershey has been around for over a hundred years and the famous international chocolate maker is not going anywhere anytime soon. Hershey’s chocolates are relatively cheap for consumers so a recession in the economy may not necessarily affect the amount of chocolates purchased. In addition to that, they have a long history of 20+ years of paying dividends.
Hershey Dividend History
Below is a snapshot of Hershey’s dividend history over the past 6 years:
Hershey is currently paying a dividend of $0.722 per share per quarter, and their payment quarters are based on calendar year. So every March, June, September, and December, they’re paying out a dividend. If you own 100 shares of HSY, then you’re receiving $72.20 per quarter in dividends.
Hershey Financial Statements
Given Hershey’s strong market share of chocolates and stable, consistent dividend payouts, I dug up their financial statements to take a look.
Hershey has had consistent stable growth over the last 5 years. Their revenues have remained pretty steady, but operating income and net income has continued to rise.
Looking at the cash flow statement is very important, as this is where dividends are paid from. Specifically the Cash Flow from Financing activities.
Over the last 5 years, Hershey has increased their dividend payouts year-over-year. Alongside this, their overall free cash flow has also risen year-over-year, going from negative to positive. Having increased cash while still paying out higher dividends is a very positive sign of strong cash growth. This is important for dividend investors which ensures continuity in dividend payments.
To top it all off at the end, Hershey’s balance sheet is showing increased cash reserves. This represents the company’s financial strength. In the event of a market downturn or a recession, Hershey still has the ability to continue making dividend payments and sustain itself with its cash reserves.
As a result of this research, I decided to buy some shares in Hershey. Although I missed its first dividend payment this year which took place in March, I am positioned for its upcoming payments for the rest of the year. This will be a stock that I hold on to for a very long time. Most likely until retirement and beyond. I don’t believe Hershey is going anywhere soon. They’re financially strong and I don’t see them hitting any financial hardships.