Hormel Foods (HRL) products are familiar to anyone who has strolled through a grocery store. Hormel® Chili, Dinty Moore® Beef Stew, SKIPPY® peanut butter, and Applegate® products, to name just a few, can be spotted in nearly every cart.
The company was founded in 1891, and the company became a publicly traded firm in 1928.
After the market crash in 2008, the stock set a low on December 3rd, 2008, closed above the 200-day moving average in early 2009, and has pretty much stayed above it ever since. HRL's 450% gain over those 2,544 days represents an annualized average gain of 65% a year.
After that nearly 7 year climb, Hormel's dividend yield works out to 1.5%. At first, that doesn't sound like much. But Hormel has raised its dividend for 48 consecutive years (that streak started when the average cost of a new house was $14,250, the average income per year was $7,300, and the movies “The Graduate”, “Bonnie and Clyde”, and “Cool Hand Luke” came out).
Even better, Hormel's 5-year average dividend growth rate is an impressive 19%.
Let's say the stock goes nowhere for 10 years. But with dividend reinvestment, and assuming the current 19% growth a year of the dividend is maintained, the original investment could be returning 11.7% a year after 10 years. You would have decent income if you started pocketing the dividends, or you could continue to reinvest the dividends for larger gains in the future (the table below gives a general idea, since it assumes only a yearly dividend distribution and only whole shares are bought. In reality, you would get quarterly dividends, and may be able to buy fractional shares, which would compound the results producing even larger gains. I'll refine my spreadsheet over time).
The gains from just dividends could be 54%. Any gains on the stock price would be icing on the cake.
Actually, I added HRL to the Seasonal Forecaster portfolio on September 9th, due to its strong fundamentals, good technical setup, and strong seasonal pattern. This position is already sporting a gain of 9.6%, including the dividend paid last week. But HRL has just stepped up to new highs, and it is worth considering for new positions or adding-to existing positions.
Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day. To find out more, please click on the following link: www.markettamer.com/seasonal
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