10 Best Chocolate Stocks to Buy Now

5. Hormel Foods Corporation (NYSE:HRL)

Number of Hedge Fund Holders: 31

Hormel Foods Corporation (NYSE:HRL) is a global branded food company, operating in more than 80 countries. Its portfolio includes iconic brands such as Planters, Skippy, SPAM, Hormel Natural Choice, and Justin’s. Known for high-quality products, Justin’s offers alternatives such as USDA organic, non-GMO chocolate candy pieces, chocolate butter, and spreads, cementing its leadership in the natural confectionery space. HRL ranks fifth on our list of the best chocolate stocks.

In Q3 2024, Hormel Foods Corporation (NYSE:HRL) reported net sales of $2.90 billion, a 2.2% decline from the previous year, primarily due to weaker performance in the Retail and International segments. The Retail segment, which includes brands such as Justin’s, saw a 7% decline in net sales, driven by lower volumes and pricing for whole bird turkeys and disruptions at its Suffolk, Virginia, facility.

Conversely, the food service segment grew by 7%, fueled by strong demand for turkey and bacon, likely contributing to the net income of $267 million. EPS came in at $0.37, beating expectations.

Hormel Foods Corporation (NYSE:HRL) demonstrated strong liquidity in Q3 2024, generating $218 million in cash flow from operations. Capital expenditures were down from the previous year, showcasing effective cost management. The company returned $155 million to shareholders through dividends during the quarter, marking its 96th consecutive year of uninterrupted payouts.

On August 7, Hormel Foods Corporation (NYSE:HRL) released its 18th Global Impact Report, highlighting key ESG achievements, including emissions reduction targets, a 1.7 million-pound packaging reduction, and its lowest incident rate ever.

Over the past month, the stock experienced a 0.38% decline, likely reflecting short-term concerns over production disruptions and weaker retail performance. However, a 1.17% YTD uptick signals continued investor confidence in the company’s long-term growth. Hormel’s strategic focus on key brands, international expansion, and consistent dividend payouts support its strong stock performance moving forward.

Analysts are projecting an upside potential of 1.71%, and as of Q2 2024, 31 hedge funds, holding a combined investment of $714 million, remain bullish on the stock, as per Insider Monkey’s database.