We recently published a list of Top 10 High Dividend Yielding Consumer Defensive Stocks To Buy. In this article, we are going to take a look at where Hormel Foods Corporation (NYSE:HRL) stands against other top high dividend yielding consumer defensive stocks to buy.
Consumer defensive stocks tend to perform well in uncertain times because they sell essential items such as household products, healthcare items, and food and beverages, among others. Such companies also tend to have a strong pricing power which helps them to easily pass on increasing costs to consumers.
The US market continues to struggle due to concerns over tariffs, geopolitical issues, and politics. In such times, consumer defensive stocks offer a way to protect one’s portfolio from this uncertainty.
When such shares also offer a high dividend yield, it performs a killer combination, loved by defensive investors looking to park their money for reliable passive income. We therefore decided to come up with a list of the top 10 high-dividend-yielding consumer defensive stocks.
To come up with the list of top 10 high-dividend consumer defensive stocks, we only considered stocks from the consumer defensive sector with a market cap of at least $10 billion and a dividend yield of at least 4%.
A close-up of a hand cutting fresh turkeys, revealing the perishable products of the company.
Hormel Foods Corporation (NYSE:HRL)
Hormel Foods Corporation (NYSE:HRL) makes and sells various food products, including nuts and meats. The end market of the company mainly consists of commercial customers, including food service operators and convenience stores. The stock’s dividend yield is currently hovering around the 4% mark, which is well above the 5-year average of 2.4%.
The stock is also undervalued when one looks at the price-to-book ratio, which currently stands at 2 against a 5-year average of 3.03. In the context of the 2025 guidance that Hormel Foods (NYSE:HRL) announced last month, this price level looks quite attractive.
At the earnings call last month, Hormel Foods (NYSE:HRL)’s management reaffirmed the 2025 guidance despite increasing concerns about inflation and tariffs. It expects about $100 million to $150 million in incremental profits during the fiscal year from the transform and modernize initiative, aimed at improving the supply chain and its product portfolio.
The investment opportunity has arisen because the Q2 performance is expected to be the same as Q1. It is in the second half of the year that the value-added turkey and Planters product line recovery will both act as a tailwind, driving the expected growth for the year.
Overall, HRL ranks 10th on our list of top high dividend yielding consumer defensive stocks to buy. While we acknowledge the potential of HRL as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as HRL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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