Mondelez International Inc (MDLZ), The Hershey Company (HSY): Sweeten Up Your Portfolio With This Candy Company

Lastly, the company has built proprietary go-to market tools for applications such as mind modeling of consumers. This would help the company understands what the brands really mean to the customers, and then design new products that appeal to them.

I believe, with such a business model and a strategy, The Hershey Company (NYSE:HSY) still has growth potential going forward.

Tootsie Roll is great for value investors

Tootsie Roll Industries, Inc. (NYSE:TR) is my last pick from the candy companies. The company has operations primarily in the United States, Canada and Mexico. Like The Hershey Company (NYSE:HSY), the company has been showing consistent increase in its revenues.

2012 was a great year for the company, as it reported a record $546 million in sales, up 3.3% from 2011. Its earnings per share growth clocked in at a whopping 20%. Tootsie Roll Industries, Inc. (NYSE:TR) is a pleasant example of a value stock.

The company pays out almost all of its earnings (91%). Last year it also paid a special dividend of $0.50 per share, making it the company’s 48^th consecutive stock dividend. The company has also spent close to $24 million buying back its shares in the year 2012.

I do not perceive the company to show some impressive growth figures in the coming years, but it will maintain its current performance. Therefore, the dividends will keep on coming. The company is trading at a trailing P/E of 39.5 against an industry average of 22.5. I think value investors should find a better entry point into this company.

The takeaway

A candy company is not an attractive investment if it is just counting on the economic recovery in a country to cause its sales to go up. A candy company needs to be proactive. The Hershey Company (NYSE:HSY) is my favorite, as it enjoys a solid product line along with a proactive team that will definitely increase the company’s earnings in the years to come.

Awais Iqbal has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Sweeten Up Your Portfolio With This Candy Company originally appeared on Fool.com.

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