Hershey Stock: Great Growth, Great Dividends, Nice Price

Yesterday’s selloff in Hershey stock was downright silly. Some analysts have sounded the alarm bell on the stock, “downgrading” it in notes to investors on the theory that the 1.5% sales growth in the third quarter was a signal of weakness.

As I’m sure this will surprise absolutely none of you, I do not see it that way. In the past year, Hershey has embarked on a series of aggressive price increases for its chocolates, mints, and gums. The whole Hershey portfolio of candies and other confectionaries saw price increases of 8%. The Reese’s brand, which has some of the most extraordinary profit margins and pricing power of any product sold over the past half-century, has seen its price go up by 12.5% in the past year.

Hershey has making its chocolate more expensive disproportionate to the 2.5% rise in the price of cocoa and all dairy input costs. It … Read the rest of this article!