High Dividend Stocks To Serve With Turkey

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Dividend Stocks Research
High Dividend Stocks To Serve With Turkey
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• Hi, My name is Aaron and Im with Dividend Stocks
  Research, today were reviewing our recently
  published article

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• High Dividend Stocks To Serve With Turkey

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• Last year at Thanksgiving, one of my best friends
  came over and insisted on making the stuffing for
  our turkey. He told me it was his grandmothers
  recipe. Nothing written down, all in his head.

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• I didnt think there was much culinary knowledge
  locked away in my friends otherwise remarkable
  brain. My suspicions were confirmed when he
  started crunching up handfuls of Saltines to use
  as the foundation for the stuffing.

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• Oh well. It could have been worse. We had our
  turkey. Its not as if we were stuck eating
  SPAM, the signature product of Hormel Foods HRL.

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• But you could be feasting on a Hormel product
  this Thanksgiving and not even know it. For
  instance, Hormel owns Jennie O Turkeys.
  Surprised?

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• Well, its no surprise that when it comes to
  paying a dividend, Hormel Foods is Cordon Bleu.
  Its been serving up dividend growth for 48
  years.

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• And while we probably wont put Hormel on a list
  of high dividend stocks, the fact that the
  dividend keeps growing gives it special status.

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• Meet The Dividend With Plenty Of Room to Grow

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• With a low dividend payout ratio, just 38.3,
  theres plenty of money for Hormel to plow into
  dividend growth.
• When you check out the dividend payout ratio
  essentials, youll see how strong a number this
  is.

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• Is it strong enough to justify the Hormel stocks
  high price tag? The P/E Ratio (Price Earnings
  Ratio) is way up there at 27, about double the
  market.
•  And the actual yield is low, just 1.47.

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• So were in the familiar position of looking at a
  dividend stock that comes with pluses and
  minuses. Is Hormel one of the best dividend
  stocks to buy? One of the best dividend stocks
  for a rainy day?

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• If youre hung up on high yield, no. But if
  youre happy to sit back and let the yield grow
  over time, yes. Is Hormel a good deal? Well,
  with that high P/E ratio, its not exactly cheap.
  But lets face it. You always pay for quality.

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• 2015 has been a solid year for Hormel. In fact,
  the stock has been on a roll for quite awhile...

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• What We Can Learn From Dividend Stocks Like Hormel

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• The first lesson is not to make fun of SPAM.
  Dividend investors who have held Hormel for years
  are laughing all the way to the bank.

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• The next lesson is not to gorge on yield. Small
  yields turn into big ones when theres consistent
  growth year after year.

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• The dividend Hormel pays is modest. Its
  actually fairly low if all you measure is todays
  yield. Its the growth that makes this a tasty
  dividend stock.

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• Look back over the past 5 years and youll see
  Hormel has increased the dividend by an average
  of 18 a year.

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• 18 is strong. Right now, the average dividend
  growth for the stocks on the SP 500 is 10.4.

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• Dont bank on double-digit dividend growth year
  after year. When you size up dividend growth for
  the overall market, youll discover that it ebbs
  and flows.
• A few years ago, there wasnt any dividend
  growth.

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• Nada. 2009 was actually a negative year, when
  overall dividends went down by 21. So when you
  run into a dividend stock like Hormel, where the
  dividend has been growing for 48 years, youve
  got to hand it to the guys in Austin, MN.

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• Big Returns From A Small City

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• There are 24,000 people in Austin, MN. And as
  you might imagine, Hormel is the largest
  employer. Just like the small city where its
  based, Hormel is quiet, cautious, and careful.
  But its not asleep at the wheel.

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• The company has made some intriguing
  acquisitions. Earlier this year, it bought
  Applegate Farms. Adding the Applegate brand,
  known for organic food products, is a smart move.
  

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• Hormel is paying attention to a consumer market
  thats shifting toward more organic foods. One
  other interesting thing about Hormel. The
  largest shareholder isnt one of the big mutual
  funds like Fidelity or Vanguard.

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• Vanguard is the second largest shareholder, but
  number one is The Hormel Foundation. It owns 128
  million shares, more than 10 times what Vanguard
  owns. What does this mean for dividend investors?

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• Hard to say with 100 assurance, but when a large
  block of stock is held by a foundation, theres a
  good chance the trustees are content to sit back
  and let it grow.

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• This can take speculative pressure off the stock,
  and give you some insulation from the inevitable
  ups and downs.

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• Cooking Up Dividends Low And Slow

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• Turn down the heat on yield. Take a closer look
  at stocks that pay small dividends. Thats how
  you turn up gems like Hormel. Youll find some of
  the best dividend stocks to buy on the lineup of
  the SP 500 Dividend Aristocrats.

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• In fact, 16 of these outstanding stocks pay a
  yield of less than 2. Dividend stocks like
  Walgreens WBA, McGraw Hill MHFI, and
  Sherwin-Williams SHW. Look beyond the low yield.
  

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• Take a look at the dividend growth and the
  dividend payout ratio. Thats how youll find
  terrific opportunities.

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• A plump and moist Jennie O Turkey packed with
  your favorite stuffing...it doesnt get much
  better. And it doesnt get much better for
  dividend investors than a stock like Hormel.

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