HRL — 3 entries on this page, 0 of them a change of direction.
We have the HRL, which looks also beautiful, but I think it's a big stop. Beautiful short. Stop. Maybe that's your target. Prior low, basically. Around 20 bucks.
Other companies, Thursday before market open, we have Hormell, ticker symbol HRL. This is a dividend stock many people own. I'll likely not be covering it later this week, but it has a long history of dividend increases.
Dividend growth has slowed down, though. I think they were growing it far too aggressive for a number of years. It wasn't backed up by the fundamentals. The past 5 years, it's grown at 3.6% compound annual growth rate.
The stock price is low, so it does look like it's trading at historically high yield in the 90th percentile, 4.86%. So it does look historically high, but the problem is that the payout ratio is getting in a not good range for Hormell stock. 118% free cash flow payout ratio in recent year, 132% based on earnings payout ratio.
And over the past decade, free cash flow hasn't grown at all at Hormill. And it's in a downtrend currently, but starting to uptick in the latest quarter. Operating cash flow completely flat over the past 10 years.
So, in my opinion, if your goal is total return, I don't think Hormell is very attractive at the current price. If the company's cash flows and dividends aren't going to be growing at a high rate, you need to buy it super cheap for it to be a good investment.
uh why not go private with Hormel Foods and and flip it back onto the markets later if that's if that's something that they desire? Cuz it seems like they were getting a they must have been getting a pretty good price.
Lots of free cash flow that can certainly support a buyout. Why not take it private?
