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.
