Hormel Foods

Methodology

Hormel's packaged meat products business generates relatively stable earnings from branded proteins and prepared foods with some exposure to pork commodity prices. The company's brands like SPAM and Jennie-O provide pricing power. This calculation works moderately well during stable periods, though commodity volatility and changing consumer preferences toward plant-based proteins create challenges for traditional meat processors.

Methodology

Hormel often shows elevated PEG ratios given modest growth in mature branded meat categories. The company's value lies more in dividend reliability and portfolio management than growth prospects. For mature protein companies facing evolving dietary trends, valuation based on cash flow generation and brand durability matters more than earnings growth multiples.

Methodology

Hormel's meaningful dividend yield with dividend aristocrat status is central to the investment thesis for this mature food company. The company has delivered decades of consecutive dividend increases despite category challenges. PEGY is essential for properly valuing Hormel, where reliable dividend growth provides most of the total return given limited organic growth opportunities in traditional packaged meats.