Sneak Peek: A Great Stock From The Crow's Nest

Written By Adam English

Updated December 19, 2019

Today we’re bringing you a stock our resident dividend expert — Jimmy Mengel — shared as an example of a great stock that can drive portfolio growth while returning cash or increasing position size with reinvested dividends.

The one-year comparison against the S&P 500 says it all:

hsy chart

The Crow’s Nest has done fantastically well, with the open portfolio up over 49% and the 2019 closed positions up 54%. If you’re interested in stocks like these, you can always get on board.

Take care,

Adam English
Editor, Outsider Club

crows nest logo

People love chocolate. Americans eat nearly 20% of the world’s chocolate — or around $18.27 billion. That helps make The Hershey Company  (HSY) a dividend machine. It has paid a higher dividend every year since 2009 and has maintained or grown its payout every year since 1930 — the year that the Great Depression began.

Hershey has stood the test of time. In good times — and in horrible times — people still splurge for the creature comforts of chocolate. Well-branded consumer foods companies like Hershey are known for their stability. They have existing relationships with retailers to make sure that when you buy a candy bar, Hershey is the first product you see.

Sure, Hershey could coast on its brand. But it isn’t resting on its rich, chocolate laurels. In the past five years, the company has invested over $3 billion into marketing and research and development. Its rivals could only dream of catching up to that. It has made Hershey the biggest player in North American chocolate with a 45% market share.

In the last quarter, cost cuts amplified gross profitability wins, leading to a 9% increase in operating profit after adjusting for unusual items. Oh, and its gross margins came in at 49.5% in the 2019 second quarter, compared to 45.3% during the same time last year. Net income topped $312.8 million, or $1.48 per diluted share, a 38% jump year over year. Not too shabby…

To get more insights and full issues from Jimmy, check out this Special Presentation from The Crow’s Nest.