The Hershey Company (NYSE:HSY) is a big name in the sweet snacks world. It’s known for its famous products like Hershey’s chocolate bars, Reese’s cups, and Kisses. Recently, we looked at how Hershey stacks up against other top packaged food stocks.
The packaged food market in the U.S. is booming. A recent report showed it was worth $1.03 trillion in 2021 and is expected to grow at nearly 5% every year until 2030. Busy lifestyles are pushing more people to choose convenient food options. E-commerce is also boosting food sales as buying online becomes increasingly popular. As consumer preferences evolve, the rise in plant-based products and innovative packaging adds to the industry’s appeal.
A research team from BofA Securities recently analyzed how consumer staples, including Hershey, could perform during a recession. They found that these companies often do better than the S&P 500 in tough times. This is likely because people still buy their everyday needs, like food. However, they also warned that, right now, sales growth isn’t as strong due to high prices and sluggish volume growth, which could pose challenges in the future.
Interestingly, during economic downturns, stock prices in this sector often depend more on earnings per share rather than just sales growth. Yahoo! Finance noted that earnings play a huge role in how stock prices move, especially in the packaged food, beverages, and personal care sectors. Analysts suggest that solid financial health, the ability to manage increasing costs, and a strong domestic manufacturing presence can greatly influence stock performance, especially now with tariffs affecting prices.
Hershey seems to be holding steady despite challenges like a cocoa shortage, with 2024 revenues of around $11.2 billion. This shows how strong its brand is, with many still eager to buy its chocolates. The company has also managed to increase its dividend for 15 straight years, making it a reliable option for investors. Recently, Hershey announced it would acquire LesserEvil, a brand known for healthier snacks, which aligns with their strategy to broaden their snack offerings.
While Hershey is ranked 10th among the best packaged food stocks, some believe that other sectors, like artificial intelligence, might offer better returns in the near future. As the market evolves, keeping an eye on consumer trends, economic indicators, and innovative strategies will be key for both investors and companies like Hershey.
For more information on the consumer staples sector, check out BofA’s detailed analysis here.
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Source linkThe Hershey Company, Consumer Staples, packaged food, compound annual growth rate, sector analysis
