Hormel Foods Corporation (HRL): A Bull Case Theory

We came across a bullish thesis on Hormel Foods Corporation on Phaetrix Investing’s Substack by Phaetrix. In this article, we will summarize the bulls’ thesis on HRL. Hormel Foods Corporation's share was trading at $24.61 as of January 30th. HRL’s trailing and forward P/E were 18.00 and 15.90 respectively according to Yahoo Finance.

Hormel Foods Corporation develops, processes, and distributes various meat, nuts, and other food products to foodservice, convenience store, and commercial customers in the United States and internationally. HRL stands out as a resilient consumer staples powerhouse, having raised its dividend for 59 consecutive years, demonstrating remarkable consistency through commodity shocks and evolving consumer trends.

As of October 2025, the company pays a quarterly dividend of $0.29, yielding 4.85%, offering investors dependable income that outpaces inflation without speculative risk. The dividend is supported by a payout ratio of approximately 84%, comfortably covered by free cash flow generated from iconic brands such as Spam, Jennie-O, and Skippy.

Hormel’s operations are highly reliable, consistently generating cash even in challenging market conditions, underscoring the company’s status as a dependable cash-flow generator. Management expects 3–4% annual dividend growth, underpinned by efficiency improvements and international expansion initiatives, which are likely to drive sustainable long-term compounding for shareholders. While rising input costs pose a risk, Hormel’s diversified protein portfolio and solid balance sheet help maintain stable margins, providing a buffer against volatility in commodity markets.

The company’s combination of resilient demand, operational efficiency, and disciplined capital allocation positions it as a bedrock income stock for long-term investors seeking low-risk, inflation-resistant returns. Overall, Hormel offers a compelling investment case for those prioritizing stability and predictable cash flows, with the potential for steady dividend growth and minimal downside risk, making it an attractive holding within the consumer staples sector.

Previously, we covered a bullish thesis on Cal-Maine Foods, Inc. (CALM) by Charly AI in April 2025, which highlighted growth from elevated egg prices, efficient operations, and cage-free production investments. CALM’s stock has depreciated by approximately 9.87% since our coverage due to price normalization and margin pressures. Phaetrix presents a similar thesis on Hormel Foods (HRL), focusing on resilient cash flows and consistent dividend growth.

Hormel Foods Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held HRL at the end of the third quarter which was 38 in the previous quarter. While we acknowledge the potential of HRL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.