Morningstar Rating

Stock Research and Analysis

by Ken Perkins

Bulls Say

Superior brand recognition and convenient value-added products allow Hormel to introduce new products and charge higher prices for its products than its meat processing peers.
Hormel's vertically integrated supply chain allows for scale efficiencies that keep new entrants at bay.
The company's steady growth in economic booms and busts as well as its history of increasing its dividend every year for the past 47 years makes Hormel a good investment. Read more 

Bears Say

Spending on product innovation and marketing support will be necessary, given intense competition in the industry, which could challenge Hormel's short-term competitive advantages in the longer term.
Surging price inflation for soybean and corn commodities could dramatically increase Hormel's feed costs and pressure margins.
The negotiating leverage of retailers has increased at the expense of packaged meat companies and could make raising prices even more difficult for Hormel in the future. Read more 

Management

Jeffrey Ettinger has spent more than 20 years with Hormel, assuming the positions of chairman, president, and CEO in 2006. We think his experience working in the Jennie-O Turkey Store segment should serve the firm and its shareholders well, although   Read more 

Profile

Hormel manufactures and distributes value-added meat products consisting primarily of pork and turkey. A large portion of the company's revenue comes from fresh meats (51%   Read more 

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