Hormel Foods

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Hormel Foods ( HRL) is another food stock that looks likely to boost its dividend payout in the next quarter. Right now, Hormel pays a 15-cent per share payout that equates to a 2% dividend yield at current price levels.

Like Campbell Soup, Hormel is a diversified food manufacturer with brands like Jennie-O and Country Crock under its belt. But despite the diversification, at the end of the day, Hormel is a meat company. The firm is a major turkey and hog processor, but they've avoided the lion's share of input costs by embracing vertical integration. Since HRL itself raises the animals that it sells on grocery shelves, it's able to save costs and absorb more inflation in its cost of goods sold without impacting its selling price.

The food processing business is capital intense, but Hormel is in strong shape. The firm has close to a billion dollars in cash and investments, easily offsetting a $250 million debt load. That abundance of balance sheet liquidity helps to ensure that the firm can continue to pass on more cash to its investors in the coming quarters. Like CPB, Hormel announces its numbers on Nov. 20.

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-- Written by Jonas Elmerraji in Baltimore.


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At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.

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