A Good Stock for Dividend Reinvestment

Hormel Foods (HRL) products are familiar to anyone who has strolled through a grocery store. Hormel® Chili, Dinty Moore® Beef Stew, SKIPPY® peanut butter, and Applegate® products, to name just a few, can be spotted in nearly every cart.

The company was founded in 1891, and the company became a publicly traded firm in 1928.

After the market crash in 2008, the stock set a low on December 3rd, 2008, closed above the 200-day moving average in early 2009, and has pretty much stayed above it ever since. HRL's 450% gain over those 2,544 days represents an annualized average gain of 65% a year.
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After that nearly 7 year climb, Hormel's dividend yield works out to 1.5%. At first, that doesn't sound like much. But Hormel has raised its dividend for 48 consecutive years (that streak started when the average cost of a new house was $14,250, the average income per year was $7,300, and the movies “The Graduate”, “Bonnie and Clyde”, and “Cool Hand Luke” came out).

Even better, Hormel's 5-year average dividend growth rate is an impressive 19%.

Let's say the stock goes nowhere for 10 years. But with dividend reinvestment, and assuming the current 19% growth a year of the dividend is maintained, the original investment could be returning 11.7% a year after 10 years. You would have decent income if you started pocketing the dividends, or you could continue to reinvest the dividends for larger gains in the future (the table below gives a general idea, since it assumes only a yearly dividend distribution and only whole shares are bought. In reality, you would get quarterly dividends, and may be able to buy fractional shares, which would compound the results producing even larger gains. I'll refine my spreadsheet over time).

The gains from just dividends could be 54%. Any gains on the stock price would be icing on the cake.

Actually, I added HRL to the Seasonal Forecaster portfolio on September 9th, due to its strong fundamentals, good technical setup, and strong seasonal pattern. This position is already sporting a gain of 9.6%, including the dividend paid last week. But HRL has just stepped up to new highs, and it is worth considering for new positions or adding-to existing positions.

Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day.  To find out more, please click on the following link: www.markettamer.com/seasonal

By Gregg Harris, MarketTamer Chief Technical Strategist

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Gregg Harris is the Chief Technical Strategist at MarketTamer.com.

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MarketTamer is not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. Further, owners, employees, agents or representatives of MarketTamer are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory.


This company makes no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended in this email, and makes no representations or warranties concerning said company or entity’s compliance with applicable laws and regulations, including, but not limited to, regulations promulgated by the SEC or the CFTC. The sender of this email may receive a portion of the proceeds from the sale of any products or services offered by a company or entity mentioned or recommended in this email. The recipient of this email assumes responsibility for conducting its own due diligence on the aforementioned company or entity and assumes full responsibility, and releases the sender from liability, for any purchase or order made from any company or entity mentioned or recommended in this email.


The content on any of MarketTamer websites, products or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options and other securities involves risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities is not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options. The www.MarketTamer.com educational training program and software services are provided to improve financial understanding.


The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.