There are many reasons to like Coca-Cola’s stock (NYSE: KO), such as its status as a Dividend King and its high 3% dividend yield. However, there is another high-yield consumer staples stock that is also a Dividend King: Hormel Foods (NYSE: HRL).
Coca-Cola is a well-established company known for selling flavored water, with an impressive history of 61 consecutive years of annual dividend increases. While it has proven itself to be a reliable investment for dividend investors, Hormel Foods may be a better option for those who are willing to take a contrarian approach.
Investors have been downbeat on Hormel due to various challenges, such as difficulties passing on inflation-driven price increases, challenges in its turkey operations due to avian flu, and weak performance in the nut segment following the Planters acquisition. Additionally, growth in China has not met expectations post-COVID-19 lockdowns.
Despite these challenges, Hormel’s track record as a Dividend King suggests that it has the resilience to overcome these obstacles. If the company can navigate through these issues, it may see an increase in its stock valuation.
While Coca-Cola is a solid choice, Hormel may be more appealing to contrarian and value investors due to its strong business track record, higher absolute yield, and historical yield. For those looking to buy stocks when others are selling, Hormel could be the better pick for their portfolio.
In conclusion, while investing in Coca-Cola is not a bad decision, those seeking a contrarian or value-focused approach may find Hormel Foods to be a more attractive option.