Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Three Predictions for Hershey Co (HSY) Stock

Page 1 of 2

When it comes to investing in big, publicly owned candy companies, investors don’t have a lot of options to choose from. The giants of the industry, including Mars, Kraft — now Mondelez International Inc (NASDAQ:MDLZ) — and even Berkshire Hathaway Inc. (NYSE:BRK.A), have gobbled up most of the small fries, absorbing once-famed small-batch brands into the conglomerate that is Big Candy.

Probably the best-known, still-independent candy concern out there that’s still investable is Hershey Co (NYSE:HSY). But is Hershey Co (NYSE:HSY) stock worth investing in? Let’s find out. We’ll start off with a couple of predictions from the professionals on Wall Street, and then I’ll give you a prediction of my own.

The Hershey Company (NYSE:HSY)

Prediction No. 1: So-so sales
Wall Street analysts see Hershey Co (NYSE:HSY) growing its sales by about 23% over the next five years. That’s roughly equal to the projections for industry giant Mondelez, at 23%, but it’s also a bit surprising. Mondelez International Inc (NASDAQ:MDLZ)’s annual sales are already more than five times bigger than Hershey’s — $35 billion, versus only $6.6 billion.

Ordinarily, you’d expect Mondelez International Inc (NASDAQ:MDLZ) to be running into the “law of large numbers” right about now and struggling to outgrow smaller Hershey, which presumably has more room to grow. But it’s not. It’s actually expected to outperform Hershey slightly in the growth race.

At the same time, tiny Tootsie Roll Industries, Inc. (NYSE:TR) may see its sales grow as little as 13% through 2016. Could it be that in the candy industry, bigger is better? Does Hershey lack the scale to compete effectively against mammoth Mondelez?

Prediction No. 2: Smarter earnings
Or is Hershey just growing smarter than Mondelez? A chart of how these three candy companies’ earnings are expected to perform in coming years suggests this possibility — because even if Mondelez grows sales growth faster than Hershey Co (NYSE:HSY) does in future years, analysts expect Hershey stock to be far and away the faster grower of profits.

On average, the consensus of analyst estimates says that Hershey’s earnings will rise 68% over the next five years, while Mondelez settles for 39% growth, and little Tootsie Roll Industries, Inc. (NYSE:TR) ekes out a living on just 15% growth.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!