Group 1 - Hershey shares declined as traders reacted to news indicating a lower likelihood of a merger with Mondelēz International [1][4] - Mondelēz announced a focus on acquiring brands that are easier to integrate, alongside a stock buyback plan [2][3] - Hershey previously rejected a low acquisition offer from Mondelēz, which had attempted a takeover in 2016 [3][4] Group 2 - Following the news, Hershey's shares fell approximately 3%, while Mondelēz shares increased by a similar percentage [4]

Core Insights - The Hershey Company (HSY) has experienced an 11% decline in stock over the past three months, underperforming the broader industry and the Zacks Consumer Staples sector, while the S&P 500 increased by 6.2% during the same period [1][3]. Group 1: Consumer Trends and Market Challenges - Hershey is facing a challenging environment due to historically high cocoa prices and a budget-conscious consumer base, leading to a decline in total snacking consumption as consumers prioritize value [3][4]. - Shifts in shopping behavior towards club, dollar, and online channels, where Hershey's products are less developed, are complicating the company's market position [4]. - The company's third-quarter net sales fell by 1.4%, driven by soft consumption trends, reduced retailer inventories, and seasonal shipment delays [5]. Group 2: Financial Performance and Margin Pressure - Hershey's adjusted gross margin contracted to 40.3%, a decrease of 460 basis points, due to increased commodity costs and unfavorable timing of input costs [6]. - The adjusted operating profit fell by 13.2% to $654 million, with the operating profit margin contracting by 300 basis points to 21.9% [6]. - Management anticipates a decline in the 2024 adjusted gross margin by nearly 250 basis points, influenced by reduced volume outlook and persistent inflation on key ingredients [7]. Group 3: Revised Guidance and Future Outlook - Hershey has lowered its 2024 sales guidance to nearly flat year-over-year, down from a previous forecast of around 2% growth, due to competitive pressures and lower-than-expected retailer inventory levels [8]. - The company now projects a mid-single-digit decline in full-year adjusted EPS, a revision from an earlier outlook that anticipated only a slight decline [9].

Group 1: Sugar Consumption and Market Impact - Americans consume about 17 teaspoons of added sugar daily, exceeding the recommended amount by five teaspoons [1] - The high sugar intake benefits companies that produce sugary products, allowing them to pay substantial dividends to investors [2] Group 2: Coca-Cola Overview - Coca-Cola is a leading global beverage company known for its sweetened soft drinks and other beverage brands [3] - The company has increased its dividend payment for 62 consecutive years, qualifying it as a Dividend King [4] - Coca-Cola paid $8 billion in dividends last year and has distributed over $80 billion to shareholders since 2010 [4] Group 3: Coca-Cola Financial Performance - Coca-Cola's current dividend yield is approximately 3%, significantly higher than the S&P 500's yield of around 1.2% [5] - The company expects organic revenue growth of 4% to 6% annually, which should drive 7% to 9% annual earnings-per-share growth in the long term [6] Group 4: Hershey Overview - Hershey is the top confectioner in the U.S. and the second-largest player in the snacking industry, with well-known brands like Hershey's and Reese's [7] - Hershey's dividend yield is also over 3%, and it has increased its dividend for 15 consecutive years, growing at more than 10% annually over the past decade [8] Group 5: Hershey Growth Strategy - Hershey targets 2% to 4% annual net sales growth and 6% to 8% adjusted earnings-per-share growth in the long term [8] - The company is investing in innovative product development and pursuing acquisitions, such as the recent acquisition of Sour Strips, to enhance its product portfolio [9] Group 6: Investment Appeal - Both Coca-Cola and Hershey generate significant revenue from sugar products, enabling them to provide attractive dividends [10] - Their strong track records of dividend growth suggest continued appeal for investors seeking passive income [10]

Group 1 - The article introduces Michael Duke as a new contributing analyst for Seeking Alpha, highlighting his expertise in investment analysis and portfolio management [1] - Michael Duke has a strong background in equity and real estate markets, focusing on identifying opportunities that provide safe and growing dividends [2] - He has successfully sourced over $100 million in commercial real estate investments while serving as an analyst and acquisitions director at BridgeCap Partners [2] Group 2 - The article emphasizes that past performance is not indicative of future results, and no specific investment recommendations are provided [4]

Market Overview - The US confectionery sector is projected to grow from $47.9 billion in 2023 to $56.1 billion in 2028, representing a CAGR of 3.2% [1] - In volume terms, the sector is expected to increase from 3.04 billion kg in 2023 to 3.26 billion kg, with a CAGR of 1.4% [1] Category Insights - Chocolate is the largest category in both value and volume within the US confectionery market [2] - Per capita consumption of confectionery in the US exceeds regional and global levels [3] Distribution Channels - Hypermarkets and supermarkets are the leading distribution channels, holding a value share of 38% in 2023 [3] Competitive Landscape - The Hershey Company holds a significant market position with a value share of 24.2% in 2023 [3] - Top companies in the US confectionery sector include The Hershey Company, Mars, and Ferrero [2] Market Analysis - The report includes a detailed analysis of market size, growth comparisons, and category performance [4] - It covers segment-level analysis for categories such as chocolate, gum, and sugar confectionery in both value and volume terms [5] Demographic and Economic Factors - The report analyzes key macroeconomic indicators including GDP growth, consumer price index, and demographic trends [3][5]

Group 1 - KIT KAT® has launched its first-ever seasonal shape, KIT KAT® Santas, available for a limited time during the holiday season [1][2] - The new product features a unique design with imprinted boots and a jolly smile, along with a crispier wafer-to-chocolate ratio compared to traditional KIT KAT® bars [1][3] - KIT KAT® is partnering with Simon Property Group to distribute free KIT KAT® Santas to visitors at the "Santa Photo Experience" on December 7 and 8, enhancing the holiday experience [3] Group 2 - KIT KAT® Santas are available in 8.85oz snack size bags at nationwide retailers, aligning with the holiday season [3] - The Hershey Company, which owns the KIT KAT® brand, generates over $11.2 billion in annual revenues from more than 90 brand names across approximately 80 countries [4] - Hershey has a long-standing commitment to ethical and sustainable operations, with a focus on helping children succeed through equitable access to education [5]

Group 1 - The article discusses the increasing political nature of opinion pieces in recent weeks, leading to a temporary withdrawal from reading them [1] - The author emphasizes a focus on in-depth research related to various investment vehicles such as REITs, mREITs, Preferreds, BDCs, MLPs, and ETFs [1] Group 2 - There is a mention of a free 2-week trial for in-depth research services, highlighting the positive feedback with 438 testimonials, most being 5 stars [1] - The article clarifies that the author has no financial positions in the companies mentioned and expresses personal opinions without external compensation [1]

Core Viewpoint - The article highlights two quality businesses, Realty Income and Hershey, which currently offer attractive dividend yields and may be undervalued despite recent market highs. Realty Income - Realty Income is a leading real estate investment trust (REIT) with a 55-year history of paying dividends, required to distribute at least 90% of its taxable income to investors [2][3] - The company has a diversified portfolio of over 15,400 properties, with major clients including FedEx, Wynn Resorts, Walmart, and Home Depot, indicating strong tenant quality [3][4] - Realty Income plans to invest $3.5 billion in new properties in 2024 and expects adjusted funds from operations per share to increase by nearly 5% [5] - The current monthly dividend is $0.2635 per share, with a forward yield of 5.41%, as the stock is trading 28% below its recent highs [6] Hershey - Hershey is a leading confectionery brand with a portfolio that includes well-known products like Reese's and Kit Kat, but its stock is down about 35% from its peak due to recent weakness in discretionary spending [7][8] - Despite challenges, Hershey anticipates a 1% revenue increase for the year, with adjusted earnings expected to be $9.40, while paying a quarterly dividend of $1.37 per share, resulting in a forward yield of 3% [8] - The confectionery market is valued at $586 billion and is projected to grow at a compound annual rate of 5.4% through 2029, indicating long-term demand for Hershey's products [9] - Current inflationary pressures are affecting Hershey, but this situation presents a potential buying opportunity for investors, as the high dividend yield may be seen as a bargain in the future [10]

Core Insights - The Hershey Company has acquired Sour Strips, a rapidly growing sour candy brand known for its strong social media presence, enhancing Hershey's offerings in the candy category and reaching new consumers for snacking occasions [1][2] - Sour Strips was founded in 2019 by social media personality Maxx Chewning, who will continue to lead marketing and innovation efforts for the brand under Hershey [1][2] - The acquisition aligns with Hershey's strategy to accelerate growth in the sweets segment and innovate within the confectionery category [2] Company Overview - The Hershey Company is a leading snacks company with over 20,000 employees globally, generating more than $11.2 billion in annual revenues from over 90 brand names in approximately 80 countries [3] - Iconic brands under Hershey include Hershey's, Reese's, Kisses, Kit Kat®, Jolly Rancher, Twizzlers, and various salty snacks [3] - Hershey has a long-standing commitment to ethical and sustainable operations, with a focus on helping children succeed through equitable access to education [4]

Core Insights - Hershey's earnings and revenue were negatively impacted by historically high cocoa prices and soft consumer demand [1][2] - The company reported a decline in sales for two of its three business units [1] - Hershey has lowered its full-year sales and earnings forecast [1] Financial Performance - Hershey reported adjusted earnings per share (EPS) of $2.34 for the third quarter, with revenue decreasing by 1.4% to $2.99 billion, both figures falling short of forecasts [1] - The full-year sales outlook has been revised to "flat" from a previous expectation of a 2% gain, with adjusted EPS growth now projected to be "down mid-single-digits" percent compared to earlier expectations of "down slightly" [1] Segment Performance - Sales in the North American confectionery segment increased slightly by 0.8%, while the salty snacks unit experienced a significant decline of 15.5% [2] - International sales also saw a decrease of 3.9% [2] Stock Performance - Hershey's stock fell by 2.3% on Thursday and has declined approximately 7% year-to-date, reaching its lowest levels in three years [3]