Hormel's shift to branded food pays off with steady growth and dividends

Hormel Foods is transitioning its focus to branded food products, moving away from commodities. Under interim CEO Jeff Ettinger, the company has maintained steady growth, achieving five consecutive quarters of organic sales increases.

Meanwhile, Altria continues to rely on price increases and share buybacks to support its dividends. Both firms offer high yields, but their business models differ sharply in stability and long-term outlook.

Hormel Foods has established itself as a reliable dividend stock. With a yield of around 5%, it has consistently raised payouts for over 50 years, earning its status as a Dividend King. However, the company now faces pressure from rising costs that are challenging to pass on to consumers.

Under Ettinger's leadership, Hormel has recorded five consecutive quarters of organic sales growth. The shift towards branded products aims to bolster margins and reduce reliance on volatile commodity markets.

Altria, conversely, maintains a higher yield of 6.3%. But its core business—cigarettes—is in decline, with sales volumes dropping by 10% in 2025 alone. To counteract falling demand, the company has turned to regular price increases and aggressive stock buybacks. These strategies have helped sustain earnings and dividend growth, at least for the time being.

Hormel Foods remains a more stable dividend option due to its diversified food business and long track record. Its recent sales growth suggests resilience, though cost pressures persist. Altria's higher yield, however, depends on a shrinking market, making its future payouts less certain than Hormel's.