Buy This Dividend Stock To Add A Chocolate Flavor To Your Retirement Portfolio

The Hershey Company (HSY) reported strong financial performance for the third quarter of 2012, along with raising its full-year guidance. In the long term, the company offers strong sales growth of 5%-7% and earnings growth of 10%. With a decent dividend yield of 2.4%, we reaffirm our buy rating on the stock. The recent dividend hike makes it a great stock to add to one's retirement portfolio.

The Hershey Company reported its third-quarter performance last week. It is North America's largest quality chocolate producer. It is the global leader in sugar confectionery and chocolate products, and has total annual sales of more than $6 billion. For Q3 2012, the company reported net sales of $1.75 billion, representing an increase of 7.5% year over year. The increase in sales was due to a price and volume increase of 3.9% and 2.1%, respectively. This is a positive sign for the company, reflecting that the company has strong brand image and market power, as it was able to pass on the commodity price increase to consumers, alongside increasing sales volume. Adjusted earnings per share for the company were $0.87 in Q3 2012, representing an increase of 3.6% year over year.

The company has a forward P/E of 19 times, which is supported by the higher growth rate of 10% per annum for the next five years. The company also has a high ROE of 66% and a PEG of 2.2.

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