Is HRL a good stock to buy? We came across a bullish thesis on Hormel Foods Corporation on The Boring Finance Guy’s Substack. In this article, we will summarize the bulls’ thesis on HRL. Hormel Foods Corporation’s share was trading at $23.05 as of March 25th. HRL’s trailing and forward P/E were 24.88 and 15.27 respectively according to Yahoo Finance.
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Hormel Foods Corporation (HRL) is undergoing a strategic transformation from a traditional commodity processor into a global branded food company through its “Invest, Transform, Grow” initiative. The company operates across three segments: Retail, which generates 62% of sales through iconic brands like SPAM, Skippy, Planters, Jennie-O, and Applegate; Foodservice, contributing 32% of sales with high-margin, labor-saving solutions for restaurants, schools, and hotels; and International, representing 6% of sales with global exports and joint ventures such as MegaMex.
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Despite recent challenges, including impairments in the International segment and margin compression to ~8.4% adjusted, HRL maintains strong brand equity and market presence, with products in ~84% of U.S. households and durable switching costs in Foodservice. Its Foodservice business continues to outperform, benefiting from robust demand for labor-saving products.
The company’s “Transform and Modernize” program targets $250 million in operating income growth by 2026 through supply chain automation, portfolio simplification, and operational efficiency, while international expansion and innovation in snacking brands like Planters offer additional upside. HRL also preserves a 4.8% dividend yield, providing a reliable income floor for investors.
While current ROIC is depressed at ~6.7% due to past capital misallocation and restructuring, the strategic initiatives aim to restore profitability and enhance shareholder value over the next 2–3 years. Hormel’s combination of resilient brands, growth potential in Foodservice, and disciplined execution of its transformation plan positions it for long-term appreciation, making it particularly attractive to income-oriented portfolios willing to wait for strategic execution to bear fruit.
Previously, we covered a bullish thesis on Cal-Maine Foods, Inc. (CALM) by Charly AI in April 2025, which highlighted growth from elevated egg prices, efficient operations, and cage-free investments. CALM’s stock price has depreciated by approximately 15.72% since our coverage as egg prices normalized, compressing earnings expectations. The Boring Finance Guy shares a similar view but emphasizes Hormel Foods Corporation’s (HRL) transformation and resilient Foodservice segment, making it attractive only to income-oriented portfolios willing to wait 2–3 years.
