Income is central to my investment philosophy. Dividends help to mitigate risk, provide return when the overall market is stagnant, and provide income for reinvestment. I follow a group of stocks that have a long history (25+ years) of raising dividends. When a company is at or near 52-week lows, I look at the company’s financials to determine if it is still a viable investment. I detail this process in more detail in my book, The Lifetime Income Security Solution. 

Currently, Hornel Foods (HRL) is forming a bottom:

After gapping lower at the end of August, HRL consolidated losses between 30-32.It is currently at the upper end of its recent trading range.The MACD indicates momentum is shifting, implying a fair amount of upside potential.

The company is in the consumer staples sector:

Hormel Foods Corporation, a Delaware corporation (the Company), was founded by George A. Hormel in 1891 in Austin, Minnesota, as Geo. A. Hormel & Company. The Company started as a processor of meat and food products and continues in this line of business. The Company’s name was changed to Hormel Foods Corporation on January 31, 1995. The Company is primarily engaged in the production of a variety of meat and food products and the marketing of those products throughout the United States and internationally. Although pork and turkey remain the major raw materials for its products, the Company has emphasized for several years the manufacturing and distribution of branded, value-added consumer items rather than the commodity fresh meat business. The Company has continually expanded its product portfolio through organic growth, new product development, and acquisitions.

While this is certainly not the most exciting business, it is a necessity, which provides protection in weaker economic environments. There is also a large amount of competition in this space. Hormel’s primary advantage is size, which means it not only has economies of scale but the ability to simply out-muscle or purchase competition.