Hershey: Strong Cost Advantages Will Power The Company Forward

5/28/20

The Hershey Company (NYSE:HSY) is a strong investment choice due to its high returns on capital stemming from cost advantages. The company also has a steady track record of growth with initiatives in investing for the future. Potential investors would have to pay forward 15.7x EV/EBITDA for a company with a much stronger upside than its peers. Despite some risks navigating through the current uncertainty, Hershey has ample free cash flow ($1B annually) to raise capital if necessary.

Hershey's has well-known brands throughout the world like Hershey's and Reese's and Kisses. But the company is especially dominant in the United States chocolate market, where it holds over 40% market share. According to research, the company is also ranked 4th and 5th as the most loved brands by kids and parents, respectively.

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