Last year for the Fourth of July I paid homage to three iconic American companies, Corning Inc. (GLW) , Hershey Co. (HSY) and Harley-Davidson Inc. (HOG) . The three have had their share of ups and downs over their long and storied histories, but they also have stood the test of time. In what has been an up-and- down 12 months for the markets, this trio has shown their resiliency overall, rising an average of 21% versus 9% for the S&P 500.
Hershey has been the big winner, up 51%, recently hitting an all-time high and breaking out of a range after trading this time last year at 2013 levels. The chocolate giant has delivered three earnings surprised in the past four quarters and raised its quarterly dividend 10% last August. That was the tenth consecutive year of dividend increases.
Hershey shares currently trade at about 22.5x next year's consensus estimates, well above the 16.5x level where they traded at this time last year, so the stock is not the bargain it was then. Interestingly, while markets were swooning last December, Hershey was holding steady, all but unaffected by the market mayhem and showing the benefits of being a non-cyclical.
Corning (up 24%) has had an up-and-down year but has rallied 17% since late May. The maker of specialty glass has boasted mild earnings surprises in every quarter over the past year and is enjoying a streak of 12 consecutive quarters of surprises. Still reasonably priced at 15x next year's consensus earnings estimates, GLW hiked its dividend 11% early in 2019 and currently yields 2.4%. It has doubled the dividend since 2014, and quadrupled it since 2011. In addition, Corning aggressively has bought back stock in recent years, reducing its shares outstanding by nearly 48% since 2013 and by 4% in the first quarter of 2019.
By contrast, Harley-Davidson has struggled over the past year, falling about 13%. Beset by changing demographics and trade war/tariff fallout, HOG shares are trading at the same level they did back in 2011. Currently trading at just over 9x next year's consensus estimates, markets are pricing in fears and skepticism. Dividend increases have slowed in the past few years; early in 2019, the company increased its payout by 1.4%. Also actively repurchasing stock over the years, Harley-Davidson has reduced its share count by 30% since 2013. As mentioned in a recent column, HOG is in my crosshairs and one name I plan to nibble on.
