Hormel Foods is celebrating its 124th year anniversary with a bang after its board of directors approved a 2-for-1 stock split — the 10th time since the company was conceived.
The board announced the stock split on Wednesday, but the big move will be considered during the annual meeting of the Austin, Minnesota-headquartered company, per CNBC.
"This decision acknowledges our track record of providing our shareholders solid long-term returns and demonstrates our confidence that we will continue to grow our sales and earnings in the future," Hormel Foods CEO and Chairman Jeffrey M. Ettinger said in a statement.
Ettinger also added, "In addition, we anticipate this will also put our stock price in a more attractive trading range for a number of individual investors."
Although Hormel Foods' shares were not active in the premarket trade, they still managed to close at $71.23 on Tuesday.
This is not at all surprising however since Hormel shares were up by 39 percent this year, beating S&P 500's 1.5 percent increment, according to Fox Business.
Additionally, the skyrocketing shares proved to be the highest for the Spam canned ham maker. The outstanding results were even better than expected for this year.
Hormel recognized the primary contributing factors of its strong fourth quarter shares saying that it was the strong demand for Dinty Moore canned stew, Hormel Chili and Wholly Guacamole dips, Green Field Reporter has learned.
Earlier this year, Hormel bought Applegate, which is known for being a maker of hot dogs, deli meats, sausages, and bacon that do not have artificial ingredients.
For its fourth quarter earnings, Hormel reported $187.2 million or 69 cents per share. Meanwhile adjusted figures were 74 cents per share, beating the expectations of Wall Street.
This year alone, the total earnings of Hormel amounted to $686.1 million or $2.54 per share. Its revenue is $9.26 billion.
Given all these, it is not surprising that Hormel authorized a 2-for-1 stock split, which is a move that would provide every shareholder with additional share for each stock they posses.
Because of the strong figures, Wall Street even listed Hormel Foods Corp. as one of the companies with stocks to watch out for in the active trade. Other companies that Wall Street Journal's blog listed were Deere & Co. and Donaldson Co.
Deere is known for being the world's largest seller of harvesting equipment and tractors, while Donaldson is known for producing and manufacturing products used in improving air quality.