Halloween is upon us again, and as most people know, it signals the official start of holiday season. Consumers are enticed earlier and earlier every year to spend during this special time of year as companies try to ramp up profits for the quarter.
Candies, costumes, party gear and decorations are just the surface of the type of revenue channels the retail sector is eyeing. While major stores like Target (NYSE: TGT) or Wal-Mart (NYSE: WMT) should enjoy the bulk of those sales, I figured I’d look at a more Halloween-centric industry. Ever since you were a kid, the first thing you think about when you think of Halloween is candy. Now as an adult, you can invest in stocks that tickle your sweet tooth.
Let’s go trick-or-treating for four of the holiday’s favorite candy and the companies that make them.
1. Tootsie Roll Industries (TR)
The company has been around for as long as Halloween itself. Founded in 1896, the maker of such candies as Tootsie Rolls, Tootsie Roll Pops, Blow-Pops, Junior Mints, Charleston Chew, Sugar Daddies and so much more has been chugging along quite nicely. The stock has a dividend yield of 1.3%, and carries a market cap of over $1.4 billion. The P/E ratio is on a bit of a sugar high at over 27.5.
2. The Hershey Company (HSY)
The largest chocolate company in the world boasts a market cap of almost $11 billion. Hershey was actually founded three years before Tootsie Roll. While the classic Hershey’s Milk Chocolate bar is as iconic as any product gets, the company actually has a huge portfolio of other candies and chocolate confectionary goods including: Hershey’s Kisses, Kit Kat, Reese’s, Bubble Yum, Milk Duds, and more. Shares of Hershey have a bit of a higher payout, with dividends yielding about 2.7%. The company has paid a dividend for 324 consecutive quarters. It doesn’t get any sweeter than that. P/E ratio is at 22.7.
3. Kraft Foods Inc. (KFT)
While it probably isn’t fair to compare a mega food conglomerate such as Kraft to other candy companies, what you need to understand is that it owns quite a bit of the entire confectionary market. While most Americans are probably more familiar with Krafts other products like cheese, household meats, condiments, crackers and the such, it’s 2008 purchase of U.K.-based Cadbury for almost $20 billion means it can’t be ignored when talking candy. Cadbury, at the time, was the second largest confectionery company behind Mars-Wrigley. As if that wasn’t enough, the company recently announced that it plans to open a candy research center in Switzerland to capitalize on the fast growing gum market. While Cadbury doesn’t necessarily making any household name candies, Americans are very familiar with their holiday themed candies, even if they don’t know it. Kraft has a market cap of over $54 billion, and pays a dividend yield of 3.7%. The P/E ratio is pretty low at 11.5.