Friday, January 13, 2012

Satisfy Your Stomach and Your Portfolio with Chocolate

Most people love chocolate, and not just for its taste. Some eat chocolate to help reduce wrinkles. It is now being used in cough medicines. Many students eat chocolate before taking a test, due to the fact that chocolate has been found by researchers to improve brain function. Even Warren Buffett likes chocolate, as his company, Berkshire Hathaway (BRK-A) (BRK-B), owns See's Candies.

With Valentine's Day coming up next month, investors are wondering if they should nibble on chocolate and sugar stocks. just updated its free list of several chocolate stocks that may be worth feasting on. Here are a few that may satisfy your portfolio.

Rocky Mountain Chocolate Factory (RMCF), based in Durango, Colorado, makes and markets caramels, creams, mints, and truffles. The company, founded in 1981, has over 300 franchise locations in 40 states, plus Canada and the United Arab Emirates. The stock trades at 12.5 times forward earnings, and the company pays a mouth-watering yield of 4.6%. The company just announced its third quarter operating results. For the latest quarter, total revenues increased 4.6 percent to approximately $8.3 million, factory sales rose by 5.6 percent, mostly due to a 29.4 percent increase in sales to customers outside the Company's network of franchise retail stores.

However, earnings dropped 17.0 percent, mostly due to increased operating costs related to the Company's Aspen Leaf Yogurt division, an increase in uncollectable accounts reserves, and a drop in the franchise fees.

Then there is the classic company known for its chocolate bars, Hershey (HSY), that was founded in 1894. It is the largest manufacturer of chocolate in North America and one of the largest chocolate and candy companies in the world. It is famous for its Hershey's Kisses which were invented in 1901 and the chocolate chips that were brought out in 1928. The stock has forward price to earnings ratio of 19.7, with a scrumptious yield of 2.3%.

There is also the world-famous Nestle (NSRGY.PK), which sports a forward P/E of 14.8 and yields 3.7%. This Swiss chocolate manufacturer was founded in 1867.

If you want to see a free list of all the publicly traded chocolate and candy stocks, go to The list, which includes five companies that pay dividends, can be downloaded, updated, and sorted.

Disclosure: Author did not own any of the above at the time the article was written.


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