1 Magnificent S&P 500 Dividend Stock Down 42% to Buy and Hold Forever

If you've been around long enough, you will encounter some bumps in the road. This is true for The Hershey Company (NYSE: HSY), whose history dates back to the 1890s. The company is among the most iconic global food and beverage brands today.

The stock has fallen over 40% from its peak, which is shocking considering the broader stock market is at all-time highs. The last time Hershey's stock took a tumble this bad was during a global recession in 2008. However, this time it's about the company. Hershey is dealing with crushing margin pressure and fears that GLP-1 agonists, a popular weight loss drug, are turning consumers away from sweets.

I'll admit: It's not pretty at first glance. But if you dig deeper, the stock could be among the best deals on Wall Street. Here is why investors should consider buying Hershey today and holding it forever.

As I said, Hershey is experiencing a crisis right now. The company recently completed its 2024 fiscal reporting and released woeful 2025 guidance, calling for earnings per share of $6 to $6.18, down significantly from $9.37 in 2024. The confectionery giant blamed the anticipated decline on higher commodity costs, rebased incentive compensation, and a higher tax rate.

It's not that Hershey isn't selling sweets; management guided for 2% revenue growth for 2025. This is all about the underlying costs associated (primarily) with cocoa prices. You can see that cocoa prices have exploded like a meme stock in a market bubble:

The reason? Roughly 70% of the world's cocoa comes from West Africa. Adverse weather has hurt crop yields and disrupted the global supply. Hershey has combated rising costs with price increases, but you can only do that so much. This year, Hershey will feel more of the brunt of high cocoa prices. According to industry analysts, cocoa prices should begin to ease this year, barring further disruptions to production.

What about weight loss drugs? Right now, fears seem more like bark than bite. Hershey's management noted specifically on its fourth-quarter earnings call that it's not seeing any material impact on sales due to GLP-1 agonists. It will take time for things to normalize again, but this is all external to Hershey. Is this unfortunate? Of course. However, it doesn't mean Hershey is a lousy business.

You never want to let share prices alone dictate your view on a business. Stocks go up and down. However, if you buy and hold quality companies, they should drift higher over the long term.