The bottom of the Trick-or-Treat hierarchy... Somewhere between apple slices and candy corn, you get Tootsie Roll. Its sales fell to $515M last year and have barely budged in 2019 — that's because it's fighting nearly every trend we talk about at Snacks.
- It's pro-sugar: Tootsie is doubling-down on dessert. Indulge in this portfolio of brands: Blow Pop, Charleston Chew, Junior Mints, and many more movie theater faves.
- It's anti-diversifying its biz lines: Hershey's just bought a popcorn company. Mars acquired a pet food one and invested in Kind Bar. Tootsie is still just Wonka-esque candy.
- But it's found an audience: The latest OECD report on developed countries found 60% of citizens are overweight and 25% are obese.
When you've been around this long... you do things your own way. We noticed the 123-year-old company handles a few things differently.
- The Gordon Family has owned a majority of Tootsie Roll for 60 years.
- After its 95-year-old CEO passed away in 2015, his now 87-year-old wife Ellen charmingly took over (she’s 87 and running the show).
- But they don't do earnings calls (they just release the reports) and no analysts cover the company (because it literally only does candy).
So why's the stock up 28% in the last year?... Dividends. Those are the payouts some profitable companies make to their shareholders when they're mature enough to have a steady stream of profits. And Tootsie Roll pays them, because its bare bones candy biz is profitable. It has actually raised its dividend every year for the last 50 years. Investors don't mind Tootsie's kale aversion, because it reliably pays them dividends.