NEW YORK (TheStreet) -- There are many reasonsato like Hershey as an investment, including its dividend payout ratio of 50.11%, according to YCharts. That's the proportion of its cash flow shared with its investors, exceeding the payout of other top food companies like Campbell Soup and Kellogg , which pay 47.80% and 35.99%, respectively. But only one reason matters right now: Hershey has raised its prices. That should bode well for long-term profits. The biggest day of the year for candy is coming this Friday, but the world's fifth-largest candy company by revenue is positioning itself to pay off for investors long after Halloween. Must Read: 10 Stocks Billionaire John Paulson Loves in 2014 Hershey, which will announce financial results Wednesday, has beenaa tricky stock to understand. With shares closing Friday at $94.13, Hershey is down 3.19% on the year to date, trailing both the Dow Jones Industrial Average and the S&P 500 , which have gained 1.38% and 6.29%, respectively. Investors are angry. But why sell now? The time to sell was in February when the company hit its all-time high of $108.47. Now is the time to hold or add to an existing long position. Why? Well, for one thing Hershey still has a high analyst 12-month price target of $118, according to CNN Money. This suggests a possible premium of more than 25% from Friday's close. Plus, even the median target of $103 suggests gains of almost 10%. These shares will likely begin to rise, fueled by the company's recent 8% price increase. One analyst bullish on Hershey, David Driscoll of Citigroup, has a $112 target on the shares. While citing candy demand for Halloween, Driscoll expects Hershey's revenue to double in the second half of the year. Although theacompany has struggled amidahigher ingredient costs and weak demand, Driscoll says that Hershey's margins will begin to rise. Must Read: Can These 22 New Restaurant Foods and Drinks Feed Investors Too? Some shareholders feared the price increase could have an adverse effect on revenue. But with revenue growing 4.63% year over year in the most recent quarter, that hasn't been the case. By comparison, rivals like Mondelez , the world's second-largest candy company by revenue, posted a year-over-year revenue decline of 1.85%. The food and beverage industry is still struggling from weak prices and compressed margins. Hershey, meanwhile, shows that it can grow where others can't. And the company remains confident that it can grow revenue for the rest of the year at its long-term range of 5% to 7%. This comes with some caution, however. John Bilbrey, the company's CEO, told investors in July that his 120-year-old company will monitor sales trends and ensure that Hershey responds quickly in case the 8% price hike does affect sales, especially among low-income consumers. The good news is that this isn't the first time Hershey has raised its prices. The company hiked prices back in 2011 and 2012. And the stock has responded favorably, soaring more than 63% in the past three years, according to CNN Money. Whether this will be a repeat performance remains to be seen. But with higher profits on the horizon, these shares won't remains tricks forever. Must Read: Starbucks' Pumpkin Spice Frappuccino and 14 More Fatty Drinks It Makes At the time of publication, the author held no position in any of the stocks mentioned. Follow @Richard_WSPB // 0;if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs"); // ]]> This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff. TheStreet Ratings team rates HERSHEY CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation: "We rate HERSHEY CO (HSY) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself." You can view the full analysis from the report here: HSY Ratings Report
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