Dutch Bros vs. Hershey: Which Stock Is the Better Buy Before 2027?
2026-10-26 01:45
•Jack Delaney •The Motley Fool
••••••• •• Axe Cap view
Dutch Bros vs. Hershey: Stability or Growth for SA Investors?
Comparing a high-growth US coffee chain with a stalwart snackmaker reveals clear local implications for South African investors.
Dutch Bros’s rapid growth is impressive, but the 58x forward price-to-earnings ratio is a steep price for growth that's not guaranteed. Their 27% revenue jump is exciting, but profitability is still modest compared to established players. For South African investors eyeing global exposure, Hershey offers a steadier income stream with a sensible 3.4% dividend yield and much higher net profits. With local markets facing intermittent rand volatility, Hershey’s defensive qualities could provide a buffer. Meanwhile, Dutch Bros’s stock has already corrected by over 27%, hinting the market is pricing in execution risks. If the rand weakens further, Hershey’s consistent dividend income may prove more attractive than speculative growth plays in USD. That said, if US consumer confidence rebounds sharply and execution risks lessen, Dutch Bros could surprise to the upside — though that feels less likely in the near term given market jitters. this is just our opinion and not financial advice
Prefer Hershey for steady income and lower risk exposure to USD/ZAR swings; watch Dutch Bros from the sidelines for now, especially given its recent volatility and valuation.
- HSY
- USD/ZAR
- US consumer spending faltering further, impacting Hershey
- Dutch Bros failing to execute rapid expansion smoothly
6/10
The article compares Dutch Bros, a rapidly expanding coffee chain with 27.9% revenue growth, against Hershey, a mature snacking giant with $11.7B in revenue. While Dutch Bros offers high-growth potential, the author recommends Hershey for its defensive stability, higher profitability ($883.3M net income vs. $79.8M), 3.4% dividend yield, and lower stock volatility amid market uncertainty.
Our take is based on reporting first published by The Motley Fool.