Key Takeaways
- Hershey yields 3.4% and MPLX yields 8.7%, so $10,000 pays $340 a year from Hershey and $870 from MPLX today.
- MPLX raised its distribution 12.5% for the third straight year, and its distributable cash flow covered fiscal 2025’s distributions 1.4x.
- Hershey’s dividend takes 53% of its free cash flow over the trailing 12 months, and it carries far less debt than MPLX.
- MPLX’s $750 million asset sale could slow its 2027 raise, though management still expects a significant one.
MPLX (MPLX) raised its quarterly distribution 12.5% to $1.2111 a unit in its Nov. 3 third-quarter release. That works out to $4.84 a year, and it’s the third straight year of a 12.5% raise. On the call that day, management said the $750 million asset sale it had just agreed to could slow next year’s increase.
Hershey (HSY) is heading the other way on earnings. On Oct. 29 it raised its 2026 adjusted earnings-per-share growth outlook to 36% to 38.5%, from 32.5% to 35%, and declared its quarterly dividend of $1.452 a share. But its dividend per share didn’t rise in fiscal 2025.
So which one is the better dividend stock?
| Metric | Hershey (HSY) | MPLX (MPLX) |
|---|---|---|
| Dividend yield | 3.4% | 8.7% |
| Current dividend | $5.81 a share a year | $4.84 a unit a year |
| Dividend growth, fiscal 2020-2025 | 11.7% a year | 8.2% a year |
| Coverage, on its own measure | Cash dividend payout ratio: 53% (TTM) | Distributable cash flow coverage: 1.40x (fiscal 2025) |
| Net debt/EBITDA | 1.48x | 4.05x |
| Interest coverage | 11.73x | 4.03x |
Source: TIKR; current dividends from StockAnalysis.
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Hershey’s profits are recovering, but sales are slow
Hershey’s net sales rose 3.0% to $3.28 billion in the third quarter of 2026. On an organic, constant-currency basis, they rose only 0.8%. North America Salty Snacks sales grew 22.3%, with the LesserEvil acquisition supplying 20 points of that. North America Confectionery segment income rose 66.2% on pricing, productivity savings, tariff refunds and lower commodity costs. International sales fell 7.5%.
CEO Kirk Tanner said: “Our second-half demand creation initiatives are gaining momentum, even as consumers grow more cautious.”
Hershey’s dividend is well-covered, taking 53% of free cash flow over the 12 months to Sept. 27, 2026: $1.13 billion of $2.12 billion. The chart shows dividends paid rising every year, from $500 million in fiscal 2016 to $1.09 billion in fiscal 2025. Free cash flow peaked at $1.93 billion in fiscal 2024.
That took its cash dividend payout ratio from 43.2% in fiscal 2021 to 59.5% in fiscal 2025.
The main risk is volume. Management names cautious consumers, softer convenience-store sales, and higher freight and input costs among its pressures.
MPLX pays more than twice the yield, and it’s still raising
MPLX’s yield is more than double Hershey’s. As an MLP, it pays distributions on units, and holders get a K-1 at tax time.
Its third-quarter adjusted EBITDA rose 5.3% to $1.86 billion. Utica gathering and processing volumes were up 19% and 20% from a year earlier, and its Harmon Creek III and Secretariat I processing plants are still ramping up.
MPLX’s distributable cash flow per unit was $5.68 in fiscal 2025, covering $4.07 of distributions 1.40 times. From fiscal 2016 to fiscal 2025, distributions rose from $2.05 a unit to $4.07, and distributable cash flow per unit rose from $3.25 to $5.68.
Coverage didn’t drop below 1.35x in any of those years. Management called this year’s raise “the fifth consecutive year of double-digit increases.”
The complication is the Nov. 2 deal to sell logistics assets tied to two Marathon Petroleum refineries for $750 million in cash. CEO Maryann Mannen said on the call that “the divestiture announced today currently presents a headwind to 2027 that was not initially contemplated when other operational metrics were established.” Management still expects a significant 2027 increase, bigger than its distributable cash flow growth, and says it’s comfortable with annual coverage of 1.3x. Third-quarter coverage was already 1.3x, so a raise that outpaces cash flow leaves little room above that floor.
MPLX also carries more debt, with net debt at 4.05x EBITDA.
So which dividend wins?
MPLX is the better dividend stock. Its yield is far higher, and its cash flow has covered the payout comfortably for a decade.
The gap in income is what decides it. Even if Hershey kept growing its dividend at its five-year pace of 11.7% and MPLX at its 8.2%, Hershey’s income wouldn’t pass MPLX’s for about 29 years, around 2056. By year 10, MPLX would pay about $1,762 on today’s $10,000, a 17.6% yield on your cash. Hershey would pay about $921. At the pace each dividend grew in fiscal 2025, Hershey would never catch up.
Hershey’s dividend is still safe. It takes 53% of free cash flow, Hershey’s debt is a fraction of MPLX’s, and its earnings are recovering. For an income investor, though, MPLX’s well-covered check is too much money to leave on the table.
Of course, MPLX’s 2027 raise will show what the asset sale costs. A raise that pushes coverage below 1.3x would change the answer.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
