Even well-run companies face hard times now and again. In fact, it is the ability to survive the hard times that makes a company well run in the first place.

Wall Street, however, tends to always react to hard times in the same way, by selling the company facing them. That can open up opportunities that turn into the best investments, with some situations being rare, once-in-a-decade chances to buy a great stock. This business' stock represents just such a situation today.

Sweet and savory

The Hershey Company (HSY -1.83%) is a leading confectioner and snack maker. The consumer staples company is best known for its chocolate, including its namesake brand and Reese's.

It has a long history of success, growing organically and via acquisitions. Most recently, it has been buying up salty snack companies -- including Dot's Pretzels -- to broaden its portfolio beyond chocolate and other sweets.

Image source: Getty Images.

The company has increased its dividend for 15 consecutive years, and more broadly, it has trended higher for decades. By and large, Hershey has proved to be a reliable dividend growth stock, with the average annual dividend increase over the past 10 years a fairly impressive 10%.

Right now, its yield is at the high end of its historical range at around 3.2%, and that's why long-term dividend investors should be looking at Hershey right now. In a decade, this could turn out to be a hugely profitable investment.

HSY data by YCharts

Hershey's problems are real

That said, its yield is high right now because the stock has lost more than a third of its value since hitting a peak in 2023. There are two main reasons. First, the price of cocoa has skyrocketed. So far, the company's hedging efforts have held off the pain. But that is set to end in 2025, with management projecting that adjusted earnings will decline between 30% and 40%. Investors are, perhaps justifiably, not happy about that prospect.

The second big headwind is a bit more nebulous. A new type of blockbuster weight loss drug is being quickly and widely adopted, and it could lead to less demand for sweets and snacks. All in, the glass-half-full view is for less demand and higher costs.

But there are reasons to stay positive. For starters, the Hershey Trust controls 79% of the voting rights of the company. It uses the income generated from the dividend to support its philanthropic efforts. Thus, it has a vested interest in ensuring that Hershey is run in a conservative manner that ensures a reliable and growing dividend. The company likely has the backing of its largest shareholder to do the right thing, even if the right thing takes some time.

With regard to a vital commodity like cocoa, the right thing is to push through price hikes as needed, cut costs, and wait for the cocoa market to adjust. High commodity prices are usually enough to increase investment in a crop, with that investment eventually leading to lower commodity prices.

There's no quick fix here given the nature of the cocoa market but, as noted, Hershey has time on its side.

As for the new weight loss drugs, there are two reasons to be hopeful. First, humans have a terrible track record adhering to long-term drug regimens. Second, chocolate is a beloved, indulgent treat. It seems highly unlikely that people will just stop eating it.

Notably, Hershey's volume was down 2% in 2024, but up 6% in the final quarter of the year. Given the rapid adoption of new weight loss drugs, it doesn't look like there's been a massive impact.

All Hershey needs to do is muddle through

There's no question that buying Hershey stock today is a bit of a contrarian play. You have to recognize the problems it faces and believe that those problems are survivable. If the company proves resilient amid the headwinds, the stock's performance could take a dramatic turn for the better.

The big factor right now is simply working through the disruption in cocoa prices. If management can do that, Hershey's business fortunes should quickly take a turn for the better. And that would likely lead to a new -- and higher -- valuation on Wall Street.