Summary HSY has proved to be a consistent, solid performer over an extended period of time, delivering superior investor returns. The stock offers a solid 2.3% yield, which is likely to experience solid growth going forward. I have high conviction in the long-term success of the company's business model, and am accumulating the shares regularly on a quarterly basis. I am developing a passive income stream from dividends to generate financial independence. I'm proceeding down the path of steadily accumulating a set of high-quality, dividend-paying stocks. My strategy is quarterly accumulation of 30 stocks through a low-cost brokerage, with a few thousand dollars invested across all these stocks at a time. HSY (NYSE:HSY) is one of the businesses in my dividend portfolio that I am accumulating. Purchase History I started accumulating HSY in very small amounts in late 2014 as part of my accumulation strategy. Most recently, I purchased the stock as part of my dividend accumulation portfolio in July 2015. The stock has a long-term track record of delivering excellent returns for its investors. In fact, a $10,000 investment in HSY made in 1985 would be worth $457,000 today, This reflects a return over time of close to 13.5% annually. HSY's strong brand presence and strong product mix makes for rising total return and dividend income. I'm very interested in generating a sustainable long-term income stream, and so I want solid dividend growth prospects. HSY offers a dividend yield of just over 2.3%. More impressively, the company has seen a dividend growth rate of almost 10% annually over the last 25 years, according to longrundata.com. HSY Q2 results display weakness Hershey reported a rather flat Q2. Sales in Q2 2015 were almost identical with that reported in Q2 2014 at $1,578M. While HSY actually experienced net sales growth of 1.5%, that was almost entirely offset by negative foreign exchange impacts. The company reported an earnings per share loss in Q2 of $0.47, compared to an EPS profit of $0.75 for the previous comparable period. HSY reaffirmed full year guidance and noted that full year sales were expected to increase 1.5% to 2.5%, with adjusted earnings per share to increase 3% to 5%. Depressed Chinese performance likely to be temporary HSY's performance in China was again well below expectation, and the main reason attributed for the decline in international sales growth year on year by 12%. Hershey's Shanghai Golden Monkey acquisition has not displayed the strength and performance that it was expected to. Below trend GDP growth in China has impacted the sales of discretionary goods, however Hershey's play in China is a long term one, and HSY's long term progress in the region should closely track improving discretionary income. To mitigate stalling growth in larger cities in China, Hershey plans to expand to Tier 2 and Tier 3 cities in the country. Consumer loyalty and bargaining power provides moat Hershey is a business that has been around for many years, since 1894 in fact. Hershey's strong stable of well-known brands, customer loyalty and bargaining clout with retailers combine to provide the company with a strong moat. The company derives a return on equity of close to 55%, HSY also has a very good return on capital of close to 25%. All these points provide objective evidence of a strong moat which is likely to lead to continuing good returns for Hershey over the long term. Valuation Hershey currently trades at a P/E ratio of 36.8, and a forward P/E ratio of 21. The company's poor share price performance thus far in 2015 leaves it trading at pricing multiples that are pretty consistent with where it has traded at over the last 5 years. Hershey stock has actually fallen since I first started my accumulation. My September 2014 purchase was done at $93 and my October purchase was done at $94. My November 2014 purchase was done at $98, while my March 2015 purchase was done at 99. My most recent purchases in June and July were done at $90. Hershey currently trades at $94. I think HSY is likely fairly priced at the moment. A solid 2.3% dividend yield makes the business an attractive prospect. Morningstar rates the stock 3 stars. This is a long term stock to hold in my opinion, given the strength of HSY's brands and assets. I am comfortable accumulating Hershey on a quarterly basis for the long term. More