AUSTIN — Hormel Foods Corp. said Friday that fourth-quarter net income rose 17 percent on better prices for turkey and lower grain costs.

The company cited strong sales for its Jennie-O Turkey Store and refrigerated foods divisions.

The maker of Spam, Dinty Moore canned beef stew and other prepared foods said its net income for the quarter was $121.1 million, or 90 cents a share, compared with $103.9 million, or 77 cents a share, during the same period last year.

The performance easily topped Wall Street expectations and Hormel said it was boosting its annual dividend by 21 percent, or 18 cents, to $1.02 per share.

Refrigerated foods accounted for 53 percent of net revenue during the fourth quarter, the company said. Sales were up 26 percent in that division as consumers bought more party trays and deli meats. The Jennie-O Turkey division was boosted by higher turkey prices, and sales rose 19 percent.

Chief Executive Officer Jeffrey Ettinger said consumers are starting to spend more on its higher-end prepared products with the economy gradually improving.

“We were particularly gratified that sales grew across all of our branded, value-added product portfolios,” he said.

Revenue for the quarter was $2.063 billion, compared to $1.675 billion last year.

The company said higher grain costs will be a risk in fiscal year 2011, and said it expects to earn between $3.10 and $3.20 per share.

For the full fiscal year 2010, Hormel said net income was $395.59 million, or $2.92 a share, compared to $342.81 million, or $2.53, the year before.

Revenue for the year was $7.22 billion, compared to $6.534 billion during the same period last year.

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