HORMEL FOODS CORP (HRL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HRL - US4404521001 - Common Stock
24.6 USD
+0.24 (+0.99%)
24.5 USD
-0.1 (-0.41%)
Taking everything into account, HRL scores 4 out of 10 in our fundamental rating. HRL was compared to 87 industry peers in the Food Products industry. HRL has only an average score on both its financial health and profitability. HRL is valued expensive and it does not seem to be growing. HRL also has an excellent dividend rating. This makes HRL very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
- HRL had positive earnings in the past year.
- In the past year HRL had a positive cash flow from operations.
- In the past 5 years HRL has always been profitable.
- In the past 5 years HRL always reported a positive cash flow from operatings.
1.2 Ratios
- HRL has a better Return On Assets (3.57%) than 63.22% of its industry peers.
- Looking at the Return On Equity, with a value of 6.05%, HRL is in line with its industry, outperforming 59.77% of the companies in the same industry.
- The Return On Invested Capital of HRL (5.99%) is better than 65.52% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for HRL is significantly below the industry average of 27.79%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.57% | ||
| ROE | 6.05% | ||
| ROIC | 5.99% |
ROA(3y)5.15%
ROA(5y)6.03%
ROE(3y)8.79%
ROE(5y)10.54%
ROIC(3y)6.47%
ROIC(5y)6.94%
1.3 Margins
- With a decent Profit Margin value of 3.95%, HRL is doing good in the industry, outperforming 66.67% of the companies in the same industry.
- HRL's Profit Margin has declined in the last couple of years.
- HRL has a Operating Margin of 7.94%. This is in the better half of the industry: HRL outperforms 71.26% of its industry peers.
- HRL's Operating Margin has declined in the last couple of years.
- HRL has a Gross Margin (15.70%) which is in line with its industry peers.
- In the last couple of years the Gross Margin of HRL has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.94% | ||
| PM (TTM) | 3.95% | ||
| GM | 15.7% |
OM growth 3Y-8.39%
OM growth 5Y-6.45%
PM growth 3Y-21.05%
PM growth 5Y-16.01%
GM growth 3Y-3.32%
GM growth 5Y-3.74%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so HRL is destroying value.
- The number of shares outstanding for HRL has been increased compared to 1 year ago.
- HRL has more shares outstanding than it did 5 years ago.
- Compared to 1 year ago, HRL has a worse debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 3.59 indicates that HRL is not in any danger for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 3.59, HRL is in the better half of the industry, outperforming 74.71% of the companies in the same industry.
- The Debt to FCF ratio of HRL is 5.35, which is a neutral value as it means it would take HRL, 5.35 years of fcf income to pay off all of its debts.
- With a decent Debt to FCF ratio value of 5.35, HRL is doing good in the industry, outperforming 77.01% of the companies in the same industry.
- HRL has a Debt/Equity ratio of 0.36. This is a healthy value indicating a solid balance between debt and equity.
- HRL has a Debt to Equity ratio of 0.36. This is comparable to the rest of the industry: HRL outperforms 57.47% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.36 | ||
| Debt/FCF | 5.35 | ||
| Altman-Z | 3.59 |
ROIC/WACC0.78
WACC7.67%
2.3 Liquidity
- A Current Ratio of 2.47 indicates that HRL has no problem at all paying its short term obligations.
- HRL has a better Current ratio (2.47) than 71.26% of its industry peers.
- A Quick Ratio of 1.20 indicates that HRL should not have too much problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 1.20, HRL is in the better half of the industry, outperforming 68.97% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.47 | ||
| Quick Ratio | 1.2 |
3. Growth
3.1 Past
- The earnings per share for HRL have decreased strongly by -13.29% in the last year.
- Measured over the past years, HRL shows a decrease in Earnings Per Share. The EPS has been decreasing by -3.88% on average per year.
- The Revenue has been growing slightly by 1.55% in the past year.
- Measured over the past years, HRL shows a small growth in Revenue. The Revenue has been growing by 4.73% on average per year.
EPS 1Y (TTM)-13.29%
EPS 3Y-9.2%
EPS 5Y-3.88%
EPS Q2Q%-23.81%
Revenue 1Y (TTM)1.55%
Revenue growth 3Y-0.95%
Revenue growth 5Y4.73%
Sales Q2Q%1.52%
3.2 Future
- The Earnings Per Share is expected to grow by 5.70% on average over the next years.
- Based on estimates for the next years, HRL will show a small growth in Revenue. The Revenue will grow by 1.92% on average per year.
EPS Next Y8%
EPS Next 2Y7.69%
EPS Next 3Y7.32%
EPS Next 5Y5.7%
Revenue Next Year2.06%
Revenue Next 2Y2.15%
Revenue Next 3Y2.08%
Revenue Next 5Y1.92%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 17.96, the valuation of HRL can be described as rather expensive.
- HRL's Price/Earnings is on the same level as the industry average.
- HRL is valuated rather cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- HRL is valuated correctly with a Price/Forward Earnings ratio of 16.63.
- Based on the Price/Forward Earnings ratio, HRL is valued a bit cheaper than the industry average as 67.82% of the companies are valued more expensively.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. HRL is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.96 | ||
| Fwd PE | 16.63 |
4.2 Price Multiples
- HRL's Enterprise Value to EBITDA is on the same level as the industry average.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of HRL is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.32 | ||
| EV/EBITDA | 12.78 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates HRL does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)2.25
PEG (5Y)N/A
EPS Next 2Y7.69%
EPS Next 3Y7.32%
5. Dividend
5.1 Amount
- HRL has a Yearly Dividend Yield of 4.80%, which is a nice return.
- HRL's Dividend Yield is rather good when compared to the industry average which is at 2.29. HRL pays more dividend than 83.91% of the companies in the same industry.
- HRL's Dividend Yield is rather good when compared to the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.8% |
5.2 History
- The dividend of HRL has a limited annual growth rate of 4.90%.
- HRL has paid a dividend for at least 10 years, which is a reliable track record.
- HRL has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)4.9%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
- HRL pays out 132.41% of its income as dividend. This is not a sustainable payout ratio.
- The dividend of HRL is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP132.41%
EPS Next 2Y7.69%
EPS Next 3Y7.32%
HORMEL FOODS CORP / HRL FAQ
What is the fundamental rating for HRL stock?
ChartMill assigns a fundamental rating of 4 / 10 to HRL.
What is the valuation status for HRL stock?
ChartMill assigns a valuation rating of 3 / 10 to HORMEL FOODS CORP (HRL). This can be considered as Overvalued.
What is the profitability of HRL stock?
HORMEL FOODS CORP (HRL) has a profitability rating of 5 / 10.
What is the earnings growth outlook for HORMEL FOODS CORP?
The Earnings per Share (EPS) of HORMEL FOODS CORP (HRL) is expected to grow by 8% in the next year.
Can you provide the dividend sustainability for HRL stock?
The dividend rating of HORMEL FOODS CORP (HRL) is 7 / 10 and the dividend payout ratio is 132.41%.