HORMEL FOODS CORP (HRL) Stock Fundamental Analysis
USA - NYSE:HRL - US4404521001 - Common Stock
22.66 USD
+0.39 (+1.75%)
22.79 USD
+0.13 (+0.57%)
HRL gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 86 industry peers in the Food Products industry. HRL has only an average score on both its financial health and profitability. HRL is valued correctly, but it does not seem to be growing. Finally HRL also has an excellent dividend rating. These ratings could make HRL a good candidate for dividend investing.
1. Profitability
1.1 Basic Checks
In the past year HRL was profitable.
HRL had a positive operating cash flow in the past year.
In the past 5 years HRL has always been profitable.
HRL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
HRL has a better Return On Assets (5.59%) than 76.74% of its industry peers.
HRL has a better Return On Equity (9.33%) than 69.77% of its industry peers.
HRL has a better Return On Invested Capital (6.50%) than 69.77% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HRL is significantly below the industry average of 29.14%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.59% | ||
| ROE | 9.33% | ||
| ROIC | 6.5% |
ROA(3y)6.47%
ROA(5y)7.15%
ROE(3y)11.2%
ROE(5y)12.15%
ROIC(3y)7.49%
ROIC(5y)7.95%
1.3 Margins
HRL has a better Profit Margin (6.26%) than 75.58% of its industry peers.
In the last couple of years the Profit Margin of HRL has declined.
HRL has a Operating Margin of 8.40%. This is in the better half of the industry: HRL outperforms 70.93% of its industry peers.
In the last couple of years the Operating Margin of HRL has declined.
HRL has a Gross Margin (16.36%) which is comparable to the rest of the industry.
HRL's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.4% | ||
| PM (TTM) | 6.26% | ||
| GM | 16.36% |
OM growth 3Y-3.33%
OM growth 5Y-6.88%
PM growth 3Y-5.43%
PM growth 5Y-8.11%
GM growth 3Y0.06%
GM growth 5Y-3.09%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), HRL is creating some value.
Compared to 1 year ago, HRL has more shares outstanding
HRL has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, HRL has an improved debt to assets ratio.
2.2 Solvency
HRL has an Altman-Z score of 3.48. This indicates that HRL is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 3.48, HRL is doing good in the industry, outperforming 76.74% of the companies in the same industry.
The Debt to FCF ratio of HRL is 4.55, which is a neutral value as it means it would take HRL, 4.55 years of fcf income to pay off all of its debts.
HRL has a better Debt to FCF ratio (4.55) than 79.07% of its industry peers.
HRL has a Debt/Equity ratio of 0.35. This is a healthy value indicating a solid balance between debt and equity.
HRL has a Debt to Equity ratio (0.35) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 4.55 | ||
| Altman-Z | 3.48 |
ROIC/WACC0.89
WACC7.34%
2.3 Liquidity
HRL has a Current Ratio of 2.47. This indicates that HRL is financially healthy and has no problem in meeting its short term obligations.
HRL's Current ratio of 2.47 is fine compared to the rest of the industry. HRL outperforms 74.42% of its industry peers.
HRL has a Quick Ratio of 1.12. This is a normal value and indicates that HRL is financially healthy and should not expect problems in meeting its short term obligations.
HRL has a better Quick ratio (1.12) than 66.28% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.47 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
HRL shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -6.96%.
HRL shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -1.91% yearly.
HRL shows a small growth in Revenue. In the last year, the Revenue has grown by 0.65%.
HRL shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.65% yearly.
EPS 1Y (TTM)-6.96%
EPS 3Y-2.98%
EPS 5Y-1.91%
EPS Q2Q%-5.41%
Revenue 1Y (TTM)0.65%
Revenue growth 3Y1.54%
Revenue growth 5Y4.65%
Sales Q2Q%4.64%
3.2 Future
HRL is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.52% yearly.
HRL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.69% yearly.
EPS Next Y-10.4%
EPS Next 2Y-2.57%
EPS Next 3Y1.07%
EPS Next 5Y3.52%
Revenue Next Year1.78%
Revenue Next 2Y2.03%
Revenue Next 3Y2.16%
Revenue Next 5Y1.69%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 15.41, the valuation of HRL can be described as correct.
66.28% of the companies in the same industry are more expensive than HRL, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 25.91, HRL is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 15.11, the valuation of HRL can be described as correct.
Based on the Price/Forward Earnings ratio, HRL is valued a bit cheaper than 70.93% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 34.57. HRL is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.41 | ||
| Fwd PE | 15.11 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HRL is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, HRL is valued a bit cheaper than the industry average as 66.28% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.85 | ||
| EV/EBITDA | 11.34 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-2.57%
EPS Next 3Y1.07%
5. Dividend
5.1 Amount
HRL has a Yearly Dividend Yield of 5.34%, which is a nice return.
The stock price of HRL dropped by -20.44% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 5.19, HRL pays a better dividend. On top of this HRL pays more dividend than 84.88% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, HRL pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.34% |
5.2 History
On average, the dividend of HRL grows each year by 6.53%, which is quite nice.
HRL has been paying a dividend for at least 10 years, so it has a reliable track record.
HRL has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)6.53%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
83.32% of the earnings are spent on dividend by HRL. This is not a sustainable payout ratio.
The dividend of HRL is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP83.32%
EPS Next 2Y-2.57%
EPS Next 3Y1.07%
22.66
+0.39 (+1.75%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners90.9%
Inst Owner Change1.23%
Ins Owners0.16%
Ins Owner Change0.04%
Market Cap12.46B
Revenue(TTM)12.06B
Net Income(TTM)754.53M
Analysts68
Price Target29.89 (31.91%)
Short Float %5.15%
Short Ratio3.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.34% |
Yearly Dividend1.12
Dividend Growth(5Y)6.53%
DP83.32%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-7.16%
Min EPS beat(2)-15.34%
Max EPS beat(2)1.03%
EPS beat(4)1
Avg EPS beat(4)-5.94%
Min EPS beat(4)-15.34%
Max EPS beat(4)1.03%
EPS beat(8)4
Avg EPS beat(8)-0.26%
EPS beat(12)6
Avg EPS beat(12)-1.4%
EPS beat(16)8
Avg EPS beat(16)-1.1%
Revenue beat(2)1
Avg Revenue beat(2)-0.25%
Min Revenue beat(2)-1.27%
Max Revenue beat(2)0.76%
Revenue beat(4)2
Avg Revenue beat(4)-0.22%
Min Revenue beat(4)-1.27%
Max Revenue beat(4)0.8%
Revenue beat(8)3
Avg Revenue beat(8)-1.03%
Revenue beat(12)3
Avg Revenue beat(12)-1.95%
Revenue beat(16)6
Avg Revenue beat(16)-0.84%
PT rev (1m)0%
PT rev (3m)-10.93%
EPS NQ rev (1m)-17.91%
EPS NQ rev (3m)-34.57%
EPS NY rev (1m)-2.77%
EPS NY rev (3m)-13.09%
Revenue NQ rev (1m)0.21%
Revenue NQ rev (3m)0.09%
Revenue NY rev (1m)0.07%
Revenue NY rev (3m)0.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.41 | ||
| Fwd PE | 15.11 | ||
| P/S | 1.03 | ||
| P/FCF | 19.85 | ||
| P/OCF | 13.39 | ||
| P/B | 1.54 | ||
| P/tB | 8.66 | ||
| EV/EBITDA | 11.34 |
EPS(TTM)1.47
EY6.49%
EPS(NY)1.5
Fwd EY6.62%
FCF(TTM)1.14
FCFY5.04%
OCF(TTM)1.69
OCFY7.47%
SpS21.92
BVpS14.7
TBVpS2.62
PEG (NY)N/A
PEG (5Y)N/A
Graham Number22.05
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.59% | ||
| ROE | 9.33% | ||
| ROCE | 8.34% | ||
| ROIC | 6.5% | ||
| ROICexc | 6.86% | ||
| ROICexgc | 16.2% | ||
| OM | 8.4% | ||
| PM (TTM) | 6.26% | ||
| GM | 16.36% | ||
| FCFM | 5.21% |
ROA(3y)6.47%
ROA(5y)7.15%
ROE(3y)11.2%
ROE(5y)12.15%
ROIC(3y)7.49%
ROIC(5y)7.95%
ROICexc(3y)8.08%
ROICexc(5y)8.91%
ROICexgc(3y)21.3%
ROICexgc(5y)22.65%
ROCE(3y)9.6%
ROCE(5y)10.2%
ROICexgc growth 3Y-7.22%
ROICexgc growth 5Y-11.81%
ROICexc growth 3Y-3.68%
ROICexc growth 5Y-13.2%
OM growth 3Y-3.33%
OM growth 5Y-6.88%
PM growth 3Y-5.43%
PM growth 5Y-8.11%
GM growth 3Y0.06%
GM growth 5Y-3.09%
F-Score5
Asset Turnover0.89
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 4.55 | ||
| Debt/EBITDA | 2.24 | ||
| Cap/Depr | 116.21% | ||
| Cap/Sales | 2.51% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 73.07% | ||
| Profit Quality | 83.2% | ||
| Current Ratio | 2.47 | ||
| Quick Ratio | 1.12 | ||
| Altman-Z | 3.48 |
F-Score5
WACC7.34%
ROIC/WACC0.89
Cap/Depr(3y)104.11%
Cap/Depr(5y)118.53%
Cap/Sales(3y)2.21%
Cap/Sales(5y)2.5%
Profit Quality(3y)103.03%
Profit Quality(5y)95.5%
High Growth Momentum
Growth
EPS 1Y (TTM)-6.96%
EPS 3Y-2.98%
EPS 5Y-1.91%
EPS Q2Q%-5.41%
EPS Next Y-10.4%
EPS Next 2Y-2.57%
EPS Next 3Y1.07%
EPS Next 5Y3.52%
Revenue 1Y (TTM)0.65%
Revenue growth 3Y1.54%
Revenue growth 5Y4.65%
Sales Q2Q%4.64%
Revenue Next Year1.78%
Revenue Next 2Y2.03%
Revenue Next 3Y2.16%
Revenue Next 5Y1.69%
EBIT growth 1Y-1.83%
EBIT growth 3Y-1.84%
EBIT growth 5Y-2.55%
EBIT Next Year15.4%
EBIT Next 3Y9.49%
EBIT Next 5Y9.03%
FCF growth 1Y-25.48%
FCF growth 3Y9.5%
FCF growth 5Y9.93%
OCF growth 1Y-15.41%
OCF growth 3Y8.13%
OCF growth 5Y6.54%
HORMEL FOODS CORP / HRL FAQ
What is the ChartMill fundamental rating of HORMEL FOODS CORP (HRL) stock?
ChartMill assigns a fundamental rating of 5 / 10 to HRL.
What is the valuation status of HORMEL FOODS CORP (HRL) stock?
ChartMill assigns a valuation rating of 4 / 10 to HORMEL FOODS CORP (HRL). This can be considered as Fairly Valued.
How profitable is HORMEL FOODS CORP (HRL) stock?
HORMEL FOODS CORP (HRL) has a profitability rating of 5 / 10.
Can you provide the financial health for HRL stock?
The financial health rating of HORMEL FOODS CORP (HRL) is 6 / 10.
Is the dividend of HORMEL FOODS CORP sustainable?
The dividend rating of HORMEL FOODS CORP (HRL) is 8 / 10 and the dividend payout ratio is 83.32%.