HORMEL FOODS CORP (HRL)
US4404521001 - Common Stock
Overall HRL gets a fundamental rating of 4 out of 10. We evaluated HRL against 91 industry peers in the Food Products industry. Both the profitability and the financial health of HRL get a neutral evaluation. Nothing too spectacular is happening here. HRL has a expensive valuation and it also scores bad on growth. HRL also has an excellent dividend rating. With these ratings, HRL could be worth investigating further 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.
Each year in the past 5 years HRL has been profitable.
HRL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 5.88%, HRL is in the better half of the industry, outperforming 69.23% of the companies in the same industry.
HRL's Return On Equity of 10.13% is fine compared to the rest of the industry. HRL outperforms 65.93% of its industry peers.
HRL has a better Return On Invested Capital (7.32%) than 74.73% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for HRL is in line with the industry average of 7.56%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.88% | ||
| ROE | 10.13% | ||
| ROIC | 7.32% |
ROA(3y)6.86%
ROA(5y)8.36%
ROE(3y)12.19%
ROE(5y)13.45%
ROIC(3y)7.8%
ROIC(5y)9.24%
1.3 Margins
HRL has a Profit Margin of 6.55%. This is in the better half of the industry: HRL outperforms 71.43% of its industry peers.
In the last couple of years the Profit Margin of HRL has declined.
With a decent Operating Margin value of 8.67%, HRL is doing good in the industry, outperforming 72.53% of the companies in the same industry.
HRL's Operating Margin has declined in the last couple of years.
HRL has a Gross Margin (16.58%) which is in line with its industry peers.
HRL's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.67% | ||
| PM (TTM) | 6.55% | ||
| GM | 16.58% |
OM growth 3Y-7.61%
OM growth 5Y-6.03%
PM growth 3Y-11.49%
PM growth 5Y-9.17%
GM growth 3Y-4.58%
GM growth 5Y-4.45%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), HRL is destroying value.
HRL has about the same amout of shares outstanding than it did 1 year ago.
HRL has more shares outstanding than it did 5 years ago.
The debt/assets ratio for HRL has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 4.03 indicates that HRL is not in any danger for bankruptcy at the moment.
HRL has a better Altman-Z score (4.03) than 81.32% of its industry peers.
HRL has a debt to FCF ratio of 3.42. This is a good value and a sign of high solvency as HRL would need 3.42 years to pay back of all of its debts.
HRL has a Debt to FCF ratio of 3.42. This is in the better half of the industry: HRL outperforms 75.82% of its industry peers.
A Debt/Equity ratio of 0.30 indicates that HRL is not too dependend on debt financing.
HRL has a Debt to Equity ratio of 0.30. This is comparable to the rest of the industry: HRL outperforms 59.34% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.3 | ||
| Debt/FCF | 3.42 | ||
| Altman-Z | 4.03 |
ROIC/WACC0.91
WACC8.05%
2.3 Liquidity
A Current Ratio of 1.49 indicates that HRL should not have too much problems paying its short term obligations.
HRL has a Current ratio (1.49) which is in line with its industry peers.
HRL has a Quick Ratio of 1.49. This is a bad value and indicates that HRL is not financially healthy enough and could expect problems in meeting its short term obligations.
HRL has a Quick ratio (0.79) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.49 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
HRL shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.94%.
The Earnings Per Share has been decreasing by -1.87% on average over the past years.
The Revenue has decreased by -2.02% in the past year.
The Revenue has been growing slightly by 4.87% on average over the past years.
EPS 1Y (TTM)-8.94%
EPS 3Y-1.01%
EPS 5Y-1.87%
EPS growth Q2Q2.5%
Revenue 1Y (TTM)-2.02%
Revenue growth 3Y8.02%
Revenue growth 5Y4.87%
Revenue growth Q2Q0.87%
3.2 Future
HRL is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.22% yearly.
Based on estimates for the next years, HRL will show a small growth in Revenue. The Revenue will grow by 2.77% on average per year.
EPS Next Y-1.1%
EPS Next 2Y2.43%
EPS Next 3Y4.77%
EPS Next 5Y11.22%
Revenue Next Year0.92%
Revenue Next 2Y1.43%
Revenue Next 3Y1.74%
Revenue Next 5Y2.77%
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.
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 21.31, the valuation of HRL can be described as rather expensive.
Based on the Price/Earnings ratio, HRL is valued a bit cheaper than 64.84% of the companies in the same industry.
HRL's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.80.
HRL is valuated rather expensively with a Price/Forward Earnings ratio of 20.44.
Based on the Price/Forward Earnings ratio, HRL is valued a bit cheaper than the industry average as 64.84% of the companies are valued more expensively.
HRL is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.27, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.31 | ||
| Fwd PE | 20.44 |
4.2 Price Multiples
HRL's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, HRL is valued a bit cheaper than the industry average as 67.03% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.66 | ||
| EV/EBITDA | 16.28 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y2.43%
EPS Next 3Y4.77%
5. Dividend
5.1 Amount
HRL has a Yearly Dividend Yield of 3.23%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.56, HRL pays a better dividend. On top of this HRL pays more dividend than 81.32% of the companies listed in the same industry.
HRL's Dividend Yield is a higher than the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.23% |
5.2 History
On average, the dividend of HRL grows each year by 8.23%, 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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)8.23%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
HRL pays out 75.65% of its income as dividend. This is not a sustainable payout ratio.
The dividend of HRL is growing, but earnings are growing more, so the dividend growth is sustainable.
DP75.65%
EPS Next 2Y2.43%
EPS Next 3Y4.77%
HORMEL FOODS CORP
NYSE:HRL (4/19/2024, 3:20:03 PM)
After market: 34.74 0 (0%)34.74
+0.36 (+1.05%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap19.03B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.23% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.31 | ||
| Fwd PE | 20.44 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.88% | ||
| ROE | 10.13% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 8.67% | ||
| PM (TTM) | 6.55% | ||
| GM | 16.58% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.9
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.3 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.49 | ||
| Quick Ratio | 0.79 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-8.94%
EPS 3Y-1.01%
EPS 5Y
EPS growth Q2Q
EPS Next Y-1.1%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-2.02%
Revenue growth 3Y8.02%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y