HORMEL FOODS CORP (HRL) Stock Fundamental Analysis
NYSE:HRL - US4404521001 - Common Stock
25.52 USD
-0.05 (-0.18%)
25.46 USD
-0.06 (-0.24%)
Taking everything into account, HRL scores 5 out of 10 in our fundamental rating. HRL was compared to 88 industry peers in the Food Products industry. HRL has an average financial health and profitability rating. HRL has a valuation in line with the averages, but on the other hand it scores bad on growth. Finally 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 5.59%, HRL is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
HRL has a better Return On Equity (9.33%) than 65.91% of its industry peers.
HRL has a better Return On Invested Capital (6.50%) than 67.05% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for HRL is significantly below the industry average of 28.74%.
| 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's Profit Margin of 6.26% is fine compared to the rest of the industry. HRL outperforms 76.14% of its industry peers.
In the last couple of years the Profit Margin of HRL has declined.
Looking at the Operating Margin, with a value of 8.40%, HRL is in the better half of the industry, outperforming 70.45% of the companies in the same industry.
In the last couple of years the Operating Margin of HRL has declined.
HRL's Gross Margin of 16.36% is in line compared to the rest of the industry. HRL outperforms 44.32% of its industry peers.
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.
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.
The debt/assets ratio for HRL has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.68 indicates that HRL is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.68, HRL is in the better half of the industry, outperforming 76.14% 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.
With a decent Debt to FCF ratio value of 4.55, HRL is doing good in the industry, outperforming 77.27% of the companies in the same industry.
A Debt/Equity ratio of 0.35 indicates that HRL is not too dependend on debt financing.
The Debt to Equity ratio of HRL (0.35) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 4.55 | ||
| Altman-Z | 3.68 |
ROIC/WACC0.87
WACC7.44%
2.3 Liquidity
A Current Ratio of 2.47 indicates that HRL has no problem at all paying its short term obligations.
With a decent Current ratio value of 2.47, HRL is doing good in the industry, outperforming 75.00% of the companies in the same industry.
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.
Looking at the Quick ratio, with a value of 1.12, HRL is in the better half of the industry, outperforming 67.05% of the companies in the same industry.
| 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%.
The Earnings Per Share has been decreasing by -1.91% on average over the past years.
HRL shows a small growth in Revenue. In the last year, the Revenue has grown by 0.65%.
The Revenue has been growing slightly by 4.65% on average over the past years.
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 5.76% yearly.
Based on estimates for the next years, HRL will show a small growth in Revenue. The Revenue will grow by 2.22% on average per year.
EPS Next Y2.92%
EPS Next 2Y6.89%
EPS Next 3Y8.8%
EPS Next 5Y5.76%
Revenue Next Year1.47%
Revenue Next 2Y2.06%
Revenue Next 3Y2.32%
Revenue Next 5Y2.22%
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
HRL is valuated rather expensively with a Price/Earnings ratio of 17.36.
61.36% 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 27.07, HRL is valued a bit cheaper.
The Price/Forward Earnings ratio is 14.14, which indicates a correct valuation of HRL.
Based on the Price/Forward Earnings ratio, HRL is valued a bit cheaper than the industry average as 70.45% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.59, HRL is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.36 | ||
| Fwd PE | 14.14 |
4.2 Price Multiples
HRL's Enterprise Value to EBITDA is on the same level as the industry average.
HRL's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. HRL is cheaper than 67.05% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.36 | ||
| EV/EBITDA | 12.76 |
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)5.95
PEG (5Y)N/A
EPS Next 2Y6.89%
EPS Next 3Y8.8%
5. Dividend
5.1 Amount
HRL has a Yearly Dividend Yield of 4.60%, which is a nice return.
Compared to an average industry Dividend Yield of 4.66, HRL pays a better dividend. On top of this HRL pays more dividend than 85.23% of the companies listed in the same industry.
HRL's Dividend Yield is rather good when compared to the S&P500 average which is at 2.46.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.6% |
5.2 History
The dividend of HRL is nicely growing with an annual growth rate of 6.53%!
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)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.
HRL's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP83.32%
EPS Next 2Y6.89%
EPS Next 3Y8.8%
25.52
-0.05 (-0.18%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners89.99%
Inst Owner Change0.52%
Ins Owners0.16%
Ins Owner Change0.03%
Market Cap14.03B
Analysts67.5
Price Target29.86 (17.01%)
Short Float %4%
Short Ratio3.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.6% |
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)-11.02%
PT rev (3m)-10.69%
EPS NQ rev (1m)-20.27%
EPS NQ rev (3m)-16.79%
EPS NY rev (1m)-0.18%
EPS NY rev (3m)-0.2%
Revenue NQ rev (1m)-0.46%
Revenue NQ rev (3m)-0.25%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.36 | ||
| Fwd PE | 14.14 | ||
| P/S | 1.16 | ||
| P/FCF | 22.36 | ||
| P/OCF | 15.07 | ||
| P/B | 1.74 | ||
| P/tB | 9.76 | ||
| EV/EBITDA | 12.76 |
EPS(TTM)1.47
EY5.76%
EPS(NY)1.81
Fwd EY7.07%
FCF(TTM)1.14
FCFY4.47%
OCF(TTM)1.69
OCFY6.63%
SpS21.93
BVpS14.7
TBVpS2.62
PEG (NY)5.95
PEG (5Y)N/A
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%
ROICexcg growth 3Y-7.22%
ROICexcg 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 | 3.68 |
F-Score5
WACC7.44%
ROIC/WACC0.87
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 Y2.92%
EPS Next 2Y6.89%
EPS Next 3Y8.8%
EPS Next 5Y5.76%
Revenue 1Y (TTM)0.65%
Revenue growth 3Y1.54%
Revenue growth 5Y4.65%
Sales Q2Q%4.64%
Revenue Next Year1.47%
Revenue Next 2Y2.06%
Revenue Next 3Y2.32%
Revenue Next 5Y2.22%
EBIT growth 1Y-1.83%
EBIT growth 3Y-1.84%
EBIT growth 5Y-2.55%
EBIT Next Year26.2%
EBIT Next 3Y13.93%
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%