HORMEL FOODS CORP (HRL)

US4404521001 - Common Stock

30.48  +0.11 (+0.36%)

After market: 30.48 0 (0%)

Fundamental Rating

4

We assign a fundamental rating of 4 out of 10 to HRL. HRL was compared to 93 industry peers in the Food Products industry. HRL has an average financial health and profitability rating. HRL is valued expensive and it does not seem to be growing. Finally HRL also has an excellent dividend rating. With these ratings, HRL could be worth investigating further for dividend investing!.



5

1. Profitability

1.1 Basic Checks

HRL had positive earnings in the past year.
HRL had a positive operating cash flow in the past year.
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

With a decent Return On Assets value of 5.42%, HRL is doing good in the industry, outperforming 68.48% of the companies in the same industry.
With a decent Return On Equity value of 9.72%, HRL is doing good in the industry, outperforming 65.22% of the companies in the same industry.
HRL has a better Return On Invested Capital (6.68%) than 71.74% of its industry peers.
HRL had an Average Return On Invested Capital over the past 3 years of 7.80%. This is in line with the industry average of 7.86%.
Industry RankSector Rank
ROA 5.42%
ROE 9.72%
ROIC 6.68%
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's Profit Margin of 6.37% is fine compared to the rest of the industry. HRL outperforms 73.91% of its industry peers.
HRL's Profit Margin has declined in the last couple of years.
HRL's Operating Margin of 8.39% is fine compared to the rest of the industry. HRL outperforms 72.83% of its industry peers.
In the last couple of years the Operating Margin of HRL has declined.
The Gross Margin of HRL (16.81%) is comparable to the rest of the industry.
HRL's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 8.39%
PM (TTM) 6.37%
GM 16.81%
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%

5

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.
HRL has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, HRL has more shares outstanding
HRL has a better debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 3.58 indicates that HRL is not in any danger for bankruptcy at the moment.
HRL has a Altman-Z score of 3.58. This is in the better half of the industry: HRL outperforms 77.17% of its industry peers.
The Debt to FCF ratio of HRL is 3.85, which is a good value as it means it would take HRL, 3.85 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.85, HRL is in the better half of the industry, outperforming 78.26% 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 59.78% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.36
Debt/FCF 3.85
Altman-Z 3.58
ROIC/WACC0.88
WACC7.62%

2.3 Liquidity

HRL has a Current Ratio of 1.73. 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 Current ratio of 1.73. This is comparable to the rest of the industry: HRL outperforms 58.70% of its industry peers.
A Quick Ratio of 1.00 indicates that HRL may have some problems paying its short term obligations.
The Quick ratio of HRL (1.00) is better than 60.87% of its industry peers.
Industry RankSector Rank
Current Ratio 1.73
Quick Ratio 1

3

3. Growth

3.1 Past

HRL shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.85%.
The Earnings Per Share has been decreasing by -1.87% on average over the past years.
HRL shows a decrease in Revenue. In the last year, the revenue decreased by -1.80%.
The Revenue has been growing slightly by 4.87% on average over the past years.
EPS 1Y (TTM)-5.85%
EPS 3Y-1.01%
EPS 5Y-1.87%
EPS Q2Q%-5%
Revenue 1Y (TTM)-1.8%
Revenue growth 3Y8.02%
Revenue growth 5Y4.87%
Sales Q2Q%-3.03%

3.2 Future

HRL is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.10% yearly.
The Revenue is expected to grow by 2.52% on average over the next years.
EPS Next Y-0.34%
EPS Next 2Y2.96%
EPS Next 3Y5.06%
EPS Next 5Y7.1%
Revenue Next Year-0.1%
Revenue Next 2Y0.93%
Revenue Next 3Y1.3%
Revenue Next 5Y2.52%

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.

3

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 18.93, HRL is valued on the expensive side.
HRL's Price/Earnings ratio is a bit cheaper when compared to the industry. HRL is cheaper than 68.48% of the companies in the same industry.
HRL is valuated rather cheaply when we compare the Price/Earnings ratio to 28.73, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 17.75 indicates a rather expensive valuation of HRL.
HRL's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. HRL is cheaper than 67.39% of the companies in the same industry.
HRL is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 20.21, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 18.93
Fwd PE 17.75

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 70.65% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 16.89
EV/EBITDA 15.15

4.3 Compensation for Growth

PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y2.96%
EPS Next 3Y5.06%

7

5. Dividend

5.1 Amount

HRL has a Yearly Dividend Yield of 3.69%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.72, HRL pays a better dividend. On top of this HRL pays more dividend than 84.78% 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 2.39.
Industry RankSector Rank
Dividend Yield 3.69%

5.2 History

On average, the dividend of HRL grows each year by 8.23%, which is quite nice.
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)8.23%
Div Incr Years33
Div Non Decr Years33

5.3 Sustainability

HRL pays out 78.95% of its income as dividend. 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.
DP78.95%
EPS Next 2Y2.96%
EPS Next 3Y5.06%

HORMEL FOODS CORP

NYSE:HRL (6/20/2024, 3:24:29 PM)

After market: 30.48 0 (0%)

30.48

+0.11 (+0.36%)

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 Cap16.71B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 3.69%
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)
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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)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
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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 RankSector Rank
PE 18.93
Fwd PE 17.75
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 RankSector Rank
ROA 5.42%
ROE 9.72%
ROCE
ROIC
ROICexc
ROICexgc
OM 8.39%
PM (TTM) 6.37%
GM 16.81%
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 Turnover0.85
Health
Industry RankSector Rank
Debt/Equity 0.36
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.73
Quick Ratio 1
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)
High Growth Momentum
Growth
EPS 1Y (TTM)-5.85%
EPS 3Y-1.01%
EPS 5Y
EPS Q2Q%
EPS Next Y-0.34%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-1.8%
Revenue growth 3Y8.02%
Revenue growth 5Y
Sales 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