HORMEL FOODS CORP (HRL) Stock Fundamental Analysis
USA - NYSE:HRL - US4404521001 - Common Stock
24.03 USD
+0.28 (+1.18%)
24.05 USD
+0.02 (+0.08%)
Overall HRL gets a fundamental rating of 5 out of 10. We evaluated HRL against 87 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 is valued correctly, but it does not seem to be growing. Finally 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.
Each year in the past 5 years HRL has been profitable.
Each year in the past 5 years HRL had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 5.59%, HRL is doing good in the industry, outperforming 77.01% of the companies in the same industry.
Looking at the Return On Equity, with a value of 9.33%, HRL is in the better half of the industry, outperforming 70.11% of the companies in the same industry.
HRL has a Return On Invested Capital of 6.50%. This is in the better half of the industry: HRL outperforms 70.11% of its industry peers.
HRL had an Average Return On Invested Capital over the past 3 years of 7.49%. This is significantly below the industry average of 28.34%.
| 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
Looking at the Profit Margin, with a value of 6.26%, HRL is in the better half of the industry, outperforming 75.86% of the companies in the same industry.
In the last couple of years the Profit Margin of HRL has declined.
HRL has a better Operating Margin (8.40%) than 71.26% of its industry peers.
In the last couple of years the Operating Margin of HRL has declined.
HRL has a Gross Margin of 16.36%. This is comparable to the rest of the industry: HRL outperforms 45.98% 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
HRL has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
HRL has more shares outstanding than it did 1 year ago.
HRL has more shares outstanding than it did 5 years ago.
HRL has a better debt/assets ratio than last year.
2.2 Solvency
HRL has an Altman-Z score of 3.58. This indicates that HRL is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 3.58, HRL is doing good in the industry, outperforming 75.86% 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's Debt to FCF ratio of 4.55 is fine compared to the rest of the industry. HRL outperforms 78.16% 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 of 0.35. This is comparable to the rest of the industry: HRL outperforms 57.47% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 4.55 | ||
| Altman-Z | 3.58 |
ROIC/WACC0.88
WACC7.36%
2.3 Liquidity
A Current Ratio of 2.47 indicates that HRL has no problem at all paying its short term obligations.
The Current ratio of HRL (2.47) is better than 74.71% of its industry peers.
A Quick Ratio of 1.12 indicates that HRL should not have too much problems paying its short term obligations.
HRL has a better Quick ratio (1.12) than 65.52% 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%.
The Earnings Per Share has been decreasing by -1.91% on average over the past years.
Looking at the last year, HRL shows a small growth in Revenue. The Revenue has grown by 0.65% in the last year.
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 4.18% yearly.
The Revenue is expected to grow by 2.28% on average over the next years.
EPS Next Y-7.85%
EPS Next 2Y-0.57%
EPS Next 3Y2.93%
EPS Next 5Y4.18%
Revenue Next Year1.71%
Revenue Next 2Y2.2%
Revenue Next 3Y2.36%
Revenue Next 5Y2.28%
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
The Price/Earnings ratio is 16.35, which indicates a correct valuation of HRL.
64.37% of the companies in the same industry are more expensive than HRL, based on the Price/Earnings ratio.
HRL is valuated rather cheaply when we compare the Price/Earnings ratio to 27.40, which is the current average of the S&P500 Index.
HRL is valuated correctly with a Price/Forward Earnings ratio of 15.39.
Based on the Price/Forward Earnings ratio, HRL is valued a bit cheaper than 71.26% of the companies in the same industry.
HRL's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.35 | ||
| Fwd PE | 15.39 |
4.2 Price Multiples
HRL's Enterprise Value to EBITDA is on the same level as the industry average.
67.82% of the companies in the same industry are more expensive than HRL, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.05 | ||
| EV/EBITDA | 12.1 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-0.57%
EPS Next 3Y2.93%
5. Dividend
5.1 Amount
HRL has a Yearly Dividend Yield of 4.88%, which is a nice return.
Compared to an average industry Dividend Yield of 5.02, HRL pays a better dividend. On top of this HRL pays more dividend than 82.76% 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 | 4.88% |
5.2 History
The dividend of HRL is nicely growing with an annual growth rate of 6.53%!
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)6.53%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
HRL pays out 83.32% of its income as dividend. 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 2Y-0.57%
EPS Next 3Y2.93%
24.03
+0.28 (+1.18%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners90.9%
Inst Owner Change0.19%
Ins Owners0.16%
Ins Owner Change0.04%
Market Cap13.22B
Analysts67.5
Price Target29.89 (24.39%)
Short Float %4.64%
Short Ratio3.44
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.88% |
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)-1.38%
EPS NQ rev (3m)-21.37%
EPS NY rev (1m)-10.46%
EPS NY rev (3m)-10.62%
Revenue NQ rev (1m)-0.03%
Revenue NQ rev (3m)-0.49%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)0.25%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.35 | ||
| Fwd PE | 15.39 | ||
| P/S | 1.1 | ||
| P/FCF | 21.05 | ||
| P/OCF | 14.2 | ||
| P/B | 1.64 | ||
| P/tB | 9.19 | ||
| EV/EBITDA | 12.1 |
EPS(TTM)1.47
EY6.12%
EPS(NY)1.56
Fwd EY6.5%
FCF(TTM)1.14
FCFY4.75%
OCF(TTM)1.69
OCFY7.04%
SpS21.92
BVpS14.7
TBVpS2.62
PEG (NY)N/A
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 | 3.58 |
F-Score5
WACC7.36%
ROIC/WACC0.88
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-7.85%
EPS Next 2Y-0.57%
EPS Next 3Y2.93%
EPS Next 5Y4.18%
Revenue 1Y (TTM)0.65%
Revenue growth 3Y1.54%
Revenue growth 5Y4.65%
Sales Q2Q%4.64%
Revenue Next Year1.71%
Revenue Next 2Y2.2%
Revenue Next 3Y2.36%
Revenue Next 5Y2.28%
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%