HERSHEY CO/THE (HSY)
US4278661081 - Common Stock
Overall HSY gets a fundamental rating of 6 out of 10. We evaluated HSY against 92 industry peers in the Food Products industry. While HSY belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. HSY is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
HSY had positive earnings in the past year.
HSY had a positive operating cash flow in the past year.
Each year in the past 5 years HSY has been profitable.
In the past 5 years HSY always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 16.72%, HSY belongs to the best of the industry, outperforming 97.80% of the companies in the same industry.
HSY's Return On Equity of 50.44% is amongst the best of the industry. HSY outperforms 98.90% of its industry peers.
HSY has a Return On Invested Capital of 23.87%. This is amongst the best in the industry. HSY outperforms 97.80% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for HSY is significantly above the industry average of 8.76%.
The 3 year average ROIC (21.99%) for HSY is below the current ROIC(23.87%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.72% | ||
| ROE | 50.44% | ||
| ROIC | 23.87% |
ROA(3y)14.95%
ROA(5y)14.6%
ROE(3y)49.62%
ROE(5y)54.44%
ROIC(3y)21.99%
ROIC(5y)22.23%
1.3 Margins
Looking at the Profit Margin, with a value of 18.13%, HSY belongs to the top of the industry, outperforming 94.51% of the companies in the same industry.
In the last couple of years the Profit Margin of HSY has grown nicely.
With an excellent Operating Margin value of 24.82%, HSY belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Operating Margin of HSY has remained more or less at the same level.
HSY has a better Gross Margin (46.31%) than 97.80% of its industry peers.
In the last couple of years the Gross Margin of HSY has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24.82% | ||
| PM (TTM) | 18.13% | ||
| GM | 46.31% |
OM growth 3Y0.84%
OM growth 5Y0.6%
PM growth 3Y2.05%
PM growth 5Y1.99%
GM growth 3Y-0.5%
GM growth 5Y-0.56%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), HSY is creating value.
The number of shares outstanding for HSY has been reduced compared to 1 year ago.
HSY has less shares outstanding than it did 5 years ago.
The debt/assets ratio for HSY has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 5.07 indicates that HSY is not in any danger for bankruptcy at the moment.
HSY has a better Altman-Z score (5.07) than 86.81% of its industry peers.
HSY has a debt to FCF ratio of 4.05. This is a neutral value as HSY would need 4.05 years to pay back of all of its debts.
HSY has a better Debt to FCF ratio (4.05) than 75.82% of its industry peers.
A Debt/Equity ratio of 1.24 is on the high side and indicates that HSY has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.24, HSY is doing worse than 75.82% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.24 | ||
| Debt/FCF | 4.05 | ||
| Altman-Z | 5.07 |
ROIC/WACC2.89
WACC8.25%
2.3 Liquidity
HSY has a Current Ratio of 0.97. This is a bad value and indicates that HSY is not financially healthy enough and could expect problems in meeting its short term obligations.
HSY has a Current ratio of 0.97. This is in the lower half of the industry: HSY underperforms 74.73% of its industry peers.
A Quick Ratio of 0.64 indicates that HSY may have some problems paying its short term obligations.
The Quick ratio of HSY (0.64) is worse than 67.03% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.64 |
3. Growth
3.1 Past
HSY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.38%, which is quite good.
The Earnings Per Share has been growing by 12.34% on average over the past years. This is quite good.
Looking at the last year, HSY shows a small growth in Revenue. The Revenue has grown by 6.42% in the last year.
The Revenue has been growing slightly by 7.46% on average over the past years.
EPS 1Y (TTM)8.38%
EPS 3Y15.09%
EPS 5Y12.34%
EPS Q2Q%3.72%
Revenue 1Y (TTM)6.42%
Revenue growth 3Y11.06%
Revenue growth 5Y7.46%
Sales Q2Q%8.87%
3.2 Future
Based on estimates for the next years, HSY will show a small growth in Earnings Per Share. The EPS will grow by 4.22% on average per year.
The Revenue is expected to grow by 3.45% on average over the next years.
EPS Next Y1.18%
EPS Next 2Y1.55%
EPS Next 3Y3.46%
EPS Next 5Y4.22%
Revenue Next Year2.05%
Revenue Next 2Y2.95%
Revenue Next 3Y3.29%
Revenue Next 5Y3.45%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
A Price/Earnings ratio of 19.95 indicates a rather expensive valuation of HSY.
Based on the Price/Earnings ratio, HSY is valued a bit cheaper than 63.74% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 24.41. HSY is around the same levels.
With a Price/Forward Earnings ratio of 19.57, HSY is valued on the expensive side.
Based on the Price/Forward Earnings ratio, HSY is valued a bit cheaper than the industry average as 63.74% of the companies are valued more expensively.
HSY is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 20.59, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.95 | ||
| Fwd PE | 19.57 |
4.2 Price Multiples
HSY's Enterprise Value to EBITDA ratio is in line with the industry average.
HSY's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.46 | ||
| EV/EBITDA | 13.02 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
HSY has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)16.93
PEG (5Y)1.62
EPS Next 2Y1.55%
EPS Next 3Y3.46%
5. Dividend
5.1 Amount
HSY has a Yearly Dividend Yield of 2.83%.
Compared to an average industry Dividend Yield of 3.74, HSY pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.30, HSY pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.83% |
5.2 History
The dividend of HSY is nicely growing with an annual growth rate of 10.18%!
HSY has been paying a dividend for at least 10 years, so it has a reliable track record.
HSY has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)10.18%
Div Incr Years14
Div Non Decr Years33
5.3 Sustainability
46.09% of the earnings are spent on dividend by HSY. This is a bit on the high side, but may be sustainable.
HSY's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP46.09%
EPS Next 2Y1.55%
EPS Next 3Y3.46%
HERSHEY CO/THE
NYSE:HSY (7/26/2024, 7:04:00 PM)
After market: 193.53 0 (0%)193.53
+0.86 (+0.45%)
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 Cap39.14B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.83% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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Revenue beat(2)
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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 Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.95 | ||
| Fwd PE | 19.57 | ||
| 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)16.93
PEG (5Y)1.62
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.72% | ||
| ROE | 50.44% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 24.82% | ||
| PM (TTM) | 18.13% | ||
| GM | 46.31% | ||
| 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 Turnover0.92
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.24 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.64 | ||
| 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)8.38%
EPS 3Y15.09%
EPS 5Y
EPS Q2Q%
EPS Next Y1.18%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)6.42%
Revenue growth 3Y11.06%
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