HERSHEY CO/THE (HSY) Stock Fundamental Analysis
NYSE:HSY - New York Stock Exchange, Inc. - US4278661081 - Common Stock - Currency: USD
Overall HSY gets a fundamental rating of 6 out of 10. We evaluated HSY against 90 industry peers in the Food Products industry. While HSY has a great profitability rating, there are some minor concerns on its financial health. HSY is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year HSY was profitable.
In the past year HSY had a positive cash flow from operations.
In the past 5 years HSY has always been profitable.
Each year in the past 5 years HSY had a positive operating cash flow.
1.2 Ratios
The Return On Assets of HSY (11.80%) is better than 93.33% of its industry peers.
HSY has a Return On Equity of 35.18%. This is amongst the best in the industry. HSY outperforms 95.56% of its industry peers.
HSY has a Return On Invested Capital of 18.35%. This is amongst the best in the industry. HSY outperforms 96.67% of its industry peers.
HSY had an Average Return On Invested Capital over the past 3 years of 23.99%. This is significantly above the industry average of 8.67%.
The last Return On Invested Capital (18.35%) for HSY is well below the 3 year average (23.99%), which needs to be investigated, but indicates that HSY had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.8% | ||
| ROE | 35.18% | ||
| ROIC | 18.35% |
ROA(3y)15.94%
ROA(5y)15.2%
ROE(3y)47.46%
ROE(5y)50.64%
ROIC(3y)23.99%
ROIC(5y)22.85%
1.3 Margins
HSY's Profit Margin of 15.32% is amongst the best of the industry. HSY outperforms 95.56% of its industry peers.
HSY's Profit Margin has improved in the last couple of years.
The Operating Margin of HSY (21.57%) is better than 97.78% of its industry peers.
In the last couple of years the Operating Margin of HSY has grown nicely.
With an excellent Gross Margin value of 42.57%, HSY belongs to the best of the industry, outperforming 96.67% of the companies in the same industry.
HSY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.57% | ||
| PM (TTM) | 15.32% | ||
| GM | 42.57% |
OM growth 3Y4.4%
OM growth 5Y4.06%
PM growth 3Y6.38%
PM growth 5Y6.61%
GM growth 3Y1.55%
GM growth 5Y0.85%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), HSY is creating value.
Compared to 1 year ago, HSY has less shares outstanding
HSY has less shares outstanding than it did 5 years ago.
HSY has a better debt/assets ratio than last year.
2.2 Solvency
HSY has an Altman-Z score of 4.09. This indicates that HSY is financially healthy and has little risk of bankruptcy at the moment.
HSY has a Altman-Z score of 4.09. This is in the better half of the industry: HSY outperforms 80.00% of its industry peers.
HSY has a debt to FCF ratio of 3.25. This is a good value and a sign of high solvency as HSY would need 3.25 years to pay back of all of its debts.
HSY has a better Debt to FCF ratio (3.25) than 75.56% of its industry peers.
HSY has a Debt/Equity ratio of 1.14. This is a high value indicating a heavy dependency on external financing.
HSY's Debt to Equity ratio of 1.14 is on the low side compared to the rest of the industry. HSY is outperformed by 76.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.14 | ||
| Debt/FCF | 3.25 | ||
| Altman-Z | 4.09 |
ROIC/WACC2.21
WACC8.3%
2.3 Liquidity
A Current Ratio of 1.59 indicates that HSY should not have too much problems paying its short term obligations.
HSY has a Current ratio (1.59) which is comparable to the rest of the industry.
A Quick Ratio of 1.11 indicates that HSY should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.11, HSY is doing good in the industry, outperforming 67.78% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.59 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
HSY shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -13.51%.
Measured over the past years, HSY shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.11% on average per year.
The Revenue has decreased by -5.91% in the past year.
Measured over the past years, HSY shows a small growth in Revenue. The Revenue has been growing by 7.00% on average per year.
EPS 1Y (TTM)-13.51%
EPS 3Y9.28%
EPS 5Y10.11%
EPS Q2Q%-31.92%
Revenue 1Y (TTM)-5.91%
Revenue growth 3Y7.68%
Revenue growth 5Y7%
Sales Q2Q%-13.75%
3.2 Future
HSY is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 1.15% yearly.
The Revenue is expected to grow by 2.96% on average over the next years.
EPS Next Y-35.76%
EPS Next 2Y-16.83%
EPS Next 3Y-7.05%
EPS Next 5Y1.15%
Revenue Next Year2.42%
Revenue Next 2Y2.75%
Revenue Next 3Y2.61%
Revenue Next 5Y2.96%
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 decreasing.
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 18.56, which indicates a rather expensive current valuation of HSY.
HSY's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 26.60, HSY is valued a bit cheaper.
HSY is valuated rather expensively with a Price/Forward Earnings ratio of 24.02.
The rest of the industry has a similar Price/Forward Earnings ratio as HSY.
HSY's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.56 | ||
| Fwd PE | 24.02 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as HSY.
HSY's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. HSY is cheaper than 64.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.32 | ||
| EV/EBITDA | 12.91 |
4.3 Compensation for Growth
HSY has an outstanding profitability rating, which may justify a higher PE ratio.
HSY's earnings are expected to decrease with -7.05% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)1.84
EPS Next 2Y-16.83%
EPS Next 3Y-7.05%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.35%, HSY has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.58, HSY pays a bit more dividend than its industry peers.
HSY's Dividend Yield is a higher than the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.35% |
5.2 History
On average, the dividend of HSY grows each year by 12.83%, which is quite nice.
HSY has paid a dividend for at least 10 years, which is a reliable track record.
HSY has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)12.83%
Div Incr Years15
Div Non Decr Years34
5.3 Sustainability
65.72% of the earnings are spent on dividend by HSY. This is not a sustainable payout ratio.
The dividend of HSY is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP65.72%
EPS Next 2Y-16.83%
EPS Next 3Y-7.05%
155.7
-0.85 (-0.54%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners86.36%
Inst Owner Change1.06%
Ins Owners0.13%
Ins Owner Change5.87%
Market Cap31.54B
Analysts56.36
Price Target168.46 (8.2%)
Short Float %5.58%
Short Ratio4.89
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.35% |
Yearly Dividend5.33
Dividend Growth(5Y)12.83%
DP65.72%
Div Incr Years15
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)9.23%
Min EPS beat(2)6.26%
Max EPS beat(2)12.21%
EPS beat(4)2
Avg EPS beat(4)-0.81%
Min EPS beat(4)-12.15%
Max EPS beat(4)12.21%
EPS beat(8)6
Avg EPS beat(8)2.32%
EPS beat(12)10
Avg EPS beat(12)4.1%
EPS beat(16)14
Avg EPS beat(16)4.85%
Revenue beat(2)1
Avg Revenue beat(2)0.03%
Min Revenue beat(2)-0.59%
Max Revenue beat(2)0.65%
Revenue beat(4)1
Avg Revenue beat(4)-3.7%
Min Revenue beat(4)-10.97%
Max Revenue beat(4)0.65%
Revenue beat(8)3
Avg Revenue beat(8)-1.73%
Revenue beat(12)7
Avg Revenue beat(12)-0.12%
Revenue beat(16)11
Avg Revenue beat(16)1.36%
PT rev (1m)1.7%
PT rev (3m)-4.4%
EPS NQ rev (1m)-21.88%
EPS NQ rev (3m)-20.49%
EPS NY rev (1m)-2.82%
EPS NY rev (3m)-8.37%
Revenue NQ rev (1m)-0.12%
Revenue NQ rev (3m)2.51%
Revenue NY rev (1m)0.16%
Revenue NY rev (3m)0.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.56 | ||
| Fwd PE | 24.02 | ||
| P/S | 2.93 | ||
| P/FCF | 17.32 | ||
| P/OCF | 13.37 | ||
| P/B | 6.73 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.91 |
EPS(TTM)8.39
EY5.39%
EPS(NY)6.48
Fwd EY4.16%
FCF(TTM)8.99
FCFY5.77%
OCF(TTM)11.65
OCFY7.48%
SpS53.1
BVpS23.13
TBVpS-1.17
PEG (NY)N/A
PEG (5Y)1.84
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.8% | ||
| ROE | 35.18% | ||
| ROCE | 21.18% | ||
| ROIC | 18.35% | ||
| ROICexc | 21.25% | ||
| ROICexgc | 43.69% | ||
| OM | 21.57% | ||
| PM (TTM) | 15.32% | ||
| GM | 42.57% | ||
| FCFM | 16.93% |
ROA(3y)15.94%
ROA(5y)15.2%
ROE(3y)47.46%
ROE(5y)50.64%
ROIC(3y)23.99%
ROIC(5y)22.85%
ROICexc(3y)25.42%
ROICexc(5y)24.68%
ROICexgc(3y)57.82%
ROICexgc(5y)56.6%
ROCE(3y)30.24%
ROCE(5y)28.38%
ROICexcg growth 3Y3.23%
ROICexcg growth 5Y-4.21%
ROICexc growth 3Y8.1%
ROICexc growth 5Y0.23%
OM growth 3Y4.4%
OM growth 5Y4.06%
PM growth 3Y6.38%
PM growth 5Y6.61%
GM growth 3Y1.55%
GM growth 5Y0.85%
F-Score4
Asset Turnover0.77
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.14 | ||
| Debt/FCF | 3.25 | ||
| Debt/EBITDA | 1.91 | ||
| Cap/Depr | 115.23% | ||
| Cap/Sales | 5% | ||
| Interest Coverage | 12.59 | ||
| Cash Conversion | 84.65% | ||
| Profit Quality | 110.5% | ||
| Current Ratio | 1.59 | ||
| Quick Ratio | 1.11 | ||
| Altman-Z | 4.09 |
F-Score4
WACC8.3%
ROIC/WACC2.21
Cap/Depr(3y)151.29%
Cap/Depr(5y)152.21%
Cap/Sales(3y)5.77%
Cap/Sales(5y)5.65%
Profit Quality(3y)93.33%
Profit Quality(5y)97.13%
High Growth Momentum
Growth
EPS 1Y (TTM)-13.51%
EPS 3Y9.28%
EPS 5Y10.11%
EPS Q2Q%-31.92%
EPS Next Y-35.76%
EPS Next 2Y-16.83%
EPS Next 3Y-7.05%
EPS Next 5Y1.15%
Revenue 1Y (TTM)-5.91%
Revenue growth 3Y7.68%
Revenue growth 5Y7%
Sales Q2Q%-13.75%
Revenue Next Year2.42%
Revenue Next 2Y2.75%
Revenue Next 3Y2.61%
Revenue Next 5Y2.96%
EBIT growth 1Y-18.22%
EBIT growth 3Y12.42%
EBIT growth 5Y11.34%
EBIT Next Year-10.82%
EBIT Next 3Y1.75%
EBIT Next 5Y4.55%
FCF growth 1Y-2.74%
FCF growth 3Y6.4%
FCF growth 5Y5.9%
OCF growth 1Y-2.79%
OCF growth 3Y6.52%
OCF growth 5Y7.49%