HERSHEY CO/THE (HSY) Stock Fundamental Analysis
NYSE:HSY - New York Stock Exchange, Inc. - US4278661081 - Common Stock - Currency: USD
Taking everything into account, HSY scores 6 out of 10 in our fundamental rating. HSY was compared to 91 industry peers in the Food Products industry. Both the health and profitability get an excellent rating, making HSY a very profitable company, without any liquidiy or solvency issues. HSY has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
HSY had positive earnings in the past year.
In the past year HSY had a positive cash flow from operations.
HSY had positive earnings in each of the past 5 years.
In the past 5 years HSY always reported a positive cash flow from operatings.
1.2 Ratios
HSY's Return On Assets of 11.80% is amongst the best of the industry. HSY outperforms 94.51% of its industry peers.
HSY's Return On Equity of 35.18% is amongst the best of the industry. HSY outperforms 96.70% of its industry peers.
HSY's Return On Invested Capital of 18.35% is amongst the best of the industry. HSY outperforms 96.70% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for HSY is below the industry average of 28.40%.
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 94.51% of its industry peers.
In the last couple of years the Profit Margin of HSY has grown nicely.
HSY's Operating Margin of 21.57% is amongst the best of the industry. HSY outperforms 97.80% of its industry peers.
HSY's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 42.57%, HSY belongs to the top of the industry, outperforming 96.70% of the companies in the same industry.
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 | 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.
HSY has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, HSY has less shares outstanding
Compared to 1 year ago, HSY has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.36 indicates that HSY is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.36, HSY belongs to the top of the industry, outperforming 82.42% of the companies in the same industry.
The Debt to FCF ratio of HSY is 3.25, which is a good value as it means it would take HSY, 3.25 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.25, HSY belongs to the top of the industry, outperforming 82.42% of the companies in the same industry.
HSY has a Debt/Equity ratio of 1.14. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.14, HSY is not doing good in the industry: 73.63% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.14 | ||
| Debt/FCF | 3.25 | ||
| Altman-Z | 4.36 |
ROIC/WACC1.86
WACC9.88%
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.
HSY has a better Quick ratio (1.11) than 65.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.59 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
The earnings per share for HSY have decreased strongly by -13.51% in the last year.
The Earnings Per Share has been growing by 10.11% on average over the past years. This is quite good.
Looking at the last year, HSY shows a decrease in Revenue. The Revenue has decreased by -5.91% in the last year.
The Revenue has been growing slightly by 7.00% on average over the past years.
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 1.71% yearly.
The Revenue is expected to grow by 2.87% on average over the next years.
EPS Next Y-35.59%
EPS Next 2Y-16.27%
EPS Next 3Y-6.28%
EPS Next 5Y1.71%
Revenue Next Year2.46%
Revenue Next 2Y2.75%
Revenue Next 3Y2.66%
Revenue Next 5Y2.87%
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 21.03 indicates a rather expensive valuation of HSY.
Compared to the rest of the industry, the Price/Earnings ratio of HSY is on the same level as its industry peers.
When comparing the Price/Earnings ratio of HSY to the average of the S&P500 Index (27.28), we can say HSY is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 26.87, the valuation of HSY can be described as expensive.
HSY's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of HSY to the average of the S&P500 Index (21.76), we can say HSY is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.03 | ||
| Fwd PE | 26.87 |
4.2 Price Multiples
HSY's Enterprise Value to EBITDA ratio is in line with the industry average.
HSY's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. HSY is cheaper than 69.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.63 | ||
| EV/EBITDA | 14.4 |
4.3 Compensation for Growth
The excellent profitability rating of HSY may justify a higher PE ratio.
HSY's earnings are expected to decrease with -6.28% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)2.08
EPS Next 2Y-16.27%
EPS Next 3Y-6.28%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.28%, HSY has a reasonable but not impressive dividend return.
HSY's Dividend Yield is a higher than the industry average which is at 4.75.
HSY's Dividend Yield is a higher than the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.28% |
5.2 History
On average, the dividend of HSY grows each year by 12.83%, which is quite nice.
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)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.
HSY's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP65.72%
EPS Next 2Y-16.27%
EPS Next 3Y-6.28%
176.47
-0.61 (-0.34%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners121.15%
Inst Owner Change0.7%
Ins Owners0.19%
Ins Owner Change5.95%
Market Cap35.75B
Analysts56.36
Price Target166.94 (-5.4%)
Short Float %6.36%
Short Ratio5.38
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.28% |
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)-0.9%
PT rev (3m)1.61%
EPS NQ rev (1m)-1.07%
EPS NQ rev (3m)-21.78%
EPS NY rev (1m)0.27%
EPS NY rev (3m)-3.01%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)0.08%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.03 | ||
| Fwd PE | 26.87 | ||
| P/S | 3.32 | ||
| P/FCF | 19.63 | ||
| P/OCF | 15.16 | ||
| P/B | 7.63 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.4 |
EPS(TTM)8.39
EY4.75%
EPS(NY)6.57
Fwd EY3.72%
FCF(TTM)8.99
FCFY5.09%
OCF(TTM)11.64
OCFY6.6%
SpS53.08
BVpS23.12
TBVpS-1.17
PEG (NY)N/A
PEG (5Y)2.08
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 | 4.36 |
F-Score4
WACC9.88%
ROIC/WACC1.86
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-35.59%
EPS Next 2Y-16.27%
EPS Next 3Y-6.28%
EPS Next 5Y1.71%
Revenue 1Y (TTM)-5.91%
Revenue growth 3Y7.68%
Revenue growth 5Y7%
Sales Q2Q%-13.75%
Revenue Next Year2.46%
Revenue Next 2Y2.75%
Revenue Next 3Y2.66%
Revenue Next 5Y2.87%
EBIT growth 1Y-18.22%
EBIT growth 3Y12.42%
EBIT growth 5Y11.34%
EBIT Next Year-11.97%
EBIT Next 3Y1.21%
EBIT Next 5Y3.93%
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%