HERSHEY CO/THE (HSY)
US4278661081 - Common Stock
Taking everything into account, HSY scores 6 out of 10 in our fundamental rating. HSY was compared to 92 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 not valued too expensively and it also shows a decent growth rate.
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.
In the past 5 years HSY has always been profitable.
HSY had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of HSY (15.40%) is better than 96.70% of its industry peers.
HSY has a Return On Equity of 46.31%. This is amongst the best in the industry. HSY outperforms 97.80% of its industry peers.
The Return On Invested Capital of HSY (21.67%) is better than 96.70% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HSY is significantly above the industry average of 8.24%.
The 3 year average ROIC (21.10%) for HSY is below the current ROIC(21.67%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.4% | ||
| ROE | 46.31% | ||
| ROIC | 21.67% |
ROA(3y)14.41%
ROA(5y)14.53%
ROE(3y)53.57%
ROE(5y)62.21%
ROIC(3y)21.1%
ROIC(5y)21.83%
1.3 Margins
Looking at the Profit Margin, with a value of 16.71%, HSY belongs to the top of the industry, outperforming 91.21% of the companies in the same industry.
HSY's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 22.99%, HSY belongs to the top of the industry, outperforming 97.80% of the companies in the same industry.
HSY's Operating Margin has been stable in the last couple of years.
HSY's Gross Margin of 44.57% is amongst the best of the industry. HSY outperforms 95.60% of its industry peers.
HSY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.99% | ||
| PM (TTM) | 16.71% | ||
| GM | 44.57% |
OM growth 3Y0.52%
OM growth 5Y0.59%
PM growth 3Y3.12%
PM growth 5Y8.67%
GM growth 3Y-1.62%
GM growth 5Y-1.28%
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.
The number of shares outstanding for HSY has been reduced compared to 5 years ago.
Compared to 1 year ago, HSY has an improved debt to assets ratio.
2.2 Solvency
HSY has an Altman-Z score of 5.06. This indicates that HSY is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of HSY (5.06) is better than 87.91% of its industry peers.
The Debt to FCF ratio of HSY is 3.02, which is a good value as it means it would take HSY, 3.02 years of fcf income to pay off all of its debts.
HSY has a better Debt to FCF ratio (3.02) than 81.32% of its industry peers.
HSY has a Debt/Equity ratio of 1.24. This is a high value indicating a heavy dependency on external financing.
HSY has a Debt to Equity ratio of 1.24. This is amonst the worse of the industry: HSY underperforms 80.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.24 | ||
| Debt/FCF | 3.02 | ||
| Altman-Z | 5.06 |
ROIC/WACC2.65
WACC8.17%
2.3 Liquidity
A Current Ratio of 1.09 indicates that HSY should not have too much problems paying its short term obligations.
HSY's Current ratio of 1.09 is on the low side compared to the rest of the industry. HSY is outperformed by 78.02% of its industry peers.
A Quick Ratio of 0.63 indicates that HSY may have some problems paying its short term obligations.
The Quick ratio of HSY (0.63) is worse than 73.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.63 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 17.09% over the past year.
HSY shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 12.35% yearly.
Looking at the last year, HSY shows a small growth in Revenue. The Revenue has grown by 7.20% in the last year.
The Revenue has been growing slightly by 6.75% on average over the past years.
EPS 1Y (TTM)17.09%
EPS 3Y13.74%
EPS 5Y12.35%
EPS growth Q2Q19.82%
Revenue 1Y (TTM)7.2%
Revenue growth 3Y9.27%
Revenue growth 5Y6.75%
Revenue growth Q2Q11.06%
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 6.96% on average per year.
Based on estimates for the next years, HSY will show a small growth in Revenue. The Revenue will grow by 4.88% on average per year.
EPS Next Y12.94%
EPS Next 2Y10.34%
EPS Next 3Y9.29%
EPS Next 5Y6.96%
Revenue Next Year8.63%
Revenue Next 2Y6.38%
Revenue Next 3Y5.39%
Revenue Next 5Y4.88%
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
The Price/Earnings ratio is 19.79, which indicates a rather expensive current valuation of HSY.
Compared to the rest of the industry, the Price/Earnings ratio of HSY indicates a somewhat cheap valuation: HSY is cheaper than 68.13% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 24.81, HSY is valued a bit cheaper.
With a Price/Forward Earnings ratio of 18.30, HSY is valued on the expensive side.
HSY's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. HSY is cheaper than 67.03% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 19.91. HSY is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.79 | ||
| Fwd PE | 18.3 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as HSY.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of HSY indicates a somewhat cheap valuation: HSY is cheaper than 65.93% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.89 | ||
| EV/EBITDA | 14.35 |
4.3 Compensation for Growth
HSY's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of HSY may justify a higher PE ratio.
PEG (NY)1.53
PEG (5Y)1.6
EPS Next 2Y10.34%
EPS Next 3Y9.29%
5. Dividend
5.1 Amount
HSY has a Yearly Dividend Yield of 2.54%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.57, HSY pays a bit more dividend than its industry peers.
HSY's Dividend Yield is comparable with the S&P500 average which is at 2.59.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.54% |
5.2 History
The dividend of HSY is nicely growing with an annual growth rate of 8.67%!
HSY has paid a dividend for at least 10 years, which is a reliable track record.
HSY has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)8.67%
Div Incr Years14
Div Non Decr Years18
5.3 Sustainability
46.71% of the earnings are spent on dividend by HSY. This is a bit on the high side, but may be sustainable.
The dividend of HSY is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP46.71%
EPS Next 2Y10.34%
EPS Next 3Y9.29%
HERSHEY CO/THE
NYSE:HSY (12/6/2023, 11:42:19 AM)
189.824
+1.89 (+1.01%)
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 Cap38.82B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.54% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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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 | 19.79 | ||
| Fwd PE | 18.3 | ||
| 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)1.53
PEG (5Y)1.6
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.4% | ||
| ROE | 46.31% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 22.99% | ||
| PM (TTM) | 16.71% | ||
| GM | 44.57% | ||
| 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 | 1.09 | ||
| Quick Ratio | 0.63 | ||
| 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)
Growth
EPS 1Y (TTM)17.09%
EPS 3Y13.74%
EPS 5Y
EPS growth Q2Q
EPS Next Y12.94%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)7.2%
Revenue growth 3Y9.27%
Revenue growth 5Y
Revenue growth 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