HERSHEY CO/THE (HSY)

US4278661081 - Common Stock

183.05  -3.93 (-2.1%)

After market: 183.19 +0.14 (+0.08%)

Fundamental Rating

6

HSY gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 93 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 not valued too expensively and it also shows a decent growth rate.



9

1. Profitability

1.1 Basic Checks

In the past year HSY was profitable.
HSY had a positive operating cash flow in the past year.
Each year in the past 5 years HSY has been profitable.
Each year in the past 5 years HSY had a positive operating cash flow.

1.2 Ratios

HSY's Return On Assets of 16.72% is amongst the best of the industry. HSY outperforms 98.91% of its industry peers.
HSY's Return On Equity of 50.44% is amongst the best of the industry. HSY outperforms 98.91% of its industry peers.
HSY has a better Return On Invested Capital (23.88%) than 98.91% 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 7.81%.
The 3 year average ROIC (21.99%) for HSY is below the current ROIC(23.88%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 16.72%
ROE 50.44%
ROIC 23.88%
ROA(3y)14.95%
ROA(5y)14.6%
ROE(3y)49.63%
ROE(5y)54.45%
ROIC(3y)21.99%
ROIC(5y)22.23%

1.3 Margins

With an excellent Profit Margin value of 18.13%, HSY belongs to the best of the industry, outperforming 94.57% of the companies in the same industry.
HSY's Profit Margin has improved in the last couple of years.
HSY has a Operating Margin of 24.82%. This is amongst the best in the industry. HSY outperforms 100.00% of its industry peers.
In the last couple of years the Operating Margin of HSY has remained more or less at the same level.
With an excellent Gross Margin value of 46.31%, HSY belongs to the best of the industry, outperforming 96.74% 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 RankSector Rank
OM 24.82%
PM (TTM) 18.13%
GM 46.31%
OM growth 3Y0.85%
OM growth 5Y0.61%
PM growth 3Y2.04%
PM growth 5Y1.98%
GM growth 3Y-0.5%
GM growth 5Y-0.56%

5

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 4.93 indicates that HSY is not in any danger for bankruptcy at the moment.
HSY has a better Altman-Z score (4.93) than 84.78% 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 Debt to FCF ratio of 4.05. This is in the better half of the industry: HSY outperforms 76.09% 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.
HSY has a Debt to Equity ratio of 1.24. This is in the lower half of the industry: HSY underperforms 76.09% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.24
Debt/FCF 4.05
Altman-Z 4.93
ROIC/WACC2.93
WACC8.15%

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 worse Current ratio (0.97) than 73.91% of its industry peers.
HSY has a Quick 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.
Looking at the Quick ratio, with a value of 0.64, HSY is doing worse than 67.39% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 0.97
Quick Ratio 0.64

4

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.
HSY shows a small growth in Revenue. In the last year, the Revenue has grown by 6.42%.
HSY shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.46% yearly.
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

The Earnings Per Share is expected to grow by 4.18% on average over the next years.
Based on estimates for the next years, HSY will show a small growth in Revenue. The Revenue will grow by 3.41% on average per year.
EPS Next Y1.18%
EPS Next 2Y1.55%
EPS Next 3Y3.46%
EPS Next 5Y4.18%
Revenue Next Year2.05%
Revenue Next 2Y2.95%
Revenue Next 3Y3.29%
Revenue Next 5Y3.41%

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

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 18.87, the valuation of HSY can be described as rather expensive.
69.57% of the companies in the same industry are more expensive than HSY, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.66, HSY is valued a bit cheaper.
The Price/Forward Earnings ratio is 18.51, which indicates a rather expensive current valuation of HSY.
Based on the Price/Forward Earnings ratio, HSY is valued a bit cheaper than the industry average as 65.22% 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 20.15, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 18.87
Fwd PE 18.51

4.2 Price Multiples

61.96% of the companies in the same industry are more expensive than HSY, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as HSY.
Industry RankSector Rank
P/FCF 27.86
EV/EBITDA 12.43

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates HSY does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of HSY may justify a higher PE ratio.
PEG (NY)16.01
PEG (5Y)1.53
EPS Next 2Y1.55%
EPS Next 3Y3.46%

6

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 2.95%, HSY has a reasonable but not impressive dividend return.
HSY's Dividend Yield is a higher than the industry average which is at 3.72.
HSY's Dividend Yield is a higher than the S&P500 average which is at 2.39.
Industry RankSector Rank
Dividend Yield 2.95%

5.2 History

The dividend of HSY is nicely growing with an annual growth rate of 10.20%!
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)10.2%
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 (6/17/2024, 7:04:00 PM)

After market: 183.19 +0.14 (+0.08%)

183.05

-3.93 (-2.1%)

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 Cap37.02B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 2.95%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
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 RankSector Rank
PE 18.87
Fwd PE 18.51
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)16.01
PEG (5Y)1.53
Profitability
Industry RankSector 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 RankSector 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