HERSHEY CO/THE (HSY) Stock Fundamental Analysis
NYSE:HSY - US4278661081 - Common Stock
179.99 USD
-1.67 (-0.92%)
180.19 USD
+0.2 (+0.11%)
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 belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. HSY has a valuation in line with the averages, but on the other hand it 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.
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 (11.21%) is better than 94.44% of its industry peers.
The Return On Equity of HSY (33.89%) is better than 98.89% of its industry peers.
With an excellent Return On Invested Capital value of 17.69%, HSY belongs to the best of the industry, outperforming 95.56% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for HSY is below the industry average of 27.81%.
The last Return On Invested Capital (17.69%) 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 | 11.21% | ||
| ROE | 33.89% | ||
| ROIC | 17.69% |
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
Looking at the Profit Margin, with a value of 13.54%, HSY belongs to the top of the industry, outperforming 94.44% 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 19.49%, HSY belongs to the top of the industry, outperforming 95.56% of the companies in the same industry.
HSY's Operating Margin has improved in the last couple of years.
HSY has a Gross Margin of 40.13%. This is amongst the best in the industry. HSY outperforms 90.00% 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 | 19.49% | ||
| PM (TTM) | 13.54% | ||
| GM | 40.13% |
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
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 4.47 indicates that HSY is not in any danger for bankruptcy at the moment.
HSY has a better Altman-Z score (4.47) than 85.56% of its industry peers.
HSY has a debt to FCF ratio of 3.57. This is a good value and a sign of high solvency as HSY would need 3.57 years to pay back of all of its debts.
HSY has a better Debt to FCF ratio (3.57) than 81.11% of its industry peers.
HSY has a Debt/Equity ratio of 1.18. This is a high value indicating a heavy dependency on external financing.
HSY has a worse Debt to Equity ratio (1.18) than 74.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.18 | ||
| Debt/FCF | 3.57 | ||
| Altman-Z | 4.47 |
ROIC/WACC2.16
WACC8.2%
2.3 Liquidity
HSY has a Current Ratio of 1.53. This is a normal value and indicates that HSY is financially healthy and should not expect problems in meeting its short term obligations.
HSY has a Current ratio (1.53) which is comparable to the rest of the industry.
HSY has a Quick Ratio of 1.53. 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 Quick ratio (0.89) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.53 | ||
| Quick Ratio | 0.89 |
3. Growth
3.1 Past
HSY shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -7.03%.
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.
HSY shows a small growth in Revenue. In the last year, the Revenue has grown by 2.55%.
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)-7.03%
EPS 3Y9.28%
EPS 5Y10.11%
EPS Q2Q%-4.72%
Revenue 1Y (TTM)2.55%
Revenue growth 3Y7.68%
Revenue growth 5Y7%
Sales Q2Q%26.04%
3.2 Future
HSY is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.40% yearly.
HSY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.26% yearly.
EPS Next Y-36.08%
EPS Next 2Y-15.14%
EPS Next 3Y-6.32%
EPS Next 5Y3.4%
Revenue Next Year2.99%
Revenue Next 2Y3.4%
Revenue Next 3Y3.07%
Revenue Next 5Y3.26%
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 21.61, which indicates a rather expensive current valuation of HSY.
The rest of the industry has a similar Price/Earnings ratio as HSY.
HSY is valuated rather cheaply when we compare the Price/Earnings ratio to 27.17, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 26.67, HSY can be considered very expensive at the moment.
The rest of the industry has a similar Price/Forward Earnings ratio as HSY.
The average S&P500 Price/Forward Earnings ratio is at 22.78. HSY is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.61 | ||
| Fwd PE | 26.67 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as HSY.
Based on the Price/Free Cash Flow ratio, HSY is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.11 | ||
| EV/EBITDA | 15.44 |
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 -6.32% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)2.14
EPS Next 2Y-15.14%
EPS Next 3Y-6.32%
5. Dividend
5.1 Amount
HSY has a Yearly Dividend Yield of 3.06%.
Compared to an average industry Dividend Yield of 4.61, HSY pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.34, HSY pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.06% |
5.2 History
The dividend of HSY is nicely growing with an annual growth rate of 12.83%!
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
70.84% 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.
DP70.84%
EPS Next 2Y-15.14%
EPS Next 3Y-6.32%
179.99
-1.67 (-0.92%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners84.52%
Inst Owner Change3.26%
Ins Owners0.19%
Ins Owner Change1.09%
Market Cap36.49B
Analysts56.25
Price Target187.51 (4.18%)
Short Float %6.94%
Short Ratio5.59
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.06% |
Yearly Dividend5.33
Dividend Growth(5Y)12.83%
DP70.84%
Div Incr Years15
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)13.54%
Min EPS beat(2)6.26%
Max EPS beat(2)20.83%
EPS beat(4)3
Avg EPS beat(4)7.44%
Min EPS beat(4)-9.53%
Max EPS beat(4)20.83%
EPS beat(8)6
Avg EPS beat(8)4.38%
EPS beat(12)10
Avg EPS beat(12)5.38%
EPS beat(16)14
Avg EPS beat(16)6.03%
Revenue beat(2)1
Avg Revenue beat(2)1.02%
Min Revenue beat(2)-0.59%
Max Revenue beat(2)2.62%
Revenue beat(4)2
Avg Revenue beat(4)-0.3%
Min Revenue beat(4)-3.88%
Max Revenue beat(4)2.62%
Revenue beat(8)4
Avg Revenue beat(8)-1.21%
Revenue beat(12)7
Avg Revenue beat(12)-0.37%
Revenue beat(16)11
Avg Revenue beat(16)1.07%
PT rev (1m)12.15%
PT rev (3m)11.31%
EPS NQ rev (1m)-21.67%
EPS NQ rev (3m)-27.69%
EPS NY rev (1m)-0.1%
EPS NY rev (3m)-0.5%
Revenue NQ rev (1m)-0.76%
Revenue NQ rev (3m)-0.32%
Revenue NY rev (1m)0.46%
Revenue NY rev (3m)0.55%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.61 | ||
| Fwd PE | 26.67 | ||
| P/S | 3.23 | ||
| P/FCF | 23.11 | ||
| P/OCF | 17 | ||
| P/B | 8.08 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.44 |
EPS(TTM)8.33
EY4.63%
EPS(NY)6.75
Fwd EY3.75%
FCF(TTM)7.79
FCFY4.33%
OCF(TTM)10.58
OCFY5.88%
SpS55.72
BVpS22.27
TBVpS-2.3
PEG (NY)N/A
PEG (5Y)2.14
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.21% | ||
| ROE | 33.89% | ||
| ROCE | 20.47% | ||
| ROIC | 17.69% | ||
| ROICexc | 19.3% | ||
| ROICexgc | 38.44% | ||
| OM | 19.49% | ||
| PM (TTM) | 13.54% | ||
| GM | 40.13% | ||
| FCFM | 13.98% |
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 Turnover0.83
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.18 | ||
| Debt/FCF | 3.57 | ||
| Debt/EBITDA | 1.99 | ||
| Cap/Depr | 117.95% | ||
| Cap/Sales | 5.02% | ||
| Interest Coverage | 11.92 | ||
| Cash Conversion | 80.02% | ||
| Profit Quality | 103.22% | ||
| Current Ratio | 1.53 | ||
| Quick Ratio | 0.89 | ||
| Altman-Z | 4.47 |
F-Score4
WACC8.2%
ROIC/WACC2.16
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)-7.03%
EPS 3Y9.28%
EPS 5Y10.11%
EPS Q2Q%-4.72%
EPS Next Y-36.08%
EPS Next 2Y-15.14%
EPS Next 3Y-6.32%
EPS Next 5Y3.4%
Revenue 1Y (TTM)2.55%
Revenue growth 3Y7.68%
Revenue growth 5Y7%
Sales Q2Q%26.04%
Revenue Next Year2.99%
Revenue Next 2Y3.4%
Revenue Next 3Y3.07%
Revenue Next 5Y3.26%
EBIT growth 1Y-15.39%
EBIT growth 3Y12.42%
EBIT growth 5Y11.34%
EBIT Next Year-10.22%
EBIT Next 3Y3.26%
EBIT Next 5Y6.27%
FCF growth 1Y-4.58%
FCF growth 3Y6.4%
FCF growth 5Y5.9%
OCF growth 1Y-5.22%
OCF growth 3Y6.52%
OCF growth 5Y7.49%