HERSHEY CO/THE (HSY) Stock Fundamental Analysis
NYSE:HSY - New York Stock Exchange, Inc. - US4278661081 - Common Stock - Currency: USD
HSY gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 91 industry peers in the Food Products industry. HSY scores excellent points on both the profitability and health parts. This is a solid base for a good stock. 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.
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
Looking at the Return On Assets, with a value of 11.80%, HSY belongs to the top of the industry, outperforming 95.60% of the companies in the same industry.
Looking at the Return On Equity, with a value of 35.18%, HSY belongs to the top of the industry, outperforming 96.70% of the companies in the same industry.
HSY has a Return On Invested Capital of 18.35%. This is amongst the best in 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 28.20%.
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 has a Profit Margin of 15.32%. This is amongst the best in the industry. HSY outperforms 95.60% of its industry peers.
In the last couple of years the Profit Margin of HSY has grown nicely.
HSY has a better Operating Margin (21.57%) than 97.80% of its industry peers.
In the last couple of years the Operating Margin of HSY has grown nicely.
Looking at the Gross Margin, with a value of 42.57%, HSY belongs to the top of the industry, outperforming 95.60% 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.
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.
Compared to 1 year ago, HSY has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.51 indicates that HSY is not in any danger for bankruptcy at the moment.
HSY has a Altman-Z score of 4.51. This is amongst the best in the industry. HSY outperforms 85.71% of its industry peers.
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.
HSY's Debt to FCF ratio of 3.25 is amongst the best of the industry. HSY outperforms 81.32% 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 has a worse Debt to Equity ratio (1.14) than 73.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.14 | ||
| Debt/FCF | 3.25 | ||
| Altman-Z | 4.51 |
ROIC/WACC2.23
WACC8.22%
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 in line with its industry peers.
HSY has a Quick Ratio of 1.11. This is a normal value and indicates that HSY is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of HSY (1.11) is better than 67.03% 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 by -7.03% in the last year.
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 0.33%.
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)0.33%
Revenue growth 3Y7.68%
Revenue growth 5Y7%
Sales Q2Q%26.04%
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 1.71% on average per year.
Based on estimates for the next years, HSY will show a small growth in Revenue. The Revenue will grow by 2.87% on average per year.
EPS Next Y-36.02%
EPS Next 2Y-16.77%
EPS Next 3Y-6.53%
EPS Next 5Y1.71%
Revenue Next Year2.62%
Revenue Next 2Y2.83%
Revenue Next 3Y2.71%
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.
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
A Price/Earnings ratio of 22.86 indicates a rather expensive valuation of HSY.
The rest of the industry has a similar Price/Earnings ratio as HSY.
HSY is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.24, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 29.34, HSY can be considered very expensive at the moment.
HSY's Price/Forward Earnings is on the same level as the industry average.
HSY is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 36.42, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.86 | ||
| Fwd PE | 29.34 |
4.2 Price Multiples
HSY's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, HSY is valued a bit cheaper than 69.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.18 | ||
| EV/EBITDA | 15.27 |
4.3 Compensation for Growth
The excellent profitability rating of HSY may justify a higher PE ratio.
A cheap valuation may be justified as HSY's earnings are expected to decrease with -6.53% in the coming years.
PEG (NY)N/A
PEG (5Y)2.26
EPS Next 2Y-16.77%
EPS Next 3Y-6.53%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.90%, HSY has a reasonable but not impressive dividend return.
HSY's Dividend Yield is a higher than the industry average which is at 4.74.
Compared to an average S&P500 Dividend Yield of 2.40, HSY pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.9% |
5.2 History
The dividend of HSY is nicely growing with an annual growth rate of 12.83%!
HSY has been paying a dividend for at least 10 years, so it has 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)12.83%
Div Incr Years15
Div Non Decr Years34
5.3 Sustainability
HSY pays out 65.72% of its income as dividend. 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-16.77%
EPS Next 3Y-6.53%
190.41
+1.4 (+0.74%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners121.15%
Inst Owner Change-0.65%
Ins Owners0.19%
Ins Owner Change5.99%
Market Cap38.58B
Analysts56.25
Price Target167.2 (-12.19%)
Short Float %7.01%
Short Ratio5.64
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.9% |
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)0.16%
PT rev (3m)-0.25%
EPS NQ rev (1m)1.29%
EPS NQ rev (3m)-21.14%
EPS NY rev (1m)-0.66%
EPS NY rev (3m)-3.2%
Revenue NQ rev (1m)0.16%
Revenue NQ rev (3m)0.47%
Revenue NY rev (1m)0.16%
Revenue NY rev (3m)0.36%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.86 | ||
| Fwd PE | 29.34 | ||
| P/S | 3.59 | ||
| P/FCF | 21.18 | ||
| P/OCF | 16.35 | ||
| P/B | 8.23 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.27 |
EPS(TTM)8.33
EY4.37%
EPS(NY)6.49
Fwd EY3.41%
FCF(TTM)8.99
FCFY4.72%
OCF(TTM)11.64
OCFY6.12%
SpS53.08
BVpS23.12
TBVpS-1.17
PEG (NY)N/A
PEG (5Y)2.26
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 | 4.51 |
F-Score4
WACC8.22%
ROIC/WACC2.23
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-36.02%
EPS Next 2Y-16.77%
EPS Next 3Y-6.53%
EPS Next 5Y1.71%
Revenue 1Y (TTM)0.33%
Revenue growth 3Y7.68%
Revenue growth 5Y7%
Sales Q2Q%26.04%
Revenue Next Year2.62%
Revenue Next 2Y2.83%
Revenue Next 3Y2.71%
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%