HORMEL FOODS CORP (HRL) Stock Fundamental Analysis
NYSE:HRL - New York Stock Exchange, Inc. - US4404521001 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to HRL. HRL was compared to 91 industry peers in the Food Products industry. HRL has only an average score on both its financial health and profitability. HRL is valued correctly, but it does not seem to be growing. Finally HRL also has an excellent dividend rating. These ratings would make HRL suitable for dividend investing!
1. Profitability
1.1 Basic Checks
HRL had positive earnings in the past year.
In the past year HRL had a positive cash flow from operations.
In the past 5 years HRL has always been profitable.
Each year in the past 5 years HRL had a positive operating cash flow.
1.2 Ratios
HRL has a better Return On Assets (5.99%) than 69.77% of its industry peers.
HRL has a Return On Equity of 10.07%. This is in the better half of the industry: HRL outperforms 63.95% of its industry peers.
HRL has a better Return On Invested Capital (6.59%) than 65.12% of its industry peers.
HRL had an Average Return On Invested Capital over the past 3 years of 7.49%. This is in line with the industry average of 9.03%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.99% | ||
| ROE | 10.07% | ||
| ROIC | 6.59% |
ROA(3y)6.47%
ROA(5y)7.15%
ROE(3y)11.2%
ROE(5y)12.15%
ROIC(3y)7.49%
ROIC(5y)7.95%
1.3 Margins
HRL has a Profit Margin of 6.75%. This is in the better half of the industry: HRL outperforms 77.91% of its industry peers.
In the last couple of years the Profit Margin of HRL has declined.
The Operating Margin of HRL (8.53%) is better than 69.77% of its industry peers.
In the last couple of years the Operating Margin of HRL has declined.
HRL has a worse Gross Margin (16.96%) than 60.47% of its industry peers.
HRL's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.53% | ||
| PM (TTM) | 6.75% | ||
| GM | 16.96% |
OM growth 3Y-3.33%
OM growth 5Y-6.88%
PM growth 3Y-5.43%
PM growth 5Y-8.11%
GM growth 3Y0.06%
GM growth 5Y-3.09%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), HRL is destroying value.
HRL has more shares outstanding than it did 1 year ago.
The number of shares outstanding for HRL has been increased compared to 5 years ago.
Compared to 1 year ago, HRL has an improved debt to assets ratio.
2.2 Solvency
HRL has an Altman-Z score of 3.94. This indicates that HRL is financially healthy and has little risk of bankruptcy at the moment.
HRL has a Altman-Z score of 3.94. This is in the better half of the industry: HRL outperforms 79.07% of its industry peers.
HRL has a debt to FCF ratio of 2.83. This is a good value and a sign of high solvency as HRL would need 2.83 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.83, HRL is doing good in the industry, outperforming 70.93% of the companies in the same industry.
A Debt/Equity ratio of 0.36 indicates that HRL is not too dependend on debt financing.
HRL has a Debt to Equity ratio (0.36) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.36 | ||
| Debt/FCF | 2.83 | ||
| Altman-Z | 3.94 |
ROIC/WACC0.82
WACC8.03%
2.3 Liquidity
A Current Ratio of 2.32 indicates that HRL has no problem at all paying its short term obligations.
HRL has a better Current ratio (2.32) than 68.60% of its industry peers.
HRL has a Quick Ratio of 1.19. This is a normal value and indicates that HRL is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of HRL (1.19) is better than 67.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.32 | ||
| Quick Ratio | 1.19 |
3. Growth
3.1 Past
The earnings per share for HRL have decreased by -2.47% in the last year.
Measured over the past years, HRL shows a decrease in Earnings Per Share. The EPS has been decreasing by -1.91% on average per year.
HRL shows a decrease in Revenue. In the last year, the revenue decreased by -1.56%.
The Revenue has been growing slightly by 4.65% on average over the past years.
EPS 1Y (TTM)-2.47%
EPS 3Y-2.98%
EPS 5Y-1.91%
EPS Q2Q%0%
Revenue 1Y (TTM)-1.56%
Revenue growth 3Y1.54%
Revenue growth 5Y4.65%
Sales Q2Q%-1.88%
3.2 Future
The Earnings Per Share is expected to grow by 6.07% on average over the next years.
HRL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.31% yearly.
EPS Next Y5.81%
EPS Next 2Y8.52%
EPS Next 3Y7.8%
EPS Next 5Y6.07%
Revenue Next Year1.1%
Revenue Next 2Y1.62%
Revenue Next 3Y1.76%
Revenue Next 5Y2.31%
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 accelerating.
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
Based on the Price/Earnings ratio of 19.16, the valuation of HRL can be described as rather expensive.
The rest of the industry has a similar Price/Earnings ratio as HRL.
HRL is valuated rather cheaply when we compare the Price/Earnings ratio to 28.51, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 18.10, the valuation of HRL can be described as rather expensive.
HRL's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. HRL is cheaper than 66.28% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 93.88. HRL is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.16 | ||
| Fwd PE | 18.1 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HRL is on the same level as its industry peers.
HRL's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. HRL is cheaper than 61.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.45 | ||
| EV/EBITDA | 14.73 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PEG (NY)3.3
PEG (5Y)N/A
EPS Next 2Y8.52%
EPS Next 3Y7.8%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.76%, HRL has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.86, HRL pays a better dividend. On top of this HRL pays more dividend than 81.40% of the companies listed in the same industry.
HRL's Dividend Yield is rather good when compared to the S&P500 average which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.76% |
5.2 History
On average, the dividend of HRL grows each year by 6.53%, which is quite nice.
HRL has been paying a dividend for at least 10 years, so it has a reliable track record.
HRL has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.53%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
HRL pays out 76.39% of its income as dividend. This is not a sustainable payout ratio.
HRL's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP76.39%
EPS Next 2Y8.52%
EPS Next 3Y7.8%
HORMEL FOODS CORP
NYSE:HRL (1/31/2025, 11:44:50 AM)
30.265
-0.16 (-0.54%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners88.41%
Inst Owner Change-0.3%
Ins Owners0.19%
Ins Owner Change0.04%
Market Cap16.62B
Analysts53.68
Price Target32.79 (8.34%)
Short Float %4.05%
Short Ratio4.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.76% |
Yearly Dividend1.12
Dividend Growth(5Y)6.53%
DP76.39%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.05%
Min EPS beat(2)-1.75%
Max EPS beat(2)1.84%
EPS beat(4)3
Avg EPS beat(4)6.58%
Min EPS beat(4)-1.75%
Max EPS beat(4)21.34%
EPS beat(8)4
Avg EPS beat(8)0.49%
EPS beat(12)6
Avg EPS beat(12)0.26%
EPS beat(16)9
Avg EPS beat(16)0.28%
Revenue beat(2)0
Avg Revenue beat(2)-1.95%
Min Revenue beat(2)-2.77%
Max Revenue beat(2)-1.13%
Revenue beat(4)1
Avg Revenue beat(4)-1.41%
Min Revenue beat(4)-3.66%
Max Revenue beat(4)1.94%
Revenue beat(8)1
Avg Revenue beat(8)-2.49%
Revenue beat(12)3
Avg Revenue beat(12)-1.66%
Revenue beat(16)7
Avg Revenue beat(16)-0.01%
PT rev (1m)0.3%
PT rev (3m)-1.93%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.82%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.56%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.59%
Revenue NY rev (1m)0.07%
Revenue NY rev (3m)-1.2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.16 | ||
| Fwd PE | 18.1 | ||
| P/S | 1.39 | ||
| P/FCF | 16.45 | ||
| P/OCF | 13.12 | ||
| P/B | 2.08 | ||
| P/tB | 12.43 | ||
| EV/EBITDA | 14.73 |
EPS(TTM)1.58
EY5.22%
EPS(NY)1.67
Fwd EY5.52%
FCF(TTM)1.84
FCFY6.08%
OCF(TTM)2.31
OCFY7.62%
SpS21.71
BVpS14.56
TBVpS2.44
PEG (NY)3.3
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.99% | ||
| ROE | 10.07% | ||
| ROCE | 8.45% | ||
| ROIC | 6.59% | ||
| ROICexc | 7.04% | ||
| ROICexgc | 17.19% | ||
| OM | 8.53% | ||
| PM (TTM) | 6.75% | ||
| GM | 16.96% | ||
| FCFM | 8.48% |
ROA(3y)6.47%
ROA(5y)7.15%
ROE(3y)11.2%
ROE(5y)12.15%
ROIC(3y)7.49%
ROIC(5y)7.95%
ROICexc(3y)8.08%
ROICexc(5y)8.91%
ROICexgc(3y)21.3%
ROICexgc(5y)22.65%
ROCE(3y)9.6%
ROCE(5y)10.2%
ROICexcg growth 3Y-7.22%
ROICexcg growth 5Y-11.81%
ROICexc growth 3Y-3.68%
ROICexc growth 5Y-13.2%
OM growth 3Y-3.33%
OM growth 5Y-6.88%
PM growth 3Y-5.43%
PM growth 5Y-8.11%
GM growth 3Y0.06%
GM growth 5Y-3.09%
F-Score6
Asset Turnover0.89
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.36 | ||
| Debt/FCF | 2.83 | ||
| Debt/EBITDA | 2.24 | ||
| Cap/Depr | 99.49% | ||
| Cap/Sales | 2.15% | ||
| Interest Coverage | 14.46 | ||
| Cash Conversion | 99.38% | ||
| Profit Quality | 125.5% | ||
| Current Ratio | 2.32 | ||
| Quick Ratio | 1.19 | ||
| Altman-Z | 3.94 |
F-Score6
WACC8.03%
ROIC/WACC0.82
Cap/Depr(3y)104.11%
Cap/Depr(5y)118.53%
Cap/Sales(3y)2.21%
Cap/Sales(5y)2.5%
Profit Quality(3y)103.03%
Profit Quality(5y)95.5%
High Growth Momentum
Growth
EPS 1Y (TTM)-2.47%
EPS 3Y-2.98%
EPS 5Y-1.91%
EPS Q2Q%0%
EPS Next Y5.81%
EPS Next 2Y8.52%
EPS Next 3Y7.8%
EPS Next 5Y6.07%
Revenue 1Y (TTM)-1.56%
Revenue growth 3Y1.54%
Revenue growth 5Y4.65%
Sales Q2Q%-1.88%
Revenue Next Year1.1%
Revenue Next 2Y1.62%
Revenue Next 3Y1.76%
Revenue Next 5Y2.31%
EBIT growth 1Y-3.86%
EBIT growth 3Y-1.84%
EBIT growth 5Y-2.55%
EBIT Next Year29.5%
EBIT Next 3Y13.81%
EBIT Next 5YN/A
FCF growth 1Y29.92%
FCF growth 3Y9.5%
FCF growth 5Y9.93%
OCF growth 1Y20.89%
OCF growth 3Y8.13%
OCF growth 5Y6.54%