HORMEL FOODS CORP (HRL) Stock Fundamental Analysis
USA - NYSE:HRL - US4404521001 - Common Stock
24.96 USD
+0.07 (+0.28%)
25 USD
+0.04 (+0.16%)
We assign a fundamental rating of 5 out of 10 to HRL. HRL was compared to 89 industry peers in the Food Products industry. HRL has only an average score on both its financial health and profitability. HRL has a valuation in line with the averages, but on the other hand it scores bad on growth. HRL also has an excellent dividend rating. This makes HRL very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
In the past year HRL was profitable.
HRL had a positive operating cash flow in the past year.
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 Return On Assets of 5.59%. This is in the better half of the industry: HRL outperforms 76.40% of its industry peers.
HRL has a better Return On Equity (9.33%) than 67.42% of its industry peers.
HRL has a better Return On Invested Capital (6.50%) than 67.42% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for HRL is significantly below the industry average of 28.31%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.59% | ||
| ROE | 9.33% | ||
| ROIC | 6.5% |
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's Profit Margin of 6.26% is fine compared to the rest of the industry. HRL outperforms 76.40% of its industry peers.
In the last couple of years the Profit Margin of HRL has declined.
HRL has a better Operating Margin (8.40%) than 70.79% of its industry peers.
In the last couple of years the Operating Margin of HRL has declined.
HRL has a Gross Margin of 16.36%. This is comparable to the rest of the industry: HRL outperforms 44.94% of its industry peers.
HRL's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.4% | ||
| PM (TTM) | 6.26% | ||
| GM | 16.36% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so HRL is still creating some value.
HRL has more shares outstanding than it did 1 year ago.
HRL has more shares outstanding than it did 5 years ago.
HRL has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.64 indicates that HRL is not in any danger for bankruptcy at the moment.
HRL has a Altman-Z score of 3.64. This is in the better half of the industry: HRL outperforms 75.28% of its industry peers.
HRL has a debt to FCF ratio of 4.55. This is a neutral value as HRL would need 4.55 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.55, HRL is in the better half of the industry, outperforming 77.53% of the companies in the same industry.
A Debt/Equity ratio of 0.35 indicates that HRL is not too dependend on debt financing.
HRL has a Debt to Equity ratio (0.35) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 4.55 | ||
| Altman-Z | 3.64 |
ROIC/WACC0.88
WACC7.43%
2.3 Liquidity
A Current Ratio of 2.47 indicates that HRL has no problem at all paying its short term obligations.
HRL has a Current ratio of 2.47. This is in the better half of the industry: HRL outperforms 74.16% of its industry peers.
A Quick Ratio of 1.12 indicates that HRL should not have too much problems paying its short term obligations.
HRL has a better Quick ratio (1.12) than 65.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.47 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
HRL shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -6.96%.
HRL shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -1.91% yearly.
HRL shows a small growth in Revenue. In the last year, the Revenue has grown by 0.65%.
Measured over the past years, HRL shows a small growth in Revenue. The Revenue has been growing by 4.65% on average per year.
EPS 1Y (TTM)-6.96%
EPS 3Y-2.98%
EPS 5Y-1.91%
EPS Q2Q%-5.41%
Revenue 1Y (TTM)0.65%
Revenue growth 3Y1.54%
Revenue growth 5Y4.65%
Sales Q2Q%4.64%
3.2 Future
Based on estimates for the next years, HRL will show a small growth in Earnings Per Share. The EPS will grow by 5.76% on average per year.
HRL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.22% yearly.
EPS Next Y2.92%
EPS Next 2Y6.89%
EPS Next 3Y8.8%
EPS Next 5Y5.76%
Revenue Next Year1.74%
Revenue Next 2Y2.16%
Revenue Next 3Y2.32%
Revenue Next 5Y2.22%
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 16.98, the valuation of HRL can be described as correct.
Compared to the rest of the industry, the Price/Earnings ratio of HRL indicates a somewhat cheap valuation: HRL is cheaper than 61.80% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of HRL to the average of the S&P500 Index (27.41), we can say HRL is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 13.83, the valuation of HRL can be described as correct.
HRL's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. HRL is cheaper than 69.66% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.88, HRL is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.98 | ||
| Fwd PE | 13.83 |
4.2 Price Multiples
HRL's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of HRL indicates a somewhat cheap valuation: HRL is cheaper than 70.79% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.87 | ||
| EV/EBITDA | 12.47 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates HRL does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)5.82
PEG (5Y)N/A
EPS Next 2Y6.89%
EPS Next 3Y8.8%
5. Dividend
5.1 Amount
HRL has a Yearly Dividend Yield of 4.56%, which is a nice return.
HRL's Dividend Yield is rather good when compared to the industry average which is at 5.03. HRL pays more dividend than 82.02% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, HRL pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.56% |
5.2 History
On average, the dividend of HRL grows each year by 6.53%, which is quite nice.
HRL has paid a dividend for at least 10 years, which is a reliable track record.
HRL has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)6.53%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
83.32% of the earnings are spent on dividend by HRL. This is not a sustainable payout ratio.
The dividend of HRL is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP83.32%
EPS Next 2Y6.89%
EPS Next 3Y8.8%
24.96
+0.07 (+0.28%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners89.99%
Inst Owner Change0.52%
Ins Owners0.16%
Ins Owner Change0.03%
Market Cap13.73B
Analysts67.5
Price Target29.89 (19.75%)
Short Float %4.32%
Short Ratio3.23
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.56% |
Yearly Dividend1.12
Dividend Growth(5Y)6.53%
DP83.32%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-7.16%
Min EPS beat(2)-15.34%
Max EPS beat(2)1.03%
EPS beat(4)1
Avg EPS beat(4)-5.94%
Min EPS beat(4)-15.34%
Max EPS beat(4)1.03%
EPS beat(8)4
Avg EPS beat(8)-0.26%
EPS beat(12)6
Avg EPS beat(12)-1.4%
EPS beat(16)8
Avg EPS beat(16)-1.1%
Revenue beat(2)1
Avg Revenue beat(2)-0.25%
Min Revenue beat(2)-1.27%
Max Revenue beat(2)0.76%
Revenue beat(4)2
Avg Revenue beat(4)-0.22%
Min Revenue beat(4)-1.27%
Max Revenue beat(4)0.8%
Revenue beat(8)3
Avg Revenue beat(8)-1.03%
Revenue beat(12)3
Avg Revenue beat(12)-1.95%
Revenue beat(16)6
Avg Revenue beat(16)-0.84%
PT rev (1m)-10.93%
PT rev (3m)-10.6%
EPS NQ rev (1m)-20.27%
EPS NQ rev (3m)-19.62%
EPS NY rev (1m)-0.18%
EPS NY rev (3m)-0.2%
Revenue NQ rev (1m)-0.46%
Revenue NQ rev (3m)0.06%
Revenue NY rev (1m)0.28%
Revenue NY rev (3m)0.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.98 | ||
| Fwd PE | 13.83 | ||
| P/S | 1.14 | ||
| P/FCF | 21.87 | ||
| P/OCF | 14.75 | ||
| P/B | 1.7 | ||
| P/tB | 9.54 | ||
| EV/EBITDA | 12.47 |
EPS(TTM)1.47
EY5.89%
EPS(NY)1.81
Fwd EY7.23%
FCF(TTM)1.14
FCFY4.57%
OCF(TTM)1.69
OCFY6.78%
SpS21.92
BVpS14.7
TBVpS2.62
PEG (NY)5.82
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.59% | ||
| ROE | 9.33% | ||
| ROCE | 8.34% | ||
| ROIC | 6.5% | ||
| ROICexc | 6.86% | ||
| ROICexgc | 16.2% | ||
| OM | 8.4% | ||
| PM (TTM) | 6.26% | ||
| GM | 16.36% | ||
| FCFM | 5.21% |
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-Score5
Asset Turnover0.89
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 4.55 | ||
| Debt/EBITDA | 2.24 | ||
| Cap/Depr | 116.21% | ||
| Cap/Sales | 2.51% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 73.07% | ||
| Profit Quality | 83.2% | ||
| Current Ratio | 2.47 | ||
| Quick Ratio | 1.12 | ||
| Altman-Z | 3.64 |
F-Score5
WACC7.43%
ROIC/WACC0.88
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)-6.96%
EPS 3Y-2.98%
EPS 5Y-1.91%
EPS Q2Q%-5.41%
EPS Next Y2.92%
EPS Next 2Y6.89%
EPS Next 3Y8.8%
EPS Next 5Y5.76%
Revenue 1Y (TTM)0.65%
Revenue growth 3Y1.54%
Revenue growth 5Y4.65%
Sales Q2Q%4.64%
Revenue Next Year1.74%
Revenue Next 2Y2.16%
Revenue Next 3Y2.32%
Revenue Next 5Y2.22%
EBIT growth 1Y-1.83%
EBIT growth 3Y-1.84%
EBIT growth 5Y-2.55%
EBIT Next Year26.2%
EBIT Next 3Y13.93%
EBIT Next 5Y9.03%
FCF growth 1Y-25.48%
FCF growth 3Y9.5%
FCF growth 5Y9.93%
OCF growth 1Y-15.41%
OCF growth 3Y8.13%
OCF growth 5Y6.54%