HORMEL FOODS CORP (HRL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HRL - US4404521001 - Common Stock
23.39 USD
-0.31 (-1.31%)
23.46 USD
+0.07 (+0.3%)
Overall HRL gets a fundamental rating of 5 out of 10. We evaluated HRL against 87 industry peers in the Food Products industry. HRL has an average financial health and profitability rating. HRL has a valuation in line with the averages, but on the other hand it scores bad on growth. Finally HRL also has an excellent dividend rating. These ratings could make HRL a good candidate 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.
Each year in the past 5 years HRL has been profitable.
Each year in the past 5 years HRL had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.57%, HRL is in the better half of the industry, outperforming 64.37% of the companies in the same industry.
With a decent Return On Equity value of 6.05%, HRL is doing good in the industry, outperforming 60.92% of the companies in the same industry.
With a decent Return On Invested Capital value of 5.99%, HRL is doing good in the industry, outperforming 66.67% of the companies in the same industry.
HRL had an Average Return On Invested Capital over the past 3 years of 6.47%. This is significantly below the industry average of 28.50%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.57% | ||
| ROE | 6.05% | ||
| ROIC | 5.99% |
ROA(3y)5.15%
ROA(5y)6.03%
ROE(3y)8.79%
ROE(5y)10.54%
ROIC(3y)6.47%
ROIC(5y)6.94%
1.3 Margins
HRL has a better Profit Margin (3.95%) than 68.97% of its industry peers.
HRL's Profit Margin has declined in the last couple of years.
The Operating Margin of HRL (7.94%) is better than 72.41% of its industry peers.
HRL's Operating Margin has declined in the last couple of years.
HRL's Gross Margin of 15.70% is in line compared to the rest of the industry. HRL outperforms 44.83% of its industry peers.
In the last couple of years the Gross Margin of HRL has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.94% | ||
| PM (TTM) | 3.95% | ||
| GM | 15.7% |
OM growth 3Y-8.39%
OM growth 5Y-6.45%
PM growth 3Y-21.05%
PM growth 5Y-16.01%
GM growth 3Y-3.32%
GM growth 5Y-3.74%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so HRL is destroying value.
Compared to 1 year ago, HRL has more shares outstanding
The number of shares outstanding for HRL has been increased compared to 5 years ago.
The debt/assets ratio for HRL is higher compared to a year ago.
2.2 Solvency
HRL has an Altman-Z score of 3.53. This indicates that HRL is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of HRL (3.53) is better than 77.01% of its industry peers.
HRL has a debt to FCF ratio of 5.35. This is a neutral value as HRL would need 5.35 years to pay back of all of its debts.
HRL's Debt to FCF ratio of 5.35 is fine compared to the rest of the industry. HRL outperforms 79.31% of its industry peers.
HRL has a Debt/Equity ratio of 0.36. This is a healthy value indicating a solid balance between debt and equity.
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 | 5.35 | ||
| Altman-Z | 3.53 |
ROIC/WACC0.79
WACC7.57%
2.3 Liquidity
A Current Ratio of 2.47 indicates that HRL has no problem at all paying its short term obligations.
HRL's Current ratio of 2.47 is fine compared to the rest of the industry. HRL outperforms 72.41% of its industry peers.
HRL has a Quick Ratio of 1.20. This is a normal value and indicates that HRL is financially healthy and should not expect problems in meeting its short term obligations.
HRL's Quick ratio of 1.20 is fine compared to the rest of the industry. HRL outperforms 68.97% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.47 | ||
| Quick Ratio | 1.2 |
3. Growth
3.1 Past
The earnings per share for HRL have decreased strongly by -13.29% in the last year.
Measured over the past years, HRL shows a decrease in Earnings Per Share. The EPS has been decreasing by -3.88% on average per year.
Looking at the last year, HRL shows a small growth in Revenue. The Revenue has grown by 1.55% in the last year.
The Revenue has been growing slightly by 4.73% on average over the past years.
EPS 1Y (TTM)-13.29%
EPS 3Y-9.2%
EPS 5Y-3.88%
EPS Q2Q%-23.81%
Revenue 1Y (TTM)1.55%
Revenue growth 3Y-0.95%
Revenue growth 5Y4.73%
Sales Q2Q%1.52%
3.2 Future
The Earnings Per Share is expected to grow by 17.05% on average over the next years. This is quite good.
Based on estimates for the next years, HRL will show a small growth in Revenue. The Revenue will grow by 3.65% on average per year.
EPS Next Y8.13%
EPS Next 2Y7.79%
EPS Next 3Y7.32%
EPS Next 5Y17.05%
Revenue Next Year2.05%
Revenue Next 2Y2.15%
Revenue Next 3Y2.08%
Revenue Next 5Y3.65%
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.
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. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 17.07, which indicates a rather expensive current valuation of HRL.
60.92% of the companies in the same industry are more expensive than HRL, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 26.60. HRL is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 15.79, the valuation of HRL can be described as correct.
Based on the Price/Forward Earnings ratio, HRL is valued a bit cheaper than 66.67% of the companies in the same industry.
HRL's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 23.23.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.07 | ||
| Fwd PE | 15.79 |
4.2 Price Multiples
HRL's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, HRL is valued a bit cheaper than 62.07% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.08 | ||
| EV/EBITDA | 12.38 |
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)2.1
PEG (5Y)N/A
EPS Next 2Y7.79%
EPS Next 3Y7.32%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.80%, HRL is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.42, HRL pays a better dividend. On top of this HRL pays more dividend than 82.76% 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 2.00.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.8% |
5.2 History
The dividend of HRL has a limited annual growth rate of 4.90%.
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)4.9%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
132.41% of the earnings are spent on dividend by HRL. This is not a sustainable payout ratio.
The dividend of HRL is growing, but earnings are growing more, so the dividend growth is sustainable.
DP132.41%
EPS Next 2Y7.79%
EPS Next 3Y7.32%
23.39
-0.31 (-1.31%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners91.41%
Inst Owner Change2.09%
Ins Owners0.16%
Ins Owner Change0.06%
Market Cap12.86B
Revenue(TTM)12.11B
Net Income(TTM)478.20M
Analysts68
Price Target28.72 (22.79%)
Short Float %6.72%
Short Ratio3.78
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.8% |
Yearly Dividend1.15
Dividend Growth(5Y)4.9%
DP132.41%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-5.19%
Min EPS beat(2)-15.34%
Max EPS beat(2)4.95%
EPS beat(4)2
Avg EPS beat(4)-4.26%
Min EPS beat(4)-15.34%
Max EPS beat(4)4.95%
EPS beat(8)5
Avg EPS beat(8)1.16%
EPS beat(12)6
Avg EPS beat(12)-1.1%
EPS beat(16)8
Avg EPS beat(16)-0.87%
Revenue beat(2)1
Avg Revenue beat(2)-0.76%
Min Revenue beat(2)-2.28%
Max Revenue beat(2)0.76%
Revenue beat(4)2
Avg Revenue beat(4)-0.5%
Min Revenue beat(4)-2.28%
Max Revenue beat(4)0.8%
Revenue beat(8)3
Avg Revenue beat(8)-0.95%
Revenue beat(12)3
Avg Revenue beat(12)-1.83%
Revenue beat(16)5
Avg Revenue beat(16)-1.37%
PT rev (1m)1.28%
PT rev (3m)-3.91%
EPS NQ rev (1m)-0.25%
EPS NQ rev (3m)-8.44%
EPS NY rev (1m)-1.22%
EPS NY rev (3m)-5.15%
Revenue NQ rev (1m)-0.32%
Revenue NQ rev (3m)-0.54%
Revenue NY rev (1m)-0.3%
Revenue NY rev (3m)-0.55%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.07 | ||
| Fwd PE | 15.79 | ||
| P/S | 1.06 | ||
| P/FCF | 24.08 | ||
| P/OCF | 15.22 | ||
| P/B | 1.63 | ||
| P/tB | 9.67 | ||
| EV/EBITDA | 12.38 |
EPS(TTM)1.37
EY5.86%
EPS(NY)1.48
Fwd EY6.33%
FCF(TTM)0.97
FCFY4.15%
OCF(TTM)1.54
OCFY6.57%
SpS22.01
BVpS14.37
TBVpS2.42
PEG (NY)2.1
PEG (5Y)N/A
Graham Number21.04
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.57% | ||
| ROE | 6.05% | ||
| ROCE | 8% | ||
| ROIC | 5.99% | ||
| ROICexc | 6.36% | ||
| ROICexgc | 15.18% | ||
| OM | 7.94% | ||
| PM (TTM) | 3.95% | ||
| GM | 15.7% | ||
| FCFM | 4.41% |
ROA(3y)5.15%
ROA(5y)6.03%
ROE(3y)8.79%
ROE(5y)10.54%
ROIC(3y)6.47%
ROIC(5y)6.94%
ROICexc(3y)6.91%
ROICexc(5y)7.44%
ROICexgc(3y)17.7%
ROICexgc(5y)19.44%
ROCE(3y)8.65%
ROCE(5y)9.27%
ROICexgc growth 3Y-13.48%
ROICexgc growth 5Y-10.67%
ROICexc growth 3Y-10.55%
ROICexc growth 5Y-11.83%
OM growth 3Y-8.39%
OM growth 5Y-6.45%
PM growth 3Y-21.05%
PM growth 5Y-16.01%
GM growth 3Y-3.32%
GM growth 5Y-3.74%
F-Score5
Asset Turnover0.9
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.36 | ||
| Debt/FCF | 5.35 | ||
| Debt/EBITDA | 2.33 | ||
| Cap/Depr | 117.81% | ||
| Cap/Sales | 2.57% | ||
| Interest Coverage | 12.88 | ||
| Cash Conversion | 69.03% | ||
| Profit Quality | 111.74% | ||
| Current Ratio | 2.47 | ||
| Quick Ratio | 1.2 | ||
| Altman-Z | 3.53 |
F-Score5
WACC7.57%
ROIC/WACC0.79
Cap/Depr(3y)107.99%
Cap/Depr(5y)106.38%
Cap/Sales(3y)2.32%
Cap/Sales(5y)2.25%
Profit Quality(3y)111.74%
Profit Quality(5y)101.1%
High Growth Momentum
Growth
EPS 1Y (TTM)-13.29%
EPS 3Y-9.2%
EPS 5Y-3.88%
EPS Q2Q%-23.81%
EPS Next Y8.13%
EPS Next 2Y7.79%
EPS Next 3Y7.32%
EPS Next 5Y17.05%
Revenue 1Y (TTM)1.55%
Revenue growth 3Y-0.95%
Revenue growth 5Y4.73%
Sales Q2Q%1.52%
Revenue Next Year2.05%
Revenue Next 2Y2.15%
Revenue Next 3Y2.08%
Revenue Next 5Y3.65%
EBIT growth 1Y-5.53%
EBIT growth 3Y-9.26%
EBIT growth 5Y-2.02%
EBIT Next Year36.18%
EBIT Next 3Y11.82%
EBIT Next 5Y14.86%
FCF growth 1Y-47.11%
FCF growth 3Y-14.54%
FCF growth 5Y-6.82%
OCF growth 1Y-33.27%
OCF growth 3Y-9.36%
OCF growth 5Y-5.61%
HORMEL FOODS CORP / HRL FAQ
What is the fundamental rating for HRL stock?
ChartMill assigns a fundamental rating of 5 / 10 to HRL.
What is the valuation status for HRL stock?
ChartMill assigns a valuation rating of 4 / 10 to HORMEL FOODS CORP (HRL). This can be considered as Fairly Valued.
What is the profitability of HRL stock?
HORMEL FOODS CORP (HRL) has a profitability rating of 5 / 10.
What is the earnings growth outlook for HORMEL FOODS CORP?
The Earnings per Share (EPS) of HORMEL FOODS CORP (HRL) is expected to grow by 8.13% in the next year.
Can you provide the dividend sustainability for HRL stock?
The dividend rating of HORMEL FOODS CORP (HRL) is 8 / 10 and the dividend payout ratio is 132.41%.