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. Both the profitability and the financial health of HRL get a neutral evaluation. Nothing too spectacular is happening here. HRL has a valuation in line with the averages, but it does not seem to be growing. Finally HRL also has an excellent dividend rating. With these ratings, HRL could be worth investigating further for dividend investing!.
1. Profitability
1.1 Basic Checks
In the past year HRL was profitable.
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
HRL has a better Return On Assets (5.65%) than 69.23% of its industry peers.
HRL has a better Return On Equity (9.43%) than 64.84% of its industry peers.
HRL has a better Return On Invested Capital (6.37%) than 65.93% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HRL is in line with the industry average of 8.87%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.65% | ||
| ROE | 9.43% | ||
| ROIC | 6.37% |
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 6.35% is fine compared to the rest of the industry. HRL outperforms 78.02% of its industry peers.
In the last couple of years the Profit Margin of HRL has declined.
Looking at the Operating Margin, with a value of 8.28%, HRL is in the better half of the industry, outperforming 70.33% of the companies in the same industry.
HRL's Operating Margin has declined in the last couple of years.
HRL has a Gross Margin (16.70%) which is in line with its industry peers.
In the last couple of years the Gross Margin of HRL has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.28% | ||
| PM (TTM) | 6.35% | ||
| GM | 16.7% |
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 below the Cost of Capital (WACC), so HRL is destroying value.
The number of shares outstanding for HRL has been increased compared to 1 year ago.
The number of shares outstanding for HRL has been increased compared to 5 years ago.
HRL has a better debt/assets ratio than last year.
2.2 Solvency
HRL has an Altman-Z score of 3.88. This indicates that HRL is financially healthy and has little risk of bankruptcy at the moment.
HRL has a Altman-Z score of 3.88. This is amongst the best in the industry. HRL outperforms 80.22% of its industry peers.
The Debt to FCF ratio of HRL is 3.21, which is a good value as it means it would take HRL, 3.21 years of fcf income to pay off all of its debts.
HRL's Debt to FCF ratio of 3.21 is fine compared to the rest of the industry. HRL outperforms 73.63% of its industry peers.
A Debt/Equity ratio of 0.36 indicates that HRL is not too dependend on debt financing.
HRL's Debt to Equity ratio of 0.36 is in line compared to the rest of the industry. HRL outperforms 59.34% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.36 | ||
| Debt/FCF | 3.21 | ||
| Altman-Z | 3.88 |
ROIC/WACC0.83
WACC7.66%
2.3 Liquidity
HRL has a Current Ratio of 2.45. This indicates that HRL is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 2.45, HRL is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
HRL has a Quick Ratio of 1.31. 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 1.31 is fine compared to the rest of the industry. HRL outperforms 72.53% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.45 | ||
| Quick Ratio | 1.31 |
3. Growth
3.1 Past
The earnings per share for HRL have decreased by -6.75% in the last year.
HRL shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -1.91% yearly.
The Revenue has decreased by -1.84% in the past year.
HRL shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.65% yearly.
EPS 1Y (TTM)-6.75%
EPS 3Y-2.98%
EPS 5Y-1.91%
EPS Q2Q%-14.63%
Revenue 1Y (TTM)-1.84%
Revenue growth 3Y1.54%
Revenue growth 5Y4.65%
Sales Q2Q%-0.27%
3.2 Future
HRL is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.07% yearly.
Based on estimates for the next years, HRL will show a small growth in Revenue. The Revenue will grow by 2.31% on average per year.
EPS Next Y5.13%
EPS Next 2Y8.12%
EPS Next 3Y8.41%
EPS Next 5Y6.07%
Revenue Next Year1.43%
Revenue Next 2Y1.84%
Revenue Next 3Y2.29%
Revenue Next 5Y2.31%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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
The Price/Earnings ratio is 19.01, which indicates a rather expensive current valuation of HRL.
The rest of the industry has a similar Price/Earnings ratio as HRL.
Compared to an average S&P500 Price/Earnings ratio of 29.41, HRL is valued a bit cheaper.
The Price/Forward Earnings ratio is 15.65, which indicates a correct valuation of HRL.
Based on the Price/Forward Earnings ratio, HRL is valued a bit cheaper than 73.63% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.12, HRL is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.01 | ||
| Fwd PE | 15.65 |
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 64.84% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.82 | ||
| EV/EBITDA | 14.31 |
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)3.7
PEG (5Y)N/A
EPS Next 2Y8.12%
EPS Next 3Y8.41%
5. Dividend
5.1 Amount
HRL has a Yearly Dividend Yield of 4.01%, which is a nice return.
HRL's Dividend Yield is rather good when compared to the industry average which is at 3.92. HRL pays more dividend than 86.81% of the companies in the same industry.
HRL's Dividend Yield is rather good when compared to the S&P500 average which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.01% |
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 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
81.88% 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.
DP81.88%
EPS Next 2Y8.12%
EPS Next 3Y8.41%
NYSE:HRL (3/5/2025, 2:10:02 PM)
28.9
0 (0%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners89.5%
Inst Owner Change5.45%
Ins Owners0.2%
Ins Owner Change0.08%
Market Cap15.87B
Analysts53.68
Price Target32.43 (12.21%)
Short Float %4.09%
Short Ratio4.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.01% |
Yearly Dividend1.12
Dividend Growth(5Y)6.53%
DP81.88%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-4.72%
Min EPS beat(2)-7.7%
Max EPS beat(2)-1.75%
EPS beat(4)2
Avg EPS beat(4)-0.67%
Min EPS beat(4)-7.7%
Max EPS beat(4)4.91%
EPS beat(8)4
Avg EPS beat(8)1.08%
EPS beat(12)6
Avg EPS beat(12)-0.36%
EPS beat(16)8
Avg EPS beat(16)-0.2%
Revenue beat(2)1
Avg Revenue beat(2)-0.18%
Min Revenue beat(2)-1.16%
Max Revenue beat(2)0.8%
Revenue beat(4)1
Avg Revenue beat(4)-1.7%
Min Revenue beat(4)-3.66%
Max Revenue beat(4)0.8%
Revenue beat(8)2
Avg Revenue beat(8)-1.86%
Revenue beat(12)3
Avg Revenue beat(12)-1.84%
Revenue beat(16)7
Avg Revenue beat(16)-0.13%
PT rev (1m)-0.69%
PT rev (3m)-0.07%
EPS NQ rev (1m)-2.41%
EPS NQ rev (3m)-4.99%
EPS NY rev (1m)-0.7%
EPS NY rev (3m)-2.58%
Revenue NQ rev (1m)-0.27%
Revenue NQ rev (3m)-2.2%
Revenue NY rev (1m)-0.08%
Revenue NY rev (3m)-1.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.01 | ||
| Fwd PE | 15.65 | ||
| P/S | 1.33 | ||
| P/FCF | 17.82 | ||
| P/OCF | 13.54 | ||
| P/B | 1.98 | ||
| P/tB | 11.47 | ||
| EV/EBITDA | 14.31 |
EPS(TTM)1.52
EY5.26%
EPS(NY)1.85
Fwd EY6.39%
FCF(TTM)1.62
FCFY5.61%
OCF(TTM)2.13
OCFY7.39%
SpS21.7
BVpS14.62
TBVpS2.52
PEG (NY)3.7
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.65% | ||
| ROE | 9.43% | ||
| ROCE | 8.17% | ||
| ROIC | 6.37% | ||
| ROICexc | 6.86% | ||
| ROICexgc | 16.86% | ||
| OM | 8.28% | ||
| PM (TTM) | 6.35% | ||
| GM | 16.7% | ||
| FCFM | 7.48% |
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-Score5
Asset Turnover0.89
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.36 | ||
| Debt/FCF | 3.21 | ||
| Debt/EBITDA | 2.29 | ||
| Cap/Depr | 108.41% | ||
| Cap/Sales | 2.36% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 94.06% | ||
| Profit Quality | 117.68% | ||
| Current Ratio | 2.45 | ||
| Quick Ratio | 1.31 | ||
| Altman-Z | 3.88 |
F-Score5
WACC7.66%
ROIC/WACC0.83
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)-6.75%
EPS 3Y-2.98%
EPS 5Y-1.91%
EPS Q2Q%-14.63%
EPS Next Y5.13%
EPS Next 2Y8.12%
EPS Next 3Y8.41%
EPS Next 5Y6.07%
Revenue 1Y (TTM)-1.84%
Revenue growth 3Y1.54%
Revenue growth 5Y4.65%
Sales Q2Q%-0.27%
Revenue Next Year1.43%
Revenue Next 2Y1.84%
Revenue Next 3Y2.29%
Revenue Next 5Y2.31%
EBIT growth 1Y-6.24%
EBIT growth 3Y-1.84%
EBIT growth 5Y-2.55%
EBIT Next Year29.59%
EBIT Next 3Y13.81%
EBIT Next 5YN/A
FCF growth 1Y29.35%
FCF growth 3Y9.5%
FCF growth 5Y9.93%
OCF growth 1Y22.74%
OCF growth 3Y8.13%
OCF growth 5Y6.54%