HORMEL FOODS CORP (HRL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HRL - US4404521001 - Common Stock
24.44 USD
-0.16 (-0.65%)
24.74 USD
+0.3 (+1.23%)
Taking everything into account, HRL scores 4 out of 10 in our fundamental rating. HRL was compared to 87 industry peers in the Food Products industry. HRL has an average financial health and profitability rating. HRL has a expensive valuation and it also scores bad on growth. 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.
- Each year in the past 5 years HRL has been profitable.
- HRL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- HRL has a better Return On Assets (3.57%) than 63.22% of its industry peers.
- HRL has a Return On Equity (6.05%) which is in line with its industry peers.
- With a decent Return On Invested Capital value of 5.99%, HRL is doing good in the industry, outperforming 65.52% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for HRL is significantly below the industry average of 27.79%.
| 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
- With a decent Profit Margin value of 3.95%, HRL is doing good in the industry, outperforming 66.67% of the companies in the same industry.
- In the last couple of years the Profit Margin of HRL has declined.
- HRL has a Operating Margin of 7.94%. This is in the better half of the industry: HRL outperforms 71.26% of its industry peers.
- In the last couple of years the Operating Margin of HRL has declined.
- With a Gross Margin value of 15.70%, HRL perfoms like the industry average, outperforming 43.68% of the companies in the same industry.
- HRL's Gross Margin has declined in the last couple of years.
| 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
- HRL has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying 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 worse debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 3.59 indicates that HRL is not in any danger for bankruptcy at the moment.
- The Altman-Z score of HRL (3.59) is better than 74.71% 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.
- Looking at the Debt to FCF ratio, with a value of 5.35, HRL is in the better half of the industry, outperforming 77.01% of the companies in the same industry.
- HRL has a Debt/Equity ratio of 0.36. This is a healthy value indicating a solid balance between debt and equity.
- Looking at the Debt to Equity ratio, with a value of 0.36, HRL is in line with its industry, outperforming 57.47% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.36 | ||
| Debt/FCF | 5.35 | ||
| Altman-Z | 3.59 |
ROIC/WACC0.78
WACC7.68%
2.3 Liquidity
- A Current Ratio of 2.47 indicates that HRL has no problem at all paying its short term obligations.
- The Current ratio of HRL (2.47) is better than 71.26% of its industry peers.
- A Quick Ratio of 1.20 indicates that HRL should not have too much problems paying its short term obligations.
- HRL has a Quick ratio of 1.20. This is in the better half 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
- HRL shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -13.29%.
- 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 5.70% on average over the next years.
- The Revenue is expected to grow by 1.92% on average over the next years.
EPS Next Y8%
EPS Next 2Y7.69%
EPS Next 3Y7.32%
EPS Next 5Y5.7%
Revenue Next Year2.06%
Revenue Next 2Y2.15%
Revenue Next 3Y2.08%
Revenue Next 5Y1.92%
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
- With a Price/Earnings ratio of 17.84, HRL is valued on the expensive side.
- Compared to the rest of the industry, the Price/Earnings ratio of HRL is on the same level as its industry peers.
- HRL's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.39.
- The Price/Forward Earnings ratio is 16.52, which indicates a correct valuation of HRL.
- Based on the Price/Forward Earnings ratio, HRL is valued a bit cheaper than the industry average as 67.82% of the companies are valued more expensively.
- HRL is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.72, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.84 | ||
| Fwd PE | 16.52 |
4.2 Price Multiples
- HRL's Enterprise Value to EBITDA is on the same level as the industry average.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of HRL is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.16 | ||
| EV/EBITDA | 12.78 |
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)2.23
PEG (5Y)N/A
EPS Next 2Y7.69%
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.
- HRL's Dividend Yield is rather good when compared to the industry average which is at 2.29. HRL pays more dividend than 83.91% of the companies in the same industry.
- HRL's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| 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
- HRL pays out 132.41% of its income as dividend. This is not a sustainable payout ratio.
- The dividend of HRL is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP132.41%
EPS Next 2Y7.69%
EPS Next 3Y7.32%
HORMEL FOODS CORP / HRL FAQ
What is the fundamental rating for HRL stock?
ChartMill assigns a fundamental rating of 4 / 10 to HRL.
What is the valuation status for HRL stock?
ChartMill assigns a valuation rating of 3 / 10 to HORMEL FOODS CORP (HRL). This can be considered as Overvalued.
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% in the next year.
Can you provide the dividend sustainability for HRL stock?
The dividend rating of HORMEL FOODS CORP (HRL) is 7 / 10 and the dividend payout ratio is 132.41%.