HERSHEY CO/THE (HSY.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:HSY - US4278661081 - Common Stock
164 EUR
-5.14 (-3.04%)
We assign a fundamental rating of 6 out of 10 to HSY. HSY was compared to 62 industry peers in the Food Products industry. While HSY has a great profitability rating, there are some minor concerns on its financial health. HSY has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
- HSY had positive earnings in the past year.
- HSY had a positive operating cash flow in the past year.
- Each year in the past 5 years HSY has been profitable.
- HSY had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- With an excellent Return On Assets value of 10.01%, HSY belongs to the best of the industry, outperforming 91.94% of the companies in the same industry.
- With an excellent Return On Equity value of 29.79%, HSY belongs to the best of the industry, outperforming 93.55% of the companies in the same industry.
- With an excellent Return On Invested Capital value of 16.48%, HSY belongs to the best of the industry, outperforming 96.77% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for HSY is significantly above the industry average of 7.38%.
- The 3 year average ROIC (23.99%) for HSY is well above the current ROIC(16.48%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.01% | ||
| ROE | 29.79% | ||
| ROIC | 16.48% |
ROA(3y)15.94%
ROA(5y)15.2%
ROE(3y)47.46%
ROE(5y)50.64%
ROIC(3y)23.99%
ROIC(5y)22.85%
1.3 Margins
- With an excellent Profit Margin value of 11.84%, HSY belongs to the best of the industry, outperforming 90.32% of the companies in the same industry.
- HSY's Profit Margin has improved in the last couple of years.
- HSY's Operating Margin of 17.27% is amongst the best of the industry. HSY outperforms 95.16% of its industry peers.
- In the last couple of years the Operating Margin of HSY has grown nicely.
- HSY's Gross Margin of 37.74% is in line compared to the rest of the industry. HSY outperforms 54.84% of its industry peers.
- In the last couple of years the Gross Margin of HSY has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.27% | ||
| PM (TTM) | 11.84% | ||
| GM | 37.74% |
OM growth 3Y4.4%
OM growth 5Y4.06%
PM growth 3Y6.38%
PM growth 5Y6.61%
GM growth 3Y1.55%
GM growth 5Y0.85%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), HSY is creating value.
- The number of shares outstanding for HSY has been reduced compared to 1 year ago.
- HSY has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, HSY has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 4.67 indicates that HSY is not in any danger for bankruptcy at the moment.
- HSY's Altman-Z score of 4.67 is amongst the best of the industry. HSY outperforms 90.32% of its industry peers.
- The Debt to FCF ratio of HSY is 3.05, which is a good value as it means it would take HSY, 3.05 years of fcf income to pay off all of its debts.
- HSY's Debt to FCF ratio of 3.05 is amongst the best of the industry. HSY outperforms 85.48% of its industry peers.
- HSY has a Debt/Equity ratio of 1.07. This is a high value indicating a heavy dependency on external financing.
- The Debt to Equity ratio of HSY (1.07) is worse than 72.58% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.07 | ||
| Debt/FCF | 3.05 | ||
| Altman-Z | 4.67 |
ROIC/WACC2.02
WACC8.14%
2.3 Liquidity
- HSY has a Current Ratio of 1.36. This is a normal value and indicates that HSY is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Current ratio, with a value of 1.36, HSY is in the better half of the industry, outperforming 61.29% of the companies in the same industry.
- HSY has a Quick Ratio of 1.36. This is a bad value and indicates that HSY is not financially healthy enough and could expect problems in meeting its short term obligations.
- HSY has a Quick ratio (0.83) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.36 | ||
| Quick Ratio | 0.83 |
3. Growth
3.1 Past
- HSY shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -16.21%.
- The Earnings Per Share has been growing by 10.11% on average over the past years. This is quite good.
- HSY shows a small growth in Revenue. In the last year, the Revenue has grown by 4.71%.
- The Revenue has been growing slightly by 7.00% on average over the past years.
EPS 1Y (TTM)-16.21%
EPS 3Y9.28%
EPS 5Y10.11%
EPS Q2Q%-44.44%
Revenue 1Y (TTM)4.71%
Revenue growth 3Y7.68%
Revenue growth 5Y7%
Sales Q2Q%6.49%
3.2 Future
- The Earnings Per Share is expected to grow by 2.75% on average over the next years.
- The Revenue is expected to grow by 3.41% on average over the next years.
EPS Next Y-35.36%
EPS Next 2Y-12.7%
EPS Next 3Y-3.89%
EPS Next 5Y2.75%
Revenue Next Year3.72%
Revenue Next 2Y3.63%
Revenue Next 3Y3.36%
Revenue Next 5Y3.41%
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 decreasing.
- 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 26.41, which means the current valuation is very expensive for HSY.
- 62.90% of the companies in the same industry are cheaper than HSY, based on the Price/Earnings ratio.
- HSY is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 26.97, which means the current valuation is very expensive for HSY.
- Based on the Price/Forward Earnings ratio, HSY is valued a bit more expensive than 69.35% of the companies in the same industry.
- HSY is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.41 | ||
| Fwd PE | 26.97 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HSY indicates a slightly more expensive valuation: HSY is more expensive than 70.97% of the companies listed in the same industry.
- HSY's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.09 | ||
| EV/EBITDA | 17.87 |
4.3 Compensation for Growth
- HSY has an outstanding profitability rating, which may justify a higher PE ratio.
- HSY's earnings are expected to decrease with -3.89% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)2.61
EPS Next 2Y-12.7%
EPS Next 3Y-3.89%
5. Dividend
5.1 Amount
- HSY has a Yearly Dividend Yield of 2.87%.
- Compared to an average industry Dividend Yield of 2.38, HSY pays a bit more dividend than its industry peers.
- HSY's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.87% |
5.2 History
- On average, the dividend of HSY grows each year by 12.83%, which is quite nice.
Dividend Growth(5Y)12.83%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
- HSY pays out 79.75% of its income as dividend. This is not a sustainable payout ratio.
- The dividend of HSY is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP79.75%
EPS Next 2Y-12.7%
EPS Next 3Y-3.89%
HERSHEY CO/THE / HSY.DE FAQ
What is the fundamental rating for HSY stock?
ChartMill assigns a fundamental rating of 6 / 10 to HSY.DE.
Can you provide the valuation status for HERSHEY CO/THE?
ChartMill assigns a valuation rating of 2 / 10 to HERSHEY CO/THE (HSY.DE). This can be considered as Overvalued.
What is the profitability of HSY stock?
HERSHEY CO/THE (HSY.DE) has a profitability rating of 9 / 10.
Can you provide the PE and PB ratios for HSY stock?
The Price/Earnings (PE) ratio for HERSHEY CO/THE (HSY.DE) is 26.41 and the Price/Book (PB) ratio is 8.56.
Can you provide the expected EPS growth for HSY stock?
The Earnings per Share (EPS) of HERSHEY CO/THE (HSY.DE) is expected to decline by -35.36% in the next year.