HERSHEY CO/THE (HSY.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:HSY - US4278661081 - Common Stock
169.14 EUR
+3.3 (+1.99%)
HSY gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 65 industry peers in the Food Products industry. HSY has an excellent profitability rating, but there are some minor concerns on its financial health. HSY does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
- In the past year HSY was profitable.
- In the past year HSY had a positive cash flow from operations.
- 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
- The Return On Assets of HSY (10.01%) is better than 89.06% of its industry peers.
- HSY has a better Return On Equity (29.79%) than 92.19% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 16.48%, HSY belongs to the top of the industry, outperforming 93.75% 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 7.95%.
- The last Return On Invested Capital (16.48%) for HSY is well below the 3 year average (23.99%), which needs to be investigated, but indicates that HSY had better years and this may not be a problem.
| 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
- Looking at the Profit Margin, with a value of 11.84%, HSY belongs to the top of the industry, outperforming 85.94% of the companies in the same industry.
- In the last couple of years the Profit Margin of HSY has grown nicely.
- HSY has a Operating Margin of 17.27%. This is amongst the best in the industry. HSY outperforms 92.19% of its industry peers.
- In the last couple of years the Operating Margin of HSY has grown nicely.
- HSY has a Gross Margin of 37.74%. This is comparable to the rest of the industry: HSY outperforms 54.69% 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
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so HSY is creating value.
- The number of shares outstanding for HSY has been reduced compared to 1 year ago.
- Compared to 5 years ago, HSY has less shares outstanding
- Compared to 1 year ago, HSY has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 4.61 indicates that HSY is not in any danger for bankruptcy at the moment.
- HSY's Altman-Z score of 4.61 is amongst the best of the industry. HSY outperforms 92.19% 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.
- Looking at the Debt to FCF ratio, with a value of 3.05, HSY belongs to the top of the industry, outperforming 82.81% of the companies in the same industry.
- A Debt/Equity ratio of 1.07 is on the high side and indicates that HSY has dependencies on debt financing.
- HSY's Debt to Equity ratio of 1.07 is on the low side compared to the rest of the industry. HSY is outperformed by 71.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.07 | ||
| Debt/FCF | 3.05 | ||
| Altman-Z | 4.61 |
ROIC/WACC2.02
WACC8.16%
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.
- The Current ratio of HSY (1.36) is comparable to the rest of the 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.
- Looking at the Quick ratio, with a value of 0.83, HSY is in line with its industry, outperforming 51.56% of the companies in the same 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.
- The Revenue has been growing slightly by 4.71% in the past year.
- Measured over the past years, HSY shows a small growth in Revenue. The Revenue has been growing by 7.00% on average per year.
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
- Based on estimates for the next years, HSY will show a small growth in Earnings Per Share. The EPS will grow by 2.75% on average per year.
- 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 Year3.7%
Revenue Next 2Y3.68%
Revenue Next 3Y3.4%
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
- With a Price/Earnings ratio of 27.15, HSY can be considered very expensive at the moment.
- Compared to the rest of the industry, the Price/Earnings ratio of HSY indicates a slightly more expensive valuation: HSY is more expensive than 62.50% of the companies listed in the same industry.
- HSY is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 27.73, HSY can be considered very expensive at the moment.
- HSY's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. HSY is more expensive than 67.19% 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 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.15 | ||
| Fwd PE | 27.73 |
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 73.44% of the companies listed in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of HSY is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.71 | ||
| EV/EBITDA | 17.5 |
4.3 Compensation for Growth
- HSY has an outstanding profitability rating, which may justify a higher PE ratio.
- A cheap valuation may be justified as HSY's earnings are expected to decrease with -3.89% in the coming years.
PEG (NY)N/A
PEG (5Y)2.69
EPS Next 2Y-12.7%
EPS Next 3Y-3.89%
5. Dividend
5.1 Amount
- HSY has a Yearly Dividend Yield of 2.87%. Purely for dividend investing, there may be better candidates out there.
- HSY's Dividend Yield is a higher than the industry average which is at 2.48.
- Compared to an average S&P500 Dividend Yield of 1.81, HSY pays a better dividend.
| 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.
- HSY's earnings are growing slower than its dividend. 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 27.15 and the Price/Book (PB) ratio is 8.8.
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.