HERSHEY CO/THE (HSY.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:HSY - US4278661081 - Common Stock
169.14 EUR
+3.3 (+1.99%)
We assign a fundamental rating of 6 out of 10 to HSY. HSY was compared to 62 industry peers in the Food Products industry. HSY has an excellent profitability rating, but 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
- In the past year HSY was profitable.
- In the past year HSY had a positive cash flow from operations.
- In the past 5 years HSY has always been profitable.
- Each year in the past 5 years HSY had a positive operating cash flow.
1.2 Ratios
- HSY's Return On Assets of 10.01% is amongst the best of the industry. HSY outperforms 91.94% of its industry peers.
- HSY has a Return On Equity of 29.79%. This is amongst the best in the industry. HSY outperforms 93.55% of its industry peers.
- 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.
- HSY had an Average Return On Invested Capital over the past 3 years of 23.99%. This is significantly above the industry average of 7.38%.
- 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
- HSY has a Profit Margin of 11.84%. This is amongst the best in the industry. HSY outperforms 90.32% of its industry peers.
- In the last couple of years the Profit Margin of HSY has grown nicely.
- HSY has a better Operating Margin (17.27%) than 95.16% of its industry peers.
- HSY's Operating Margin has improved in the last couple of years.
- Looking at the Gross Margin, with a value of 37.74%, HSY is in line with its industry, outperforming 54.84% of the companies in the same industry.
- 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.
- HSY has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for HSY has been reduced compared to 5 years ago.
- Compared to 1 year ago, HSY has an improved debt to assets ratio.
2.2 Solvency
- HSY has an Altman-Z score of 4.67. This indicates that HSY is financially healthy and has little risk of bankruptcy at the moment.
- The Altman-Z score of HSY (4.67) is better than 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.
- The Debt to FCF ratio of HSY (3.05) is better than 85.48% of its industry peers.
- A Debt/Equity ratio of 1.07 is on the high side and indicates that HSY has dependencies on debt financing.
- HSY has a Debt to Equity ratio of 1.07. This is in the lower half of the industry: HSY underperforms 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
WACC8.16%
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.
- HSY has a better Current ratio (1.36) than 61.29% of its industry peers.
- A Quick Ratio of 0.83 indicates that HSY may have some problems paying its short term obligations.
- The Quick ratio of HSY (0.83) 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%.
- Measured over the past years, HSY shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.11% on average per year.
- HSY shows a small growth in Revenue. In the last year, the Revenue has grown by 4.71%.
- 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
- HSY is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 2.75% yearly.
- HSY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.41% yearly.
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
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- 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
- A Price/Earnings ratio of 27.24 indicates a quite expensive valuation of HSY.
- Compared to the rest of the industry, the Price/Earnings ratio of HSY indicates a slightly more expensive valuation: HSY is more expensive than 62.90% of the companies listed in the same industry.
- When comparing the Price/Earnings ratio of HSY to the average of the S&P500 Index (27.21), we can say HSY is valued inline with the index average.
- Based on the Price/Forward Earnings ratio of 27.81, the valuation of HSY can be described as expensive.
- Based on the Price/Forward Earnings ratio, HSY is valued a bit more expensive than the industry average as 69.35% of the companies are valued more cheaply.
- When comparing the Price/Forward Earnings ratio of HSY to the average of the S&P500 Index (25.98), we can say HSY is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.24 | ||
| Fwd PE | 27.81 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, HSY is valued a bit more expensive than the industry average as 70.97% of the companies are valued more cheaply.
- HSY's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.78 | ||
| EV/EBITDA | 17.87 |
4.3 Compensation for Growth
- The excellent profitability rating of HSY 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)2.7
EPS Next 2Y-12.7%
EPS Next 3Y-3.89%
5. Dividend
5.1 Amount
- HSY has a Yearly Dividend Yield of 2.87%.
- HSY's Dividend Yield is a higher than the industry average which is at 2.38.
- 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
- The dividend of HSY is nicely growing with an annual growth rate of 12.83%!
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 27.24 and the Price/Book (PB) ratio is 8.82.
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.