HERSHEY CO/THE (HSY) Stock Fundamental Analysis
NYSE:HSY - New York Stock Exchange, Inc. - US4278661081 - Common Stock - Currency: USD
HSY gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 88 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 valuation in line with the averages, but on the other hand it 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.
HSY had positive earnings in each of the past 5 years.
HSY had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of HSY (17.16%) is better than 95.45% of its industry peers.
The Return On Equity of HSY (47.11%) is better than 98.86% of its industry peers.
HSY's Return On Invested Capital of 25.49% is amongst the best of the industry. HSY outperforms 97.73% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HSY is significantly above the industry average of 9.00%.
The last Return On Invested Capital (25.49%) for HSY is above the 3 year average (23.99%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.16% | ||
| ROE | 47.11% | ||
| ROIC | 25.49% |
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 19.83%, HSY belongs to the best of the industry, outperforming 95.45% of the companies in the same industry.
In the last couple of years the Profit Margin of HSY has grown nicely.
HSY has a better Operating Margin (26.78%) than 97.73% of its industry peers.
HSY's Operating Margin has improved in the last couple of years.
HSY has a Gross Margin of 47.43%. This is amongst the best in the industry. HSY outperforms 97.73% of its industry peers.
HSY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.78% | ||
| PM (TTM) | 19.83% | ||
| GM | 47.43% |
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
HSY has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, HSY has less shares outstanding
The number of shares outstanding for HSY has been reduced compared to 5 years ago.
HSY has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.69 indicates that HSY is not in any danger for bankruptcy at the moment.
HSY has a Altman-Z score of 4.69. This is amongst the best in the industry. HSY outperforms 85.23% of its industry peers.
The Debt to FCF ratio of HSY is 2.65, which is a good value as it means it would take HSY, 2.65 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of HSY (2.65) is better than 79.55% of its industry peers.
HSY has a Debt/Equity ratio of 0.95. This is a neutral value indicating HSY is somewhat dependend on debt financing.
HSY has a Debt to Equity ratio of 0.95. This is in the lower half of the industry: HSY underperforms 72.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.95 | ||
| Debt/FCF | 2.65 | ||
| Altman-Z | 4.69 |
ROIC/WACC3.09
WACC8.24%
2.3 Liquidity
A Current Ratio of 0.96 indicates that HSY may have some problems paying its short term obligations.
With a Current ratio value of 0.96, HSY is not doing good in the industry: 72.73% of the companies in the same industry are doing better.
A Quick Ratio of 0.64 indicates that HSY may have some problems paying its short term obligations.
HSY has a Quick ratio of 0.64. This is in the lower half of the industry: HSY underperforms 64.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.96 | ||
| Quick Ratio | 0.64 |
3. Growth
3.1 Past
The earnings per share for HSY have decreased by -2.29% in the last year.
HSY shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.11% yearly.
Looking at the last year, HSY shows a small growth in Revenue. The Revenue has grown by 0.33% in the last 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)-2.29%
EPS 3Y9.28%
EPS 5Y10.11%
EPS Q2Q%33.17%
Revenue 1Y (TTM)0.33%
Revenue growth 3Y7.68%
Revenue growth 5Y7%
Sales Q2Q%8.67%
3.2 Future
The Earnings Per Share is expected to grow by 1.15% on average over the next years.
Based on estimates for the next years, HSY will show a small growth in Revenue. The Revenue will grow by 2.96% on average per year.
EPS Next Y-33.9%
EPS Next 2Y-15.24%
EPS Next 3Y-6.31%
EPS Next 5Y1.15%
Revenue Next Year2.25%
Revenue Next 2Y2.51%
Revenue Next 3Y2.46%
Revenue Next 5Y2.96%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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 17.78, which indicates a rather expensive current valuation of HSY.
Based on the Price/Earnings ratio, HSY is valued a bit cheaper than the industry average as 63.64% of the companies are valued more expensively.
HSY's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.29.
The Price/Forward Earnings ratio is 26.90, which means the current valuation is very expensive for HSY.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HSY is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.08, HSY is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.78 | ||
| Fwd PE | 26.9 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HSY is on the same level as its industry peers.
65.91% of the companies in the same industry are more expensive than HSY, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.52 | ||
| EV/EBITDA | 10.65 |
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 -6.31% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)1.76
EPS Next 2Y-15.24%
EPS Next 3Y-6.31%
5. Dividend
5.1 Amount
HSY has a Yearly Dividend Yield of 3.29%. 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 4.36.
Compared to an average S&P500 Dividend Yield of 2.52, HSY pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.29% |
5.2 History
On average, the dividend of HSY grows each year by 12.83%, which is quite nice.
HSY has been paying a dividend for at least 10 years, so it has a reliable track record.
HSY has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)12.83%
Div Incr Years15
Div Non Decr Years34
5.3 Sustainability
HSY pays out 48.84% of its income as dividend. This is a bit on the high side, but may be sustainable.
HSY's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP48.84%
EPS Next 2Y-15.24%
EPS Next 3Y-6.31%
166.59
+2.36 (+1.44%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners86.36%
Inst Owner Change0.88%
Ins Owners0.13%
Ins Owner Change5.83%
Market Cap33.74B
Analysts55.29
Price Target165.65 (-0.56%)
Short Float %5.39%
Short Ratio3.78
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.29% |
Yearly Dividend5.33
Dividend Growth(5Y)12.83%
DP48.84%
Div Incr Years15
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.34%
Min EPS beat(2)-9.53%
Max EPS beat(2)12.21%
EPS beat(4)2
Avg EPS beat(4)0.15%
Min EPS beat(4)-12.15%
Max EPS beat(4)12.21%
EPS beat(8)6
Avg EPS beat(8)2.8%
EPS beat(12)10
Avg EPS beat(12)5.19%
EPS beat(16)14
Avg EPS beat(16)4.81%
Revenue beat(2)1
Avg Revenue beat(2)-1.62%
Min Revenue beat(2)-3.88%
Max Revenue beat(2)0.65%
Revenue beat(4)2
Avg Revenue beat(4)-2.68%
Min Revenue beat(4)-10.97%
Max Revenue beat(4)3.49%
Revenue beat(8)4
Avg Revenue beat(8)-1.44%
Revenue beat(12)8
Avg Revenue beat(12)0.48%
Revenue beat(16)12
Avg Revenue beat(16)1.88%
PT rev (1m)1.13%
PT rev (3m)-11.49%
EPS NQ rev (1m)-2.06%
EPS NQ rev (3m)-23.45%
EPS NY rev (1m)-1.51%
EPS NY rev (3m)-23.94%
Revenue NQ rev (1m)-1.84%
Revenue NQ rev (3m)-11.73%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-0.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.78 | ||
| Fwd PE | 26.9 | ||
| P/S | 3.01 | ||
| P/FCF | 17.52 | ||
| P/OCF | 13.33 | ||
| P/B | 7.16 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.65 |
EPS(TTM)9.37
EY5.62%
EPS(NY)6.19
Fwd EY3.72%
FCF(TTM)9.51
FCFY5.71%
OCF(TTM)12.5
OCFY7.5%
SpS55.3
BVpS23.28
TBVpS-1.15
PEG (NY)N/A
PEG (5Y)1.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.16% | ||
| ROE | 47.11% | ||
| ROCE | 33.26% | ||
| ROIC | 25.49% | ||
| ROICexc | 27.44% | ||
| ROICexgc | 56.64% | ||
| OM | 26.78% | ||
| PM (TTM) | 19.83% | ||
| GM | 47.43% | ||
| FCFM | 17.19% |
ROA(3y)15.94%
ROA(5y)15.2%
ROE(3y)47.46%
ROE(5y)50.64%
ROIC(3y)23.99%
ROIC(5y)22.85%
ROICexc(3y)25.42%
ROICexc(5y)24.68%
ROICexgc(3y)57.82%
ROICexgc(5y)56.6%
ROCE(3y)30.24%
ROCE(5y)28.38%
ROICexcg growth 3Y3.23%
ROICexcg growth 5Y-4.21%
ROICexc growth 3Y8.1%
ROICexc growth 5Y0.23%
OM growth 3Y4.4%
OM growth 5Y4.06%
PM growth 3Y6.38%
PM growth 5Y6.61%
GM growth 3Y1.55%
GM growth 5Y0.85%
F-Score7
Asset Turnover0.87
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.95 | ||
| Debt/FCF | 2.65 | ||
| Debt/EBITDA | 1.3 | ||
| Cap/Depr | 133.1% | ||
| Cap/Sales | 5.41% | ||
| Interest Coverage | 16.68 | ||
| Cash Conversion | 73.28% | ||
| Profit Quality | 86.69% | ||
| Current Ratio | 0.96 | ||
| Quick Ratio | 0.64 | ||
| Altman-Z | 4.69 |
F-Score7
WACC8.24%
ROIC/WACC3.09
Cap/Depr(3y)151.29%
Cap/Depr(5y)152.21%
Cap/Sales(3y)5.77%
Cap/Sales(5y)5.65%
Profit Quality(3y)93.33%
Profit Quality(5y)97.13%
High Growth Momentum
Growth
EPS 1Y (TTM)-2.29%
EPS 3Y9.28%
EPS 5Y10.11%
EPS Q2Q%33.17%
EPS Next Y-33.9%
EPS Next 2Y-15.24%
EPS Next 3Y-6.31%
EPS Next 5Y1.15%
Revenue 1Y (TTM)0.33%
Revenue growth 3Y7.68%
Revenue growth 5Y7%
Sales Q2Q%8.67%
Revenue Next Year2.25%
Revenue Next 2Y2.51%
Revenue Next 3Y2.46%
Revenue Next 5Y2.96%
EBIT growth 1Y16.97%
EBIT growth 3Y12.42%
EBIT growth 5Y11.34%
EBIT Next Year-10.82%
EBIT Next 3Y1.75%
EBIT Next 5Y4.55%
FCF growth 1Y24.07%
FCF growth 3Y6.4%
FCF growth 5Y5.9%
OCF growth 1Y8.97%
OCF growth 3Y6.52%
OCF growth 5Y7.49%