HERSHEY CO/THE (HSY) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HSY - US4278661081 - Common Stock
191.2 USD
+0.55 (+0.29%)
191.2 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to HSY. HSY was compared to 87 industry peers in the Food Products industry. While HSY belongs to the best of the industry regarding profitability, 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.
- 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
- HSY has a Return On Assets of 10.01%. This is amongst the best in the industry. HSY outperforms 93.10% of its industry peers.
- HSY has a better Return On Equity (29.79%) than 97.70% of its industry peers.
- HSY has a better Return On Invested Capital (16.48%) than 94.25% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for HSY is below the industry average of 27.79%.
- 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
- HSY has a better Profit Margin (11.84%) than 93.10% of its industry peers.
- In the last couple of years the Profit Margin of HSY has grown nicely.
- Looking at the Operating Margin, with a value of 17.27%, HSY belongs to the top of the industry, outperforming 96.55% of the companies in the same industry.
- HSY's Operating Margin has improved in the last couple of years.
- HSY's Gross Margin of 37.74% is amongst the best of the industry. HSY outperforms 83.91% 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.
- HSY has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, HSY has less shares outstanding
- HSY has a better debt/assets ratio than last year.
2.2 Solvency
- HSY has an Altman-Z score of 4.57. This indicates that HSY is financially healthy and has little risk of bankruptcy at the moment.
- With an excellent Altman-Z score value of 4.57, HSY belongs to the best of the industry, outperforming 85.06% of the companies in the same industry.
- 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 has a Debt to FCF ratio of 3.05. This is amongst the best in the industry. HSY outperforms 82.76% 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 worse Debt to Equity ratio (1.07) than 72.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.07 | ||
| Debt/FCF | 3.05 | ||
| Altman-Z | 4.57 |
ROIC/WACC2
WACC8.23%
2.3 Liquidity
- A Current Ratio of 1.36 indicates that HSY should not have too much problems paying its short term obligations.
- HSY has a Current ratio (1.36) which is comparable to the rest of the industry.
- 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
- The earnings per share for HSY have decreased strongly by -16.21% in the last year.
- The Earnings Per Share has been growing by 10.11% on average over the past years. This is quite good.
- Looking at the last year, HSY shows a small growth in Revenue. The Revenue has grown by 4.71% in the last year.
- 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
- 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.
- 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
- 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
- Based on the Price/Earnings ratio of 26.23, the valuation of HSY can be described as expensive.
- Compared to the rest of the industry, the Price/Earnings ratio of HSY is on the same level as its industry peers.
- 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.
- HSY is valuated quite expensively with a Price/Forward Earnings ratio of 26.78.
- HSY's Price/Forward Earnings is on the same level as the industry average.
- 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 | 26.23 | ||
| Fwd PE | 26.78 |
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.
- Based on the Price/Free Cash Flow ratio, HSY is valued a bit cheaper than 63.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.93 | ||
| EV/EBITDA | 17.26 |
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)2.6
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.
- Compared to an average industry Dividend Yield of 2.29, HSY pays a bit more dividend than its industry peers.
- 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.
- HSY has been paying a dividend for at least 10 years, so it has a reliable track record.
- HSY has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)12.83%
Div Incr Years15
Div Non Decr Years34
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 FAQ
What is the fundamental rating for HSY stock?
ChartMill assigns a fundamental rating of 6 / 10 to HSY.
Can you provide the valuation status for HERSHEY CO/THE?
ChartMill assigns a valuation rating of 3 / 10 to HERSHEY CO/THE (HSY). This can be considered as Overvalued.
What is the profitability of HSY stock?
HERSHEY CO/THE (HSY) 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) is 26.23 and the Price/Book (PB) ratio is 8.49.
Can you provide the expected EPS growth for HSY stock?
The Earnings per Share (EPS) of HERSHEY CO/THE (HSY) is expected to decline by -35.36% in the next year.