HERSHEY CO/THE (HSY) Stock Fundamental Analysis
USA - NYSE:HSY - US4278661081 - Common Stock
185.56 USD
+0.55 (+0.3%)
185.56 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to HSY. HSY was compared to 89 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
HSY had positive earnings in the past year.
In the past year HSY had a positive cash flow from operations.
Each year in the past 5 years HSY has been profitable.
Each year in the past 5 years HSY had a positive operating cash flow.
1.2 Ratios
HSY has a Return On Assets of 11.21%. This is amongst the best in the industry. HSY outperforms 93.26% of its industry peers.
Looking at the Return On Equity, with a value of 33.89%, HSY belongs to the top of the industry, outperforming 98.88% of the companies in the same industry.
HSY's Return On Invested Capital of 17.69% is amongst the best of the industry. HSY outperforms 95.51% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HSY is below the industry average of 28.32%.
The 3 year average ROIC (23.99%) for HSY is well above the current ROIC(17.69%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.21% | ||
| ROE | 33.89% | ||
| ROIC | 17.69% |
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
The Profit Margin of HSY (13.54%) is better than 94.38% of its industry peers.
HSY's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 19.49%, HSY belongs to the best of the industry, outperforming 95.51% of the companies in the same industry.
In the last couple of years the Operating Margin of HSY has grown nicely.
HSY's Gross Margin of 40.13% is amongst the best of the industry. HSY outperforms 91.01% 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 | 19.49% | ||
| PM (TTM) | 13.54% | ||
| GM | 40.13% |
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
HSY has an Altman-Z score of 4.52. This indicates that HSY is financially healthy and has little risk of bankruptcy at the moment.
HSY has a better Altman-Z score (4.52) than 86.52% of its industry peers.
The Debt to FCF ratio of HSY is 3.57, which is a good value as it means it would take HSY, 3.57 years of fcf income to pay off all of its debts.
HSY's Debt to FCF ratio of 3.57 is fine compared to the rest of the industry. HSY outperforms 79.78% of its industry peers.
A Debt/Equity ratio of 1.18 is on the high side and indicates that HSY has dependencies on debt financing.
The Debt to Equity ratio of HSY (1.18) is worse than 74.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.18 | ||
| Debt/FCF | 3.57 | ||
| Altman-Z | 4.52 |
ROIC/WACC2.19
WACC8.06%
2.3 Liquidity
HSY has a Current Ratio of 1.53. 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 Current ratio (1.53) which is comparable to the rest of the industry.
HSY has a Quick Ratio of 1.53. 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 of 0.89. This is comparable to the rest of the industry: HSY outperforms 51.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.53 | ||
| Quick Ratio | 0.89 |
3. Growth
3.1 Past
The earnings per share for HSY have decreased by -7.03% in the last year.
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.
Looking at the last year, HSY shows a small growth in Revenue. The Revenue has grown by 2.55% in the last year.
The Revenue has been growing slightly by 7.00% on average over the past years.
EPS 1Y (TTM)-7.03%
EPS 3Y9.28%
EPS 5Y10.11%
EPS Q2Q%-4.72%
Revenue 1Y (TTM)2.55%
Revenue growth 3Y7.68%
Revenue growth 5Y7%
Sales Q2Q%26.04%
3.2 Future
HSY is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.40% yearly.
The Revenue is expected to grow by 3.26% on average over the next years.
EPS Next Y-36.08%
EPS Next 2Y-15.14%
EPS Next 3Y-6.32%
EPS Next 5Y3.4%
Revenue Next Year2.99%
Revenue Next 2Y3.38%
Revenue Next 3Y3.08%
Revenue Next 5Y3.26%
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 22.28, which indicates a rather expensive current valuation of HSY.
The rest of the industry has a similar Price/Earnings ratio as HSY.
The average S&P500 Price/Earnings ratio is at 27.27. HSY is around the same levels.
With a Price/Forward Earnings ratio of 27.50, HSY can be considered very expensive at the moment.
The rest of the industry has a similar Price/Forward Earnings ratio as HSY.
HSY's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 22.77.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.28 | ||
| Fwd PE | 27.5 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as HSY.
Based on the Price/Free Cash Flow ratio, HSY is valued a bit cheaper than 65.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.82 | ||
| EV/EBITDA | 15.69 |
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 -6.32% in the coming years.
PEG (NY)N/A
PEG (5Y)2.2
EPS Next 2Y-15.14%
EPS Next 3Y-6.32%
5. Dividend
5.1 Amount
HSY has a Yearly Dividend Yield of 2.95%.
Compared to an average industry Dividend Yield of 5.03, HSY pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.38, HSY pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.95% |
5.2 History
On average, the dividend of HSY grows each year by 12.83%, which is quite nice.
HSY has paid a dividend for at least 10 years, which is 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
70.84% of the earnings are spent on dividend by HSY. This is not a sustainable payout ratio.
HSY's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP70.84%
EPS Next 2Y-15.14%
EPS Next 3Y-6.32%
185.56
+0.55 (+0.3%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners84.52%
Inst Owner Change3.25%
Ins Owners0.19%
Ins Owner Change1.18%
Market Cap37.62B
Analysts56.25
Price Target187.83 (1.22%)
Short Float %7.14%
Short Ratio5.97
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.95% |
Yearly Dividend5.33
Dividend Growth(5Y)12.83%
DP70.84%
Div Incr Years15
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)13.54%
Min EPS beat(2)6.26%
Max EPS beat(2)20.83%
EPS beat(4)3
Avg EPS beat(4)7.44%
Min EPS beat(4)-9.53%
Max EPS beat(4)20.83%
EPS beat(8)6
Avg EPS beat(8)4.38%
EPS beat(12)10
Avg EPS beat(12)5.38%
EPS beat(16)14
Avg EPS beat(16)6.03%
Revenue beat(2)1
Avg Revenue beat(2)1.02%
Min Revenue beat(2)-0.59%
Max Revenue beat(2)2.62%
Revenue beat(4)2
Avg Revenue beat(4)-0.3%
Min Revenue beat(4)-3.88%
Max Revenue beat(4)2.62%
Revenue beat(8)4
Avg Revenue beat(8)-1.21%
Revenue beat(12)7
Avg Revenue beat(12)-0.37%
Revenue beat(16)11
Avg Revenue beat(16)1.07%
PT rev (1m)1.48%
PT rev (3m)12.37%
EPS NQ rev (1m)-2.59%
EPS NQ rev (3m)-26.96%
EPS NY rev (1m)-0.1%
EPS NY rev (3m)-0.5%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)-0.79%
Revenue NY rev (1m)0.36%
Revenue NY rev (3m)0.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.28 | ||
| Fwd PE | 27.5 | ||
| P/S | 3.33 | ||
| P/FCF | 23.82 | ||
| P/OCF | 17.53 | ||
| P/B | 8.33 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.69 |
EPS(TTM)8.33
EY4.49%
EPS(NY)6.75
Fwd EY3.64%
FCF(TTM)7.79
FCFY4.2%
OCF(TTM)10.58
OCFY5.7%
SpS55.72
BVpS22.27
TBVpS-2.3
PEG (NY)N/A
PEG (5Y)2.2
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.21% | ||
| ROE | 33.89% | ||
| ROCE | 20.47% | ||
| ROIC | 17.69% | ||
| ROICexc | 19.3% | ||
| ROICexgc | 38.44% | ||
| OM | 19.49% | ||
| PM (TTM) | 13.54% | ||
| GM | 40.13% | ||
| FCFM | 13.98% |
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-Score4
Asset Turnover0.83
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.18 | ||
| Debt/FCF | 3.57 | ||
| Debt/EBITDA | 1.99 | ||
| Cap/Depr | 117.95% | ||
| Cap/Sales | 5.02% | ||
| Interest Coverage | 11.92 | ||
| Cash Conversion | 80.02% | ||
| Profit Quality | 103.22% | ||
| Current Ratio | 1.53 | ||
| Quick Ratio | 0.89 | ||
| Altman-Z | 4.52 |
F-Score4
WACC8.06%
ROIC/WACC2.19
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)-7.03%
EPS 3Y9.28%
EPS 5Y10.11%
EPS Q2Q%-4.72%
EPS Next Y-36.08%
EPS Next 2Y-15.14%
EPS Next 3Y-6.32%
EPS Next 5Y3.4%
Revenue 1Y (TTM)2.55%
Revenue growth 3Y7.68%
Revenue growth 5Y7%
Sales Q2Q%26.04%
Revenue Next Year2.99%
Revenue Next 2Y3.38%
Revenue Next 3Y3.08%
Revenue Next 5Y3.26%
EBIT growth 1Y-15.39%
EBIT growth 3Y12.42%
EBIT growth 5Y11.34%
EBIT Next Year-10.22%
EBIT Next 3Y3.26%
EBIT Next 5Y6.27%
FCF growth 1Y-4.58%
FCF growth 3Y6.4%
FCF growth 5Y5.9%
OCF growth 1Y-5.22%
OCF growth 3Y6.52%
OCF growth 5Y7.49%