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 91 industry peers in the Food Products industry. Both the health and profitability get an excellent rating, making HSY a very profitable company, without any liquidiy or solvency issues. 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
HSY had positive earnings in the past year.
HSY had a positive operating cash flow in the past year.
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 (11.80%) is better than 94.51% of its industry peers.
HSY has a better Return On Equity (35.18%) than 96.70% of its industry peers.
Looking at the Return On Invested Capital, with a value of 18.35%, HSY belongs to the top of the industry, outperforming 96.70% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for HSY is below the industry average of 28.39%.
The last Return On Invested Capital (18.35%) 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 | 11.8% | ||
| ROE | 35.18% | ||
| ROIC | 18.35% |
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 (15.32%) than 94.51% of its industry peers.
HSY's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 21.57%, HSY belongs to the top of the industry, outperforming 97.80% of the companies in the same industry.
In the last couple of years the Operating Margin of HSY has grown nicely.
The Gross Margin of HSY (42.57%) is better than 96.70% of its industry peers.
HSY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.57% | ||
| PM (TTM) | 15.32% | ||
| GM | 42.57% |
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.
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
An Altman-Z score of 4.22 indicates that HSY is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 4.22, HSY belongs to the best of the industry, outperforming 81.32% of the companies in the same industry.
HSY has a debt to FCF ratio of 3.25. This is a good value and a sign of high solvency as HSY would need 3.25 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 3.25, HSY belongs to the best of the industry, outperforming 82.42% of the companies in the same industry.
HSY has a Debt/Equity ratio of 1.14. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.14, HSY is doing worse than 73.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.14 | ||
| Debt/FCF | 3.25 | ||
| Altman-Z | 4.22 |
ROIC/WACC1.86
WACC9.88%
2.3 Liquidity
A Current Ratio of 1.59 indicates that HSY should not have too much problems paying its short term obligations.
HSY's Current ratio of 1.59 is in line compared to the rest of the industry. HSY outperforms 56.04% of its industry peers.
A Quick Ratio of 1.11 indicates that HSY should not have too much problems paying its short term obligations.
HSY's Quick ratio of 1.11 is fine compared to the rest of the industry. HSY outperforms 65.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.59 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
The earnings per share for HSY have decreased strongly by -13.51% in the last year.
The Earnings Per Share has been growing by 10.11% on average over the past years. This is quite good.
HSY shows a decrease in Revenue. In the last year, the revenue decreased by -5.91%.
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)-13.51%
EPS 3Y9.28%
EPS 5Y10.11%
EPS Q2Q%-31.92%
Revenue 1Y (TTM)-5.91%
Revenue growth 3Y7.68%
Revenue growth 5Y7%
Sales Q2Q%-13.75%
3.2 Future
The Earnings Per Share is expected to grow by 1.71% on average over the next years.
The Revenue is expected to grow by 2.87% on average over the next years.
EPS Next Y-35.59%
EPS Next 2Y-16.27%
EPS Next 3Y-6.28%
EPS Next 5Y1.71%
Revenue Next Year2.46%
Revenue Next 2Y2.75%
Revenue Next 3Y2.66%
Revenue Next 5Y2.87%
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 19.78, HSY is valued on the expensive side.
Based on the Price/Earnings ratio, HSY is valued a bit cheaper than 61.54% of the companies in the same industry.
HSY is valuated rather cheaply when we compare the Price/Earnings ratio to 27.15, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 25.26 indicates a quite expensive valuation of HSY.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HSY is on the same level as its industry peers.
HSY's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.60.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.78 | ||
| Fwd PE | 25.26 |
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 the industry average as 69.23% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.46 | ||
| EV/EBITDA | 13.67 |
4.3 Compensation for Growth
The excellent profitability rating of HSY may justify a higher PE ratio.
A cheap valuation may be justified as HSY's earnings are expected to decrease with -6.28% in the coming years.
PEG (NY)N/A
PEG (5Y)1.96
EPS Next 2Y-16.27%
EPS Next 3Y-6.28%
5. Dividend
5.1 Amount
HSY has a Yearly Dividend Yield of 3.28%.
HSY's Dividend Yield is a higher than the industry average which is at 4.75.
Compared to an average S&P500 Dividend Yield of 2.42, HSY pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.28% |
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
65.72% of the earnings are spent on dividend by HSY. This is not a sustainable payout ratio.
The dividend of HSY is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP65.72%
EPS Next 2Y-16.27%
EPS Next 3Y-6.28%
165.95
-1.04 (-0.62%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners121.15%
Inst Owner Change0.7%
Ins Owners0.19%
Ins Owner Change5.95%
Market Cap33.62B
Analysts56.36
Price Target166.94 (0.6%)
Short Float %5.81%
Short Ratio5.14
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.28% |
Yearly Dividend5.33
Dividend Growth(5Y)12.83%
DP65.72%
Div Incr Years15
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)9.23%
Min EPS beat(2)6.26%
Max EPS beat(2)12.21%
EPS beat(4)2
Avg EPS beat(4)-0.81%
Min EPS beat(4)-12.15%
Max EPS beat(4)12.21%
EPS beat(8)6
Avg EPS beat(8)2.32%
EPS beat(12)10
Avg EPS beat(12)4.1%
EPS beat(16)14
Avg EPS beat(16)4.85%
Revenue beat(2)1
Avg Revenue beat(2)0.03%
Min Revenue beat(2)-0.59%
Max Revenue beat(2)0.65%
Revenue beat(4)1
Avg Revenue beat(4)-3.7%
Min Revenue beat(4)-10.97%
Max Revenue beat(4)0.65%
Revenue beat(8)3
Avg Revenue beat(8)-1.73%
Revenue beat(12)7
Avg Revenue beat(12)-0.12%
Revenue beat(16)11
Avg Revenue beat(16)1.36%
PT rev (1m)-0.9%
PT rev (3m)1.61%
EPS NQ rev (1m)-1.07%
EPS NQ rev (3m)-21.78%
EPS NY rev (1m)0.27%
EPS NY rev (3m)-3.01%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)0.08%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.78 | ||
| Fwd PE | 25.26 | ||
| P/S | 3.13 | ||
| P/FCF | 18.46 | ||
| P/OCF | 14.25 | ||
| P/B | 7.18 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.67 |
EPS(TTM)8.39
EY5.06%
EPS(NY)6.57
Fwd EY3.96%
FCF(TTM)8.99
FCFY5.42%
OCF(TTM)11.64
OCFY7.02%
SpS53.08
BVpS23.12
TBVpS-1.17
PEG (NY)N/A
PEG (5Y)1.96
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.8% | ||
| ROE | 35.18% | ||
| ROCE | 21.18% | ||
| ROIC | 18.35% | ||
| ROICexc | 21.25% | ||
| ROICexgc | 43.69% | ||
| OM | 21.57% | ||
| PM (TTM) | 15.32% | ||
| GM | 42.57% | ||
| FCFM | 16.93% |
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 Turnover0.77
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.14 | ||
| Debt/FCF | 3.25 | ||
| Debt/EBITDA | 1.91 | ||
| Cap/Depr | 115.23% | ||
| Cap/Sales | 5% | ||
| Interest Coverage | 12.59 | ||
| Cash Conversion | 84.65% | ||
| Profit Quality | 110.5% | ||
| Current Ratio | 1.59 | ||
| Quick Ratio | 1.11 | ||
| Altman-Z | 4.22 |
F-Score4
WACC9.88%
ROIC/WACC1.86
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)-13.51%
EPS 3Y9.28%
EPS 5Y10.11%
EPS Q2Q%-31.92%
EPS Next Y-35.59%
EPS Next 2Y-16.27%
EPS Next 3Y-6.28%
EPS Next 5Y1.71%
Revenue 1Y (TTM)-5.91%
Revenue growth 3Y7.68%
Revenue growth 5Y7%
Sales Q2Q%-13.75%
Revenue Next Year2.46%
Revenue Next 2Y2.75%
Revenue Next 3Y2.66%
Revenue Next 5Y2.87%
EBIT growth 1Y-18.22%
EBIT growth 3Y12.42%
EBIT growth 5Y11.34%
EBIT Next Year-11.97%
EBIT Next 3Y1.21%
EBIT Next 5Y3.93%
FCF growth 1Y-2.74%
FCF growth 3Y6.4%
FCF growth 5Y5.9%
OCF growth 1Y-2.79%
OCF growth 3Y6.52%
OCF growth 5Y7.49%