HERSHEY CO/THE (HSY) Stock Fundamental Analysis
USA - NYSE:HSY - US4278661081 - Common Stock
179.2 USD
+1.06 (+0.6%)
179.95 USD
+0.75 (+0.42%)
HSY gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 86 industry peers in the Food Products industry. HSY has an excellent profitability rating, but there are some minor concerns on its financial health. HSY is valued correctly, but it does not seem to be growing.
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.
In the past 5 years HSY always reported a positive cash flow from operatings.
1.2 Ratios
HSY has a better Return On Assets (10.01%) than 91.86% of its industry peers.
With an excellent Return On Equity value of 29.79%, HSY belongs to the best of the industry, outperforming 95.35% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 16.48%, HSY belongs to the top of the industry, outperforming 94.19% 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 below the industry average of 29.14%.
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
With an excellent Profit Margin value of 11.84%, HSY belongs to the best of the industry, outperforming 90.70% of the companies in the same industry.
HSY's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 17.27%, HSY belongs to the best of the industry, outperforming 94.19% of the companies in the same industry.
In the last couple of years the Operating Margin of HSY has grown nicely.
Looking at the Gross Margin, with a value of 37.74%, HSY belongs to the top of the industry, outperforming 87.21% of the companies in the same industry.
HSY's Gross Margin has been stable in the last couple of years.
| 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.
The number of shares outstanding for HSY has been reduced compared to 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 4.40 indicates that HSY is not in any danger for bankruptcy at the moment.
HSY's Altman-Z score of 4.40 is amongst the best of the industry. HSY outperforms 87.21% of its industry peers.
HSY has a debt to FCF ratio of 3.05. This is a good value and a sign of high solvency as HSY would need 3.05 years to pay back of all of its debts.
The Debt to FCF ratio of HSY (3.05) is better than 83.72% 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.
Looking at the Debt to Equity ratio, with a value of 1.07, HSY is doing worse than 74.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.07 | ||
| Debt/FCF | 3.05 | ||
| Altman-Z | 4.4 |
ROIC/WACC2.03
WACC8.11%
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.
With a Current ratio value of 1.36, HSY is not doing good in the industry: 60.47% of the companies in the same industry are doing better.
A Quick Ratio of 0.83 indicates that HSY may have some problems paying its short term obligations.
With a Quick ratio value of 0.83, HSY perfoms like the industry average, outperforming 43.02% of the companies in the same 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%.
HSY shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.11% yearly.
The Revenue has been growing slightly by 4.71% in the past 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
HSY is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 1.55% yearly.
The Revenue is expected to grow by 3.19% on average over the next years.
EPS Next Y-35.65%
EPS Next 2Y-14.17%
EPS Next 3Y-4.79%
EPS Next 5Y1.55%
Revenue Next Year3.42%
Revenue Next 2Y3.59%
Revenue Next 3Y3.3%
Revenue Next 5Y3.19%
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
A Price/Earnings ratio of 24.58 indicates a rather expensive valuation of HSY.
HSY's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of HSY to the average of the S&P500 Index (25.89), we can say HSY is valued inline with the index average.
HSY is valuated quite expensively with a Price/Forward Earnings ratio of 25.96.
HSY's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 34.59. HSY is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.58 | ||
| Fwd PE | 25.96 |
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.
65.12% 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 | 20.55 | ||
| EV/EBITDA | 16.19 |
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 -4.79% in the coming years.
PEG (NY)N/A
PEG (5Y)2.43
EPS Next 2Y-14.17%
EPS Next 3Y-4.79%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.08%, HSY has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 5.22, HSY pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.36, HSY pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.08% |
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
HSY pays out 79.75% of its income as dividend. 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.
DP79.75%
EPS Next 2Y-14.17%
EPS Next 3Y-4.79%
179.2
+1.06 (+0.6%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners92.52%
Inst Owner Change-2.12%
Ins Owners0.2%
Ins Owner Change1.22%
Market Cap36.33B
Revenue(TTM)11.49B
Net Income(TTM)1.36B
Analysts65.71
Price Target194.88 (8.75%)
Short Float %5.51%
Short Ratio6.01
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.08% |
Yearly Dividend5.33
Dividend Growth(5Y)12.83%
DP79.75%
Div Incr Years15
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)20.61%
Min EPS beat(2)20.39%
Max EPS beat(2)20.83%
EPS beat(4)4
Avg EPS beat(4)14.92%
Min EPS beat(4)6.26%
Max EPS beat(4)20.83%
EPS beat(8)6
Avg EPS beat(8)6.32%
EPS beat(12)10
Avg EPS beat(12)6.89%
EPS beat(16)14
Avg EPS beat(16)7.08%
Revenue beat(2)2
Avg Revenue beat(2)1.9%
Min Revenue beat(2)1.19%
Max Revenue beat(2)2.62%
Revenue beat(4)3
Avg Revenue beat(4)0.97%
Min Revenue beat(4)-0.59%
Max Revenue beat(4)2.62%
Revenue beat(8)4
Avg Revenue beat(8)-1.28%
Revenue beat(12)7
Avg Revenue beat(12)-0.53%
Revenue beat(16)11
Avg Revenue beat(16)1.12%
PT rev (1m)1.45%
PT rev (3m)5.29%
EPS NQ rev (1m)-10.72%
EPS NQ rev (3m)-6.97%
EPS NY rev (1m)0.44%
EPS NY rev (3m)0.57%
Revenue NQ rev (1m)-0.27%
Revenue NQ rev (3m)-0.33%
Revenue NY rev (1m)0.35%
Revenue NY rev (3m)0.78%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.58 | ||
| Fwd PE | 25.96 | ||
| P/S | 3.16 | ||
| P/FCF | 20.55 | ||
| P/OCF | 15.85 | ||
| P/B | 7.96 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.19 |
EPS(TTM)7.29
EY4.07%
EPS(NY)6.9
Fwd EY3.85%
FCF(TTM)8.72
FCFY4.87%
OCF(TTM)11.31
OCFY6.31%
SpS56.67
BVpS22.52
TBVpS-1.9
PEG (NY)N/A
PEG (5Y)2.43
Graham Number60.77
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.01% | ||
| ROE | 29.79% | ||
| ROCE | 19.16% | ||
| ROIC | 16.48% | ||
| ROICexc | 18.51% | ||
| ROICexgc | 39.09% | ||
| OM | 17.27% | ||
| PM (TTM) | 11.84% | ||
| GM | 37.74% | ||
| FCFM | 15.39% |
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%
ROICexgc growth 3Y3.23%
ROICexgc 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 Turnover0.85
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.07 | ||
| Debt/FCF | 3.05 | ||
| Debt/EBITDA | 1.97 | ||
| Cap/Depr | 105.99% | ||
| Cap/Sales | 4.57% | ||
| Interest Coverage | 9.57 | ||
| Cash Conversion | 92.48% | ||
| Profit Quality | 130% | ||
| Current Ratio | 1.36 | ||
| Quick Ratio | 0.83 | ||
| Altman-Z | 4.4 |
F-Score4
WACC8.11%
ROIC/WACC2.03
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)-16.21%
EPS 3Y9.28%
EPS 5Y10.11%
EPS Q2Q%-44.44%
EPS Next Y-35.65%
EPS Next 2Y-14.17%
EPS Next 3Y-4.79%
EPS Next 5Y1.55%
Revenue 1Y (TTM)4.71%
Revenue growth 3Y7.68%
Revenue growth 5Y7%
Sales Q2Q%6.49%
Revenue Next Year3.42%
Revenue Next 2Y3.59%
Revenue Next 3Y3.3%
Revenue Next 5Y3.19%
EBIT growth 1Y-21.53%
EBIT growth 3Y12.42%
EBIT growth 5Y11.34%
EBIT Next Year-7.45%
EBIT Next 3Y4.42%
EBIT Next 5Y5.01%
FCF growth 1Y8.78%
FCF growth 3Y6.4%
FCF growth 5Y5.9%
OCF growth 1Y-1.75%
OCF growth 3Y6.52%
OCF growth 5Y7.49%
HERSHEY CO/THE / HSY FAQ
What is the fundamental rating for HSY stock?
ChartMill assigns a fundamental rating of 6 / 10 to HSY.
What is the valuation status of HERSHEY CO/THE (HSY) stock?
ChartMill assigns a valuation rating of 4 / 10 to HERSHEY CO/THE (HSY). This can be considered as Fairly Valued.
What is the profitability of HSY stock?
HERSHEY CO/THE (HSY) has a profitability rating of 9 / 10.
What is the valuation of HERSHEY CO/THE based on its PE and PB ratios?
The Price/Earnings (PE) ratio for HERSHEY CO/THE (HSY) is 24.58 and the Price/Book (PB) ratio is 7.96.
What is the financial health of HERSHEY CO/THE (HSY) stock?
The financial health rating of HERSHEY CO/THE (HSY) is 6 / 10.