HERSHEY CO/THE (HSY) Stock Fundamental Analysis
USA - NYSE:HSY - US4278661081 - Common Stock
191.6 USD
+2.17 (+1.15%)
191.6 USD
0 (0%)
Taking everything into account, HSY scores 6 out of 10 in our fundamental rating. HSY was compared to 87 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 expensive and 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.
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's Return On Assets of 11.21% is amongst the best of the industry. HSY outperforms 93.10% of its industry peers.
The Return On Equity of HSY (33.89%) is better than 98.85% of its industry peers.
HSY has a better Return On Invested Capital (17.69%) than 95.40% of its industry peers.
HSY had an Average Return On Invested Capital over the past 3 years of 23.99%. This is below the industry average of 28.34%.
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
HSY has a better Profit Margin (13.54%) 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 19.49%, HSY belongs to the top of the industry, outperforming 95.40% of the companies in the same industry.
In the last couple of years the Operating Margin of HSY has grown nicely.
HSY has a Gross Margin of 40.13%. This is amongst the best in the industry. HSY outperforms 90.80% 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
HSY has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it 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 4.58. This indicates that HSY is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.58, HSY belongs to the top of the industry, outperforming 87.36% of the companies in the same industry.
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 has a Debt to FCF ratio of 3.57. This is amongst the best in the industry. HSY outperforms 80.46% 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.
HSY's Debt to Equity ratio of 1.18 is on the low side compared to the rest of the industry. HSY is outperformed by 75.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.18 | ||
| Debt/FCF | 3.57 | ||
| Altman-Z | 4.58 |
ROIC/WACC2.2
WACC8.05%
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.
The Current ratio of HSY (1.53) 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.
The Quick ratio of HSY (0.89) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.53 | ||
| Quick Ratio | 0.89 |
3. Growth
3.1 Past
HSY shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -7.03%.
The Earnings Per Share has been growing by 10.11% on average over the past years. This is quite good.
The Revenue has been growing slightly by 2.55% in the past year.
HSY shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.00% yearly.
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
Based on estimates for the next years, HSY will show a small growth in Earnings Per Share. The EPS will grow by 3.40% on average per year.
HSY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.26% yearly.
EPS Next Y-35.94%
EPS Next 2Y-14.08%
EPS Next 3Y-4.93%
EPS Next 5Y3.4%
Revenue Next Year3.05%
Revenue Next 2Y3.51%
Revenue Next 3Y3.2%
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.
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
The Price/Earnings ratio is 23.00, which indicates a rather expensive current valuation of HSY.
HSY's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of HSY to the average of the S&P500 Index (27.55), we can say HSY is valued inline with the index average.
The Price/Forward Earnings ratio is 27.70, which means the current valuation is very expensive for HSY.
The rest of the industry has a similar Price/Forward Earnings ratio as HSY.
HSY is valuated rather expensively when we compare the Price/Forward Earnings ratio to 23.04, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23 | ||
| Fwd PE | 27.7 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as HSY.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of HSY indicates a somewhat cheap valuation: HSY is cheaper than 64.37% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.6 | ||
| EV/EBITDA | 16.02 |
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 -4.93% in the coming years.
PEG (NY)N/A
PEG (5Y)2.28
EPS Next 2Y-14.08%
EPS Next 3Y-4.93%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.85%, HSY has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 5.05, HSY pays a bit more dividend than its industry peers.
HSY's Dividend Yield is comparable with the S&P500 average which is at 2.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.85% |
5.2 History
The dividend of HSY is nicely growing with an annual growth rate of 12.83%!
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
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-14.08%
EPS Next 3Y-4.93%
191.6
+2.17 (+1.15%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners92.52%
Inst Owner Change-0.01%
Ins Owners0.2%
Ins Owner Change1.27%
Market Cap38.84B
Analysts65
Price Target192.1 (0.26%)
Short Float %6.14%
Short Ratio5.91
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.85% |
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)2.45%
PT rev (3m)15.07%
EPS NQ rev (1m)0.63%
EPS NQ rev (3m)-25.34%
EPS NY rev (1m)0.23%
EPS NY rev (3m)0.13%
Revenue NQ rev (1m)0.19%
Revenue NQ rev (3m)-0.6%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)0.52%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23 | ||
| Fwd PE | 27.7 | ||
| P/S | 3.44 | ||
| P/FCF | 24.6 | ||
| P/OCF | 18.1 | ||
| P/B | 8.6 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.02 |
EPS(TTM)8.33
EY4.35%
EPS(NY)6.92
Fwd EY3.61%
FCF(TTM)7.79
FCFY4.07%
OCF(TTM)10.58
OCFY5.52%
SpS55.72
BVpS22.27
TBVpS-2.3
PEG (NY)N/A
PEG (5Y)2.28
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 | 4.58 |
F-Score4
WACC8.05%
ROIC/WACC2.2
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-35.94%
EPS Next 2Y-14.08%
EPS Next 3Y-4.93%
EPS Next 5Y3.4%
Revenue 1Y (TTM)2.55%
Revenue growth 3Y7.68%
Revenue growth 5Y7%
Sales Q2Q%26.04%
Revenue Next Year3.05%
Revenue Next 2Y3.51%
Revenue Next 3Y3.2%
Revenue Next 5Y3.26%
EBIT growth 1Y-15.39%
EBIT growth 3Y12.42%
EBIT growth 5Y11.34%
EBIT Next Year-7.45%
EBIT Next 3Y4.42%
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%