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%)
Overall HSY gets a fundamental rating of 6 out of 10. We evaluated HSY against 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 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.
- HSY had a positive operating cash flow in the past year.
- In the past 5 years HSY has always been profitable.
- In the past 5 years HSY always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 10.01%, HSY belongs to the top of the industry, outperforming 93.10% of the companies in the same industry.
- HSY's Return On Equity of 29.79% is amongst the best of the industry. HSY outperforms 97.70% of its industry peers.
- The Return On Invested Capital of HSY (16.48%) is better than 94.25% 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 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's Profit Margin of 11.84% is amongst the best of the industry. HSY outperforms 93.10% of its industry peers.
- In the last couple of years the Profit Margin of HSY has grown nicely.
- HSY has a Operating Margin of 17.27%. This is amongst the best in the industry. HSY outperforms 96.55% of its industry peers.
- 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 83.91% 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
- 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.
- The number of shares outstanding for HSY has been reduced compared to 5 years ago.
- 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.
- Looking at the Altman-Z score, with a value of 4.57, HSY belongs to the top of the industry, outperforming 85.06% of the companies in the same industry.
- 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.
- Looking at the Debt to FCF ratio, with a value of 3.05, HSY belongs to the top of the industry, outperforming 82.76% of the companies in the same industry.
- A Debt/Equity ratio of 1.07 is on the high side and indicates that HSY has dependencies on debt financing.
- HSY has a Debt to Equity ratio of 1.07. This is in the lower half of the industry: HSY underperforms 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.
- HSY has a Quick Ratio of 1.36. 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's Quick ratio of 0.83 is in line compared to the rest of the industry. HSY outperforms 44.83% of its industry peers.
| 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.
- 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.
- The Revenue has been growing slightly by 4.71% in the past year.
- 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)-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
- The Earnings Per Share is expected to grow by 2.75% on average over the next years.
- The Revenue is expected to grow by 3.41% on average over the next years.
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.
- 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
- Based on the Price/Earnings ratio of 26.23, the valuation of HSY can be described as expensive.
- HSY's Price/Earnings ratio is in line with the industry average.
- 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.
- With a Price/Forward Earnings ratio of 26.78, HSY can be considered very expensive at the moment.
- HSY's Price/Forward Earnings ratio is in line with the industry average.
- HSY is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.26, 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.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of HSY indicates a somewhat cheap valuation: HSY is cheaper than 63.22% of the companies listed 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
- With a Yearly Dividend Yield of 2.87%, HSY has a reasonable but not impressive dividend return.
- HSY's Dividend Yield is a higher than the industry average which is at 2.29.
- 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 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.
- 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.