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. While HSY has a great profitability rating, 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
- In the past year HSY was profitable.
- In the past year HSY had a positive cash flow from operations.
- Each year in the past 5 years HSY has been profitable.
- 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 93.10% of its industry peers.
- HSY has a better Return On Equity (29.79%) than 97.70% of its industry peers.
- With an excellent Return On Invested Capital value of 16.48%, HSY belongs to the best of the industry, outperforming 94.25% 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 27.79%.
- 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
- HSY has a Profit Margin of 11.84%. This is amongst the best in the industry. HSY outperforms 93.10% 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 17.27%, HSY belongs to the top of the industry, outperforming 96.55% of the companies in the same industry.
- HSY's Operating Margin has improved in the last couple of years.
- HSY's Gross Margin of 37.74% is amongst the best of the industry. HSY outperforms 83.91% 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 | 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.
- With an excellent Altman-Z score value of 4.57, HSY belongs to the best of the industry, outperforming 83.91% 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.
- With an excellent Debt to FCF ratio value of 3.05, HSY belongs to the best 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
WACC8.25%
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 perfoms like the industry average, outperforming 40.23% of the companies in the same 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 has a Quick ratio of 0.83. This is comparable 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
- HSY shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -16.21%.
- 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.
- HSY shows a small growth in Revenue. In the last year, the Revenue has grown by 4.71%.
- 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
- Based on estimates for the next years, HSY will show a small growth in Earnings Per Share. The EPS will grow by 2.75% on average per year.
- Based on estimates for the next years, HSY will show a small growth in Revenue. The Revenue will grow by 3.41% on average per year.
EPS Next Y-35.44%
EPS Next 2Y-13.21%
EPS Next 3Y-4.44%
EPS Next 5Y2.75%
Revenue Next Year3.7%
Revenue Next 2Y3.68%
Revenue Next 3Y3.4%
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.
- 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 26.23 indicates a quite expensive valuation of HSY.
- HSY's Price/Earnings ratio is in line with the industry average.
- The average S&P500 Price/Earnings ratio is at 27.21. HSY is around the same levels.
- HSY is valuated quite expensively with a Price/Forward Earnings ratio of 27.09.
- HSY's Price/Forward Earnings is on the same level as the industry average.
- HSY's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.23 | ||
| Fwd PE | 27.09 |
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.
- 64.37% 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 | 21.93 | ||
| EV/EBITDA | 17.22 |
4.3 Compensation for Growth
- HSY has an outstanding profitability rating, which may justify a higher PE ratio.
- HSY's earnings are expected to decrease with -4.44% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)2.6
EPS Next 2Y-13.21%
EPS Next 3Y-4.44%
5. Dividend
5.1 Amount
- HSY has a Yearly Dividend Yield of 2.73%. Purely for dividend investing, there may be better candidates out there.
- HSY's Dividend Yield is a higher than the industry average which is at 2.28.
- Compared to an average S&P500 Dividend Yield of 1.82, HSY pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.73% |
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.
- HSY's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP79.75%
EPS Next 2Y-13.21%
EPS Next 3Y-4.44%
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 -35.44% in the next year.