HERSHEY CO/THE (HSY) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HSY - US4278661081 - Common Stock
186.75 USD
+0.95 (+0.51%)
186.91 USD
+0.16 (+0.09%)
We assign a fundamental rating of 6 out of 10 to HSY. HSY was compared to 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 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.
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
With an excellent Return On Assets value of 10.01%, HSY belongs to the best of the industry, outperforming 93.10% of the companies in the same industry.
HSY has a Return On Equity of 29.79%. This is amongst the best in the industry. HSY outperforms 95.40% of its industry peers.
HSY has a Return On Invested Capital of 16.48%. This is amongst the best in the industry. HSY outperforms 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 28.38%.
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
With an excellent Profit Margin value of 11.84%, HSY belongs to the best of the industry, outperforming 91.95% of the companies in the same industry.
HSY's Profit Margin has improved in the last couple of years.
HSY has a better Operating Margin (17.27%) than 95.40% of its industry peers.
In the last couple of years the Operating Margin of HSY has grown nicely.
With an excellent Gross Margin value of 37.74%, HSY belongs to the best of the industry, outperforming 87.36% of the companies in the same industry.
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), HSY is creating value.
Compared to 1 year ago, HSY has less shares outstanding
Compared to 5 years ago, HSY has less shares outstanding
Compared to 1 year ago, HSY has an improved debt to assets ratio.
2.2 Solvency
HSY has an Altman-Z score of 4.50. This indicates that HSY is financially healthy and has little risk of bankruptcy at the moment.
HSY's Altman-Z score of 4.50 is amongst the best of the industry. HSY outperforms 88.51% 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.
Looking at the Debt to FCF ratio, with a value of 3.05, HSY belongs to the top of the industry, outperforming 83.91% of the companies in the same industry.
HSY has a Debt/Equity ratio of 1.07. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.07, HSY is not doing good in the industry: 74.71% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.07 | ||
| Debt/FCF | 3.05 | ||
| Altman-Z | 4.5 |
ROIC/WACC2.05
WACC8.04%
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: 60.92% of the companies in the same industry are doing better.
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.
The Quick ratio of HSY (0.83) is comparable to the rest of the industry.
| 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.
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 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
The Earnings Per Share is expected to grow by 1.55% on average over the next years.
HSY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.19% yearly.
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
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
A Price/Earnings ratio of 25.62 indicates a quite expensive valuation of HSY.
HSY's Price/Earnings is on the same level as the industry average.
HSY's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.98.
With a Price/Forward Earnings ratio of 27.05, HSY can be considered very expensive at the moment.
The rest of the industry has a similar Price/Forward Earnings ratio as HSY.
HSY is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 35.79, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.62 | ||
| Fwd PE | 27.05 |
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 63.22% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.42 | ||
| EV/EBITDA | 16.82 |
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)2.53
EPS Next 2Y-14.17%
EPS Next 3Y-4.79%
5. Dividend
5.1 Amount
HSY has a Yearly Dividend Yield of 3.00%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 5.20, HSY pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.41, HSY pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3% |
5.2 History
The dividend of HSY is nicely growing with an annual growth rate of 12.83%!
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
79.75% 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.
DP79.75%
EPS Next 2Y-14.17%
EPS Next 3Y-4.79%
186.75
+0.95 (+0.51%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners92.52%
Inst Owner Change-0.27%
Ins Owners0.2%
Ins Owner Change1.01%
Market Cap37.86B
Revenue(TTM)11.49B
Net Income(TTM)1.36B
Analysts65.71
Price Target191.2 (2.38%)
Short Float %4.9%
Short Ratio4.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3% |
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)-0.47%
PT rev (3m)1.97%
EPS NQ rev (1m)-12.39%
EPS NQ rev (3m)-11.47%
EPS NY rev (1m)0.37%
EPS NY rev (3m)0.67%
Revenue NQ rev (1m)-0.4%
Revenue NQ rev (3m)-0.17%
Revenue NY rev (1m)0.33%
Revenue NY rev (3m)0.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.62 | ||
| Fwd PE | 27.05 | ||
| P/S | 3.3 | ||
| P/FCF | 21.42 | ||
| P/OCF | 16.51 | ||
| P/B | 8.29 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.82 |
EPS(TTM)7.29
EY3.9%
EPS(NY)6.9
Fwd EY3.7%
FCF(TTM)8.72
FCFY4.67%
OCF(TTM)11.31
OCFY6.06%
SpS56.67
BVpS22.52
TBVpS-1.9
PEG (NY)N/A
PEG (5Y)2.53
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 | 4.5 |
F-Score4
WACC8.04%
ROIC/WACC2.05
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 25.62 and the Price/Book (PB) ratio is 8.29.
What is the financial health of HERSHEY CO/THE (HSY) stock?
The financial health rating of HERSHEY CO/THE (HSY) is 6 / 10.