HERSHEY CO/THE (HSY) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HSY - US4278661081 - Common Stock
192 USD
+0.37 (+0.19%)
192 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 has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
- HSY had positive earnings in the past year.
- In the past year HSY had a positive cash flow from operations.
- In the past 5 years HSY has always 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 10.01% is amongst the best of the industry. HSY outperforms 93.10% of its industry peers.
- 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.
- 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
- The Profit Margin of HSY (11.84%) is better than 93.10% of its industry peers.
- In the last couple of years the Profit Margin of HSY has grown nicely.
- HSY has a better Operating Margin (17.27%) than 96.55% of its industry peers.
- HSY's Operating Margin has improved in the last couple of years.
- 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
- 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.
- Compared to 5 years ago, HSY has less shares outstanding
- HSY has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 4.58 indicates that HSY is not in any danger for bankruptcy at the moment.
- The Altman-Z score of HSY (4.58) is better than 85.06% of its industry peers.
- The Debt to FCF ratio of HSY is 3.05, which is a good value as it means it would take HSY, 3.05 years of fcf income to pay off all of its debts.
- HSY has a Debt to FCF ratio of 3.05. This is amongst the best in the industry. HSY outperforms 82.76% of its industry peers.
- HSY has a Debt/Equity ratio of 1.07. This is a high value indicating a heavy dependency on external financing.
- Looking at the Debt to Equity ratio, with a value of 1.07, HSY is doing worse than 72.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.07 | ||
| Debt/FCF | 3.05 | ||
| Altman-Z | 4.58 |
ROIC/WACC2
WACC8.24%
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.
- HSY's Current ratio of 1.36 is in line compared to the rest of the industry. HSY outperforms 40.23% of its industry peers.
- A Quick Ratio of 0.83 indicates that HSY may have some problems paying its short term obligations.
- HSY has a Quick ratio (0.83) which is in line with 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%.
- 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.
- 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
- HSY is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 2.75% yearly.
- 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.
- 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 26.34, which means the current valuation is very expensive for HSY.
- HSY's Price/Earnings is on the same level as the industry average.
- Compared to an average S&P500 Price/Earnings ratio of 28.60, HSY is valued at the same level.
- HSY is valuated quite expensively with a Price/Forward Earnings ratio of 26.89.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of HSY is on the same level as its industry peers.
- When comparing the Price/Forward Earnings ratio of HSY to the average of the S&P500 Index (25.83), we can say HSY is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.34 | ||
| Fwd PE | 26.89 |
4.2 Price Multiples
- HSY's Enterprise Value to EBITDA ratio is in line with the industry average.
- HSY's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. HSY is cheaper than 64.37% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.03 | ||
| EV/EBITDA | 17.3 |
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 -3.89% in the coming years.
PEG (NY)N/A
PEG (5Y)2.61
EPS Next 2Y-12.7%
EPS Next 3Y-3.89%
5. Dividend
5.1 Amount
- HSY has a Yearly Dividend Yield of 2.87%. 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 2.29.
- HSY's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.87% |
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 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 26.34 and the Price/Book (PB) ratio is 8.53.
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.