Hormel Foods Corporation
Hormel Foods Corporation Fundamental Analysis
Hormel Foods Corporation (HRL) shows weak financial fundamentals with a PE ratio of 24.85, profit margin of 4.03%, and ROE of 6.13%. The company generates $12.1B in annual revenue with weak year-over-year growth of 1.55%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 38.7/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze HRL's fundamental strength across five key dimensions:
Efficiency Score
WeakHRL struggles to generate sufficient returns from assets.
Valuation Score
ModerateHRL shows balanced valuation metrics.
Growth Score
WeakHRL faces weak or negative growth trends.
Financial Health Score
ExcellentHRL maintains a strong and stable balance sheet.
Profitability Score
WeakHRL struggles to sustain strong margins.
Key Financial Metrics
Is HRL Expensive or Cheap?
P/E Ratio
HRL trades at 24.85 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, HRL's PEG of 10.81 indicates potential overvaluation.
Price to Book
The market values Hormel Foods Corporation at 1.53 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 9.94 times EBITDA. This is generally considered low.
How Well Does HRL Make Money?
Net Profit Margin
For every $100 in sales, Hormel Foods Corporation keeps $4.03 as profit after all expenses.
Operating Margin
Core operations generate 6.04 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $6.13 in profit for every $100 of shareholder equity.
ROA
Hormel Foods Corporation generates $3.68 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Hormel Foods Corporation generates limited operating cash flow of $884.95M, signaling weaker underlying cash strength.
Free Cash Flow
Hormel Foods Corporation produces free cash flow of $577.33M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $1.05 in free cash annually.
FCF Yield
HRL converts 4.75% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
24.85
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
10.81
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.53
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.001
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.36
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.66
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.06
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.06
vs 25 benchmark
How HRL Stacks Against Its Sector Peers
| Metric | HRL Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 24.85 | 22.36 | Worse (Expensive) |
| ROE | 6.13% | 1238.00% | Weak |
| Net Margin | 4.03% | -5096.00% (disorted) | Weak |
| Debt/Equity | 0.36 | 1.23 | Strong (Low Leverage) |
| Current Ratio | 2.66 | 2.47 | Strong Liquidity |
| ROA | 3.68% | -191998.00% (disorted) | Weak |
HRL outperforms its industry in 2 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Hormel Foods Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
23.21%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
-48.50%
Industry Style: Defensive, Dividend, Low Volatility
DecliningFCF CAGR
-26.72%
Industry Style: Defensive, Dividend, Low Volatility
Declining