NYSE:HRL

Stock Analysis Report

Executive Summary

Hormel Foods Corporation produces and markets various meat and food products to retail, foodservice, deli, and commercial customers in the United States and internationally.

Rewards

Earnings are forecast to grow 2.26% per year

Pays a high and reliable dividend of 2.07%

Risk Analysis

No risks detected for HRL from our risk checks.


Snowflake Analysis

Flawless balance sheet established dividend payer.


Similar Companies

Share Price & News

How has Hormel Foods's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: HRL has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.0%

HRL

-0.9%

US Food

0.6%

US Market


1 Year Return

0.7%

HRL

10.1%

US Food

20.8%

US Market

Return vs Industry: HRL underperformed the US Food industry which returned 10.1% over the past year.

Return vs Market: HRL underperformed the US Market which returned 20.8% over the past year.


Shareholder returns

HRLIndustryMarket
7 Day-1.0%-0.9%0.6%
30 Day6.5%1.4%2.5%
90 Day4.5%0.1%4.9%
1 Year2.8%0.7%13.2%10.1%23.5%20.8%
3 Year37.8%29.7%0.03%-7.9%46.5%37.0%
5 Year88.6%71.8%37.4%20.7%64.6%46.5%

Price Volatility Vs. Market

How volatile is Hormel Foods's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Hormel Foods undervalued compared to its fair value and its price relative to the market?

24.52x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: HRL ($44.9) is trading above our estimate of fair value ($22.64)

Significantly Below Fair Value: HRL is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: HRL is poor value based on its PE Ratio (24.5x) compared to the Food industry average (24.1x).

PE vs Market: HRL is poor value based on its PE Ratio (24.5x) compared to the US market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: HRL is poor value based on its PEG Ratio (10.9x)


Price to Book Ratio

PB vs Industry: HRL is overvalued based on its PB Ratio (4x) compared to the US Food industry average (2.2x).


Next Steps

Future Growth

How is Hormel Foods forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

2.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HRL's forecast earnings growth (2.3% per year) is above the savings rate (1.7%).

Earnings vs Market: HRL's earnings (2.3% per year) are forecast to grow slower than the US market (14.4% per year).

High Growth Earnings: HRL's earnings are forecast to grow, but not significantly.

Revenue vs Market: HRL's revenue (2.6% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: HRL's revenue (2.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HRL's Return on Equity is forecast to be low in 3 years time (15.2%).


Next Steps

Past Performance

How has Hormel Foods performed over the past 5 years?

9.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HRL has high quality earnings.

Growing Profit Margin: HRL's current net profit margins (10.3%) are lower than last year (10.6%).


Past Earnings Growth Analysis

Earnings Trend: HRL's earnings have grown by 9.5% per year over the past 5 years.

Accelerating Growth: HRL's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: HRL had negative earnings growth (-3.2%) over the past year, making it difficult to compare to the Food industry average (-16%).


Return on Equity

High ROE: HRL's Return on Equity (16.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Hormel Foods's financial position?


Financial Position Analysis

Short Term Liabilities: HRL's short term assets ($2.4B) exceed its short term liabilities ($1.1B).

Long Term Liabilities: HRL's short term assets ($2.4B) exceed its long term liabilities ($1.1B).


Debt to Equity History and Analysis

Debt Level: HRL's debt to equity ratio (4.2%) is considered satisfactory.

Reducing Debt: HRL's debt to equity ratio has reduced from 6.9% to 4.2% over the past 5 years.

Debt Coverage: HRL's debt is well covered by operating cash flow (369.2%).

Interest Coverage: HRL earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: HRL has a high level of physical assets or inventory.

Debt Coverage by Assets: HRL's debt is covered by short term assets (assets are 9.4x debt).


Next Steps

Dividend

What is Hormel Foods's current dividend yield, its reliability and sustainability?

2.07%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Hormel Foods before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company2.1%marketbottom25%1.4%markettop25%3.7%industryaverage2.8%forecastin3Years2.2%

Current dividend yield vs market & industry

Notable Dividend: HRL's dividend (2.07%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: HRL's dividend (2.07%) is low compared to the top 25% of dividend payers in the US market (3.71%).


Stability and Growth of Payments

Stable Dividend: HRL's dividends per share have been stable in the past 10 years.

Growing Dividend: HRL's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (45.9%), HRL's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HRL's dividends in 3 years are forecast to be covered by earnings (54.1% payout ratio).


Next Steps

Management

What is the CEO of Hormel Foods's salary, the management and board of directors tenure and is there insider trading?

4.0yrs

Average management tenure


CEO

Jim Snee (52yo)

3.2yrs

Tenure

US$6,353,255

Compensation

Mr. James P. Snee, also known as Jim, has been the Chief Executive Officer of Hormel Foods Corporation from October 31, 2016 to November 19, 2017 and its President from October 26, 2015 to November 19, 201 ...


CEO Compensation Analysis

Compensation vs Market: Jim's total compensation ($USD6.35M) is below average for companies of similar size in the US market ($USD10.94M).

Compensation vs Earnings: Jim's compensation has been consistent with company performance over the past year.


Management Age and Tenure

4.0yrs

Average Tenure

57yo

Average Age

Experienced Management: HRL's management team is considered experienced (4 years average tenure).


Board Age and Tenure

9.2yrs

Average Tenure

62yo

Average Age

Experienced Board: HRL's board of directors are considered experienced (9.2 years average tenure).


Insider Trading

Insider Buying: HRL insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$495,89904 Dec 19
Lori Marco
EntityIndividual
Role
Chief Legal Officer
Senior VP of External Affairs & General Counsel
Shares11,000
Max PriceUS$45.08
SellUS$136,52209 Oct 19
Glenn Forbes
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,128
Max PriceUS$43.65
SellUS$146,29107 Oct 19
Robert Nakasone
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,363
Max PriceUS$43.50
SellUS$171,39020 Sep 19
Robert Nakasone
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,940
Max PriceUS$43.50
SellUS$170,39618 Sep 19
Robert Nakasone
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,962
Max PriceUS$43.01
SellUS$598,19506 Jun 19
Robert Nakasone
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares14,695
Max PriceUS$41.00
SellUS$161,17905 Jun 19
Dakota Pippins
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares4,000
Max PriceUS$40.29
SellUS$284,49505 Jun 19
Elsa Murano
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares7,000
Max PriceUS$40.64
SellUS$718,00004 Jun 19
Robert Nakasone
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares18,000
Max PriceUS$40.00
SellUS$251,43508 Apr 19
Thomas Day
EntityIndividual
Role
Senior Key Executive
Executive Vice President of Refrigerated Foods
Shares6,000
Max PriceUS$41.91
SellUS$443,30228 Mar 19
Susan Nestegard
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceUS$44.33
SellUS$201,88507 Mar 19
Glenn Forbes
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares4,695
Max PriceUS$43.00

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Jim Sheehan (64yo)

    Executive VP & CFO

    • Tenure: 3.2yrs
    • Compensation: US$1.92m
  • Tom Day (61yo)

    Executive Vice President of Refrigerated Foods

    • Tenure: 1.8yrs
    • Compensation: US$2.03m
  • Jim Splinter (57yo)

    Group Vice President of Corporate Strategy

    • Tenure: 16.5yrs
    • Compensation: US$1.61m
  • Wendy Watkins

    Vice President of Corporate Communications

    • Tenure: 4.8yrs
  • Fred Halvin

    Vice President of Corporate Development

    • Tenure: 7.2yrs
  • Jim Snee (52yo)

    Chairman

    • Tenure: 3.2yrs
    • Compensation: US$6.35m
  • Lori Marco (52yo)

    Senior VP of External Affairs & General Counsel

    • Tenure: 8.9yrs
  • Glenn Leitch (59yo)

    Executive Vice President of Supply Chain

    • Tenure: 2yrs
    • Compensation: US$1.82m
  • Jana Haynes (47yo)

    VP & Controller

    • Tenure: 0yrs
  • Nathan Annis

    Director of Investor Relations

    • Tenure: 0yrs

Board Members

  • Steve Lacy (65yo)

    Independent Director

    • Tenure: 8.3yrs
    • Compensation: US$269.51k
  • Terry Crews (64yo)

    Independent Director

    • Tenure: 12.2yrs
    • Compensation: US$261.53k
  • Robert Nakasone (71yo)

    Independent Director

    • Tenure: 13.3yrs
    • Compensation: US$288.23k
  • Dakota Pippins (71yo)

    Independent Director

    • Tenure: 18.9yrs
    • Compensation: US$254.28k
  • Susan Nestegard (59yo)

    Independent Director

    • Tenure: 10.2yrs
    • Compensation: US$247.39k
  • Chris Policinski (60yo)

    Lead Director

    • Tenure: 3.3yrs
    • Compensation: US$277.78k
  • Gary Bhojwani (51yo)

    Independent Director

    • Tenure: 5.4yrs
    • Compensation: US$244.01k
  • Elsa Murano (60yo)

    Independent Director

    • Tenure: 13.3yrs
    • Compensation: US$236.51k
  • Glenn Forbes (72yo)

    Independent Director

    • Tenure: 8.3yrs
    • Compensation: US$238.36k
  • Jim Snee (52yo)

    Chairman

    • Tenure: 3.2yrs
    • Compensation: US$6.35m

Company Information

Hormel Foods Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Hormel Foods Corporation
  • Ticker: HRL
  • Exchange: NYSE
  • Founded: 1891
  • Industry: Packaged Foods and Meats
  • Sector: Food, Beverage & Tobacco
  • Market Cap: US$24.250b
  • Shares outstanding: 534.74m
  • Website: https://www.hormelfoods.com

Number of Employees


Location

  • Hormel Foods Corporation
  • 1 Hormel Place
  • Austin
  • Minnesota
  • 55912
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HRLNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
HO7DB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
0J5ZLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
HRLWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968

Biography

Hormel Foods Corporation produces and markets various meat and food products to retail, foodservice, deli, and commercial customers in the United States and internationally. The company operates through fo ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/13 23:39
End of Day Share Price2019/12/13 00:00
Earnings2019/10/27
Annual Earnings2019/10/27


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.