NYSE:HSY

Stock Analysis Report

Executive Summary

The Hershey Company, together with its subsidiaries, manufactures and sells confectionery products.

Rewards

Trading at 15.9% below its fair value

Earnings are forecast to grow 5.99% per year

Earnings grew by 25.2% over the past year

Pays a high and reliable dividend of 2.08%

Risk Analysis

Has a high level of debt



Snowflake Analysis

Solid track record established dividend payer.


Similar Companies

Sanderson Farms

NasdaqGS:SAFM

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-0.4%

HSY

-1.8%

US Food

-1.5%

US Market


1 Year Return

44.9%

HSY

12.7%

US Food

21.7%

US Market

Return vs Industry: HSY exceeded the US Food industry which returned 13.9% over the past year.

Return vs Market: HSY exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

HSYIndustryMarket
7 Day-0.4%-1.8%-1.5%
30 Day3.1%-1.8%1.4%
90 Day4.3%4.3%7.9%
1 Year48.2%44.9%15.9%12.7%24.3%21.7%
3 Year55.3%44.3%0.07%-7.9%49.5%39.9%
5 Year64.2%45.4%42.0%25.3%72.6%53.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

13.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HSY ($148.83) is trading below our estimate of fair value ($176.94)

Significantly Below Fair Value: HSY is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: HSY is good value based on its PE Ratio (24.4x) compared to the Food industry average (25.4x).

PE vs Market: HSY is poor value based on its PE Ratio (24.4x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: HSY is poor value based on its PEG Ratio (4.1x)


Price to Book Ratio

PB vs Industry: HSY is overvalued based on its PB Ratio (17.8x) compared to the US Food industry average (2.1x).


Next Steps

Future Growth

How is Hershey forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

5.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HSY's forecast earnings growth (6% per year) is above the savings rate (1.7%).

Earnings vs Market: HSY's earnings (6% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: HSY's revenue (2.1% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: HSY's revenue (2.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HSY's Return on Equity is forecast to be very high in 3 years time (61.5%).


Next Steps

Past Performance

How has Hershey performed over the past 5 years?

13.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HSY has high quality earnings.

Growing Profit Margin: HSY's current net profit margins (16.2%) are higher than last year (13.2%).


Past Earnings Growth Analysis

Earnings Trend: HSY's earnings have grown by 13.7% per year over the past 5 years.

Accelerating Growth: HSY's earnings growth over the past year (25.2%) exceeds its 5-year average (13.7% per year).

Earnings vs Industry: HSY earnings growth over the past year (25.2%) exceeded the Food industry -12.1%.


Return on Equity

High ROE: Whilst HSY's Return on Equity (72.32%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Hershey's financial position?


Financial Position Analysis

Short Term Liabilities: HSY's short term assets ($2.4B) do not cover its short term liabilities ($3.0B).

Long Term Liabilities: HSY's short term assets ($2.4B) do not cover its long term liabilities ($3.7B).


Debt to Equity History and Analysis

Debt Level: HSY's debt to equity ratio (252.2%) is considered high.

Reducing Debt: HSY's debt to equity ratio has increased from 152.9% to 252.2% over the past 5 years.

Debt Coverage: HSY's debt is well covered by operating cash flow (38.3%).

Interest Coverage: HSY's interest payments on its debt are well covered by EBIT (12.2x coverage).


Balance Sheet

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

Debt Coverage by Assets: HSY's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

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

2.03%

Current Dividend Yield


Dividend Yield vs Market

company2.0%marketbottom25%1.4%markettop25%3.7%industryaverage2.7%forecastin3Years2.2%

Current dividend yield vs market & industry

Notable Dividend: HSY's dividend (2.08%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: HSY's dividend (2.08%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (48.2%), HSY's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HSY's dividends in 3 years are forecast to be covered by earnings (52.6% payout ratio).


Next Steps

Management

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

2.8yrs

Average management tenure


CEO

Michele Buck (57yo)

2.8yrs

Tenure

US$11,718,372

Compensation

Ms. Michele Gross Buck has been the Chairman at The Hershey Company since October 14, 2019 and its Chief Executive Officer and President since March 1, 2017. Ms. Buck is responsible for all day-to-day glob ...


CEO Compensation Analysis

Compensation vs Market: Michele's total compensation ($USD11.72M) is about average for companies of similar size in the US market ($USD10.76M).

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


Management Age and Tenure

2.8yrs

Average Tenure

55yo

Average Age

Experienced Management: HSY's management team is considered experienced (2.8 years average tenure).


Board Age and Tenure

4.5yrs

Average Tenure

65.5yo

Average Age

Experienced Board: HSY's board of directors are considered experienced (4.5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$986,40915 Nov 19
Milton Hershey School Trust
EntityCompany
Shares6,800
Max PriceUS$145.06
SellUS$490,97028 Aug 19
Milton Hershey School Trust
EntityCompany
Shares3,100
Max PriceUS$158.38
SellUS$918,27005 Aug 19
Milton Hershey School Trust
EntityCompany
Shares6,000
Max PriceUS$153.05
SellUS$1,528,15401 Aug 19
Milton Hershey School Trust
EntityCompany
Shares10,000
Max PriceUS$152.82
BuyUS$129,14031 May 19
Steven Voskuil
EntityIndividual
Role
Chief Financial Officer
Senior VP
Shares1,000
Max PriceUS$129.14
BuyUS$13,01031 May 19
Damien Atkins
EntityIndividual
Role
Chief Legal Officer
Senior VP
Shares100
Max PriceUS$130.10
BuyUS$259,84030 May 19
Todd Tillemans
EntityIndividual
Shares2,000
Max PriceUS$129.92
SellUS$652,15024 May 19
Anthony Palmer
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,000
Max PriceUS$130.43
SellUS$79,20826 Feb 19
Patricia Little
EntityIndividual
Shares724
Max PriceUS$109.40

Ownership Breakdown

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


Management Team

  • Mary Beth Elizabeth West (56yo)

    Transitional Executive Officer

    • Tenure: 2.7yrs
  • Michele Buck (57yo)

    Chairman

    • Tenure: 2.8yrs
    • Compensation: US$11.72m
  • Kevin Walling (54yo)

    Senior VP of Corporate Communications & Corporate Social Responsibility

    • Tenure: 8.2yrs
    • Compensation: US$3.46m
  • Terry O'Day (69yo)

    Senior VP

    • Tenure: 2.7yrs
    • Compensation: US$2.42m
  • Steven Schiller

    President of International

    • Tenure: 2.8yrs
  • Steve Voskuil (51yo)

    Senior VP

    • Tenure: 0.7yrs
  • Damien Atkins (48yo)

    Senior VP

    • Tenure: 1.4yrs
  • Rob Gehring

    Global Chief Sales Officer

    • Tenure: 4yrs
  • Melissa Poole

    Vice President of Investor Relations

    • Chris Scalia

      Senior VP & Chief Human Resources Officer


      Board Members

      • James Brown (67yo)

        Independent Director

        • Tenure: 2.7yrs
        • Compensation: US$260.00k
      • David Shedlarz (71yo)

        Independent Director

        • Tenure: 11.4yrs
        • Compensation: US$275.00k
      • Chuck Davis (71yo)

        Lead Independent Director

        • Tenure: 0.3yrs
        • Compensation: US$367.76k
      • Rob Malcolm (67yo)

        Independent Director

        • Tenure: 8.1yrs
        • Compensation: US$275.00k
      • Mary Haben (63yo)

        Independent Director

        • Tenure: 6.4yrs
        • Compensation: US$275.00k
      • Tony Palmer (59yo)

        Independent Director

        • Tenure: 8.8yrs
        • Compensation: US$269.93k
      • Michele Buck (57yo)

        Chairman

        • Tenure: 2.8yrs
        • Compensation: US$11.72m
      • Wendy Schoppert (53yo)

        Independent Director

        • Tenure: 2.1yrs
        • Compensation: US$271.01k
      • Pamela Arway (65yo)

        Independent Director

        • Tenure: 9.7yrs
        • Compensation: US$260.00k
      • Mary Koken (66yo)

        Independent Director

        • Tenure: 2.7yrs
        • Compensation: US$255.50k

      Company Information

      The Hershey Company's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: The Hershey Company
      • Ticker: HSY
      • Exchange: NYSE
      • Founded: 1894
      • Industry: Packaged Foods and Meats
      • Sector: Food, Beverage & Tobacco
      • Market Cap: US$31.796b
      • Shares outstanding: 208.92m
      • Website: https://www.thehersheycompany.com

      Number of Employees


      Location

      • The Hershey Company
      • 100 Crystal A Drive
      • Hershey
      • Pennsylvania
      • 17033
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      HSYNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
      HSYDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
      0J4XLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
      HSY *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
      HSHY34BOVESPA (Bolsa de Valores de Sao Paulo)BDR REPR 1/5 COM USD1.00BRBRLJul 2015

      Biography

      The Hershey Company, together with its subsidiaries, manufactures and sells confectionery products. The company operates through two segments, North America; and International and Other. It offers chocolate and non-chocolate confectionery products; gum and mint refreshment products comprising mints, chewing gums, and bubble gums; pantry items, such as baking ingredients, toppings, beverages, and sundae syrups; and snack items, including spreads, meat snacks, bars and snack bites, mixes, popcorn and protein bars, and cookies. The company provides its products primarily under the Hershey’s, Reese’s, Kisses, Jolly Rancher, Almond Joy, Brookside, barkTHINS, Cadbury, Good & Plenty, Heath, Kit Kat, Lancaster, Payday, Rolo, Twizzlers, Whoppers, York, Scharffen Berger, Dagoba, Ice Breakers, Breathsavers, and Bubble Yum brands, as well as under the Krave, Popwell, SkinnyPop, Pirate's Boot, Oatmega, Paqui, Pelon Pelo Rico, IO-IO, Nutrine, Maha Lacto, Jumpin, Sofit, and Tyrrells brands. It markets and sells its products to wholesale distributors, chain grocery stores, mass merchandisers, chain drug stores, vending companies, wholesale clubs, convenience stores, dollar stores, concessionaires, and department stores. The Hershey Company was founded in 1894 and is headquartered in Hershey, Pennsylvania. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/28 23:40
      End of Day Share Price2020/01/28 00:00
      Earnings2019/09/29
      Annual Earnings2018/12/31


      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.