The Hershey Co

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HSY : NYSE : Consumer Goods
$107.98 | %
Today's Range: 107.48 - 108.62
Avg. Daily Volume: 1035100.0
03/24/17 - 4:02 PM ET

Financial Analysis


HERSHEY CO's gross profit margin for the fourth quarter of its fiscal year 2016 has decreased when compared to the same period a year ago. Even though sales increased, the net income has decreased. HERSHEY CO has very weak liquidity. Currently, the Quick Ratio is 0.46 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has decreased by 21.25% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)1970.241909.22
EBITDA ($mil)296.29438.24
EBIT ($mil)236.36370.27
Net Income ($mil)116.85213.38


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)296.97346.53
Total Assets ($mil)5524.335344.37
Total Debt ($mil)2980.172420.53
Equity ($mil)785.86998.0


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin40.7248.55
EBITDA Margin15.0322.95
Operating Margin12.019.39
Sales Turnover1.351.38
Return on Assets13.039.59
Return on Equity91.6251.39
Debt Q4 FY16 Q4 FY15
Current Ratio0.950.83
Debt/Capital0.790.71
Interest Expense25.4523.08
Interest Coverage9.2916.04


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)212.26216.78
Div / share0.620.58
EPS0.550.98
Book value / share3.74.6
Institutional Own % n/a n/a
Avg Daily Volume1014958.01189211.0

Valuation


BUY. HERSHEY CO's P/E ratio indicates a premium compared to an average of 31.49 for the Food Products industry and a premium compared to the S&P 500 average of 26.33. For additional comparison, its price-to-book ratio of 29.20 indicates a significant premium versus the S&P 500 average of 2.93 and a significant premium versus the industry average of 5.11. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, HERSHEY CO proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
HSY 32.27 Peers 31.49   HSY 23.33 Peers 18.83

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

HSY is trading at a valuation on par with its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

HSY is trading at a premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
HSY 20.87 Peers 20.87   HSY 0.75 Peers 1.71

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

HSY is trading at a valuation on par with its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

HSY trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
HSY 29.20 Peers 5.11   HSY 45.02 Peers 1487.20

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

HSY is trading at a significant premium to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, HSY is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
HSY 3.08 Peers 2.40   HSY 0.72 Peers 8.16

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

HSY is trading at a significant premium to its industry.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

HSY significantly trails its peers on the basis of sales growth

 

 

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