Hormel Foods Corp
Exchange: NYSESector: Consumer DefensiveIndustry: Packaged Foods
Hormel Foods Corporation, based in Austin, Minnesota, is a global branded food company with over $12 billion in annual revenue. Its brands include Planters ®, Skippy ®, SPAM ®, Hormel ® Natural Choice ®, Applegate ®, Wholly ®, Hormel ® Black Label ®, Columbus ®, Jennie-O ® and more than 30 other beloved brands. The Company is a member of the S&P 500 Index and the S&P 500 Dividend Aristocrats, was named one of the best companies to work for by U.S. News & World Report and one of America's most responsible companies by Newsweek, was recognized by TIME magazine as one of the World's Best Companies and has received numerous other awards and accolades for its corporate responsibility and community service efforts.
Current Price
$20.96
+0.34%GoodMoat Value
$28.45
35.7% undervaluedProfile
Valuation (TTM)
Market Cap$11.53B
P/E23.56
EV$14.29B
P/B1.46
Shares Out550.11M
P/Sales0.95
Revenue$12.14B
EV/EBITDA12.64
Hormel Foods Corp (HRL) Stock Analysis
GoodMoat Analysis
Hormel Foods is a stable, dividend-paying packaged foods company with a moderate competitive moat, but its current valuation appears full relative to its low-growth financial profile. The analysis suggests it is a borderline candidate for further investigation, requiring careful consideration of its growth prospects.
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Hormel Foods is a major player in the consumer defensive sector, producing and marketing a wide range of branded packaged foods, including shelf-stable items, refrigerated products, and meats. Applying the GoodMoat framework, the company demonstrates a moderate competitive moat, likely scoring in the 5-6 range based on its strong brand portfolio (e.g., SPAM, Hormel, Applegate), niche dominance in certain categories, and a degree of pricing power. However, its financial quality indicators are mixed for a value investor. While it has a manageable debt-to-equity ratio of 0.36 and a high dividend yield of 4.99%, its profitability metrics are weak, with a low ROE of 6.2% and a profit margin of just 4.0%. Revenue growth is anemic at 1.3% YoY. This profile results in a low X-Ray Business Score, likely in the 6-9/20 range, which only barely passes the initial Moat & Quality Gate in the Decision Framework. The stock trades at a P/E of 25.9x, which is high for a company with minimal growth, and the GoodMoat Target of $28.45 implies a potential upside. However, given the marginal business quality and the valuation requiring perfect execution in a low-growth environment, the overall assessment is 'with caution.' A value investor may find it worth investigating further only if they have high conviction in a turnaround in profitability and growth, or if the price fell to provide a larger margin of safety. Analysis based on data as of 2024-05-15.
Market Cap$11.53B
Current Price$20.96
P/E Ratio23.56
Forward P/E—
PEG Ratio3.65
EPS$0.87
Book Value$14.36
P/B Ratio1.46
HRL Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use -3.6% FCF growth (CAGR)
Cash vs Debt
Net Debt: 2.2B
Revenue
9.5B
FY19
9.6B
FY20
11.4B
FY21
12.5B
FY22
12.1B
FY23
11.9B
FY24
12.1B
FY25
Net Income
979M
FY19
908M
FY20
909M
FY21
1000M
FY22
794M
FY23
805M
FY24
478M
FY25
HRL 52-Week Range
$19.74
$30.04
50-Day MA: $21.24200-Day MA: $23.08
Did you know?
Trading 36% below its estimated fair value of $28.45.
Hormel Foods Corp (HRL) Financial Summary
Hormel Foods Corp (HRL) is a Consumer Defensive company in the Packaged Foods industry, listed on NYSE. The stock currently trades at $20.96 with a market capitalization of $11.53B.
Key valuation metrics include a P/E ratio of 23.56, price-to-book ratio of 1.46, and EPS of $0.87. The company reports a profit margin of 4.0% and return on equity of 6.2%.
HRL Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $11.53B |
| P/E Ratio | 23.56 |
| EPS | $0.87 |
| P/B Ratio | 1.46 |
| P/S Ratio | 0.95 |
| EV/EBITDA | 12.64 |
| Dividend Yield | 5.49% |
| Profit Margin | 4.0% |
| Return on Equity | 6.2% |
| Debt/Equity | 0.36 |
HRL Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY19 | $9.50B | $978.81M |
| FY20 | $9.61B | $908.08M |
| FY21 | $11.39B | $908.84M |
| FY22 | $12.46B | $999.99M |
| FY23 | $12.11B | $793.57M |
| FY24 | $11.92B | $805.04M |
| FY25 | $12.11B | $478.20M |
Hormel Foods Corp (HRL) Valuation
Based on GoodMoat's DCF model, Hormel Foods Corp has a fair value estimate of $28.45. At the current price of $20.96, the stock appears 26.3% undervalued relative to our intrinsic value estimate.
HRL Quality Indicators
Hormel Foods Corp maintains a profit margin of 4.0% and an operating margin of 6.8%. Return on equity stands at 6.2%. The current ratio is 2.47. Debt-to-equity ratio is 0.36.
About Hormel Foods Corp
Hormel Foods Corporation, based in Austin, Minnesota, is a global branded food company with over $12 billion in annual revenue. Its brands include Planters ®, Skippy ®, SPAM ®, Hormel ® Natural Choice ®, Applegate ®, Wholly ®, Hormel ® Black Label ®, Columbus ®, Jennie-O ® and more than 30 other beloved brands. The Company is a member of the S&P 500 Index and the S&P 500 Dividend Aristocrats, was named one of the best companies to work for by U.S. News & World Report and one of America's most responsible companies by Newsweek, was recognized by TIME magazine as one of the World's Best Companies and has received numerous other awards and accolades for its corporate responsibility and community service efforts.
HRL Free Cash Flow
Hormel Foods Corp generated $534.48M in trailing twelve-month free cash flow, representing an FCF yield of 4.64%. This moderate FCF yield indicates reasonable cash generation.
HRL Shares Outstanding
Hormel Foods Corp has 0.55 billion shares outstanding at a share price of $20.96, giving it a market capitalization of $11.53B.
HRL Recent Insider Trades
Recent insider transactions at Hormel Foods Corp include:
| Insider | Type | Shares | Value |
|---|---|---|---|
| Murano Elsa A | SELL | 13,400 | $321600.00 |