HRL GoodMoat Verdict
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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) Quality Analysis
GoodMoat Analysis
Hormel Foods exhibits a stable but low-quality financial profile from a value investing perspective. While it possesses a strong brand moat and a healthy balance sheet, its core profitability metrics—including a 6.2% ROE and 4.0% profit margin—are weak and show signs of deterioration. This makes it an unfavourable candidate for investors seeking high returns on capital.
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Applying the GoodMoat framework, Hormel's quality indicators are predominantly weak. The company's Return on Invested Capital (ROIC) proxy, a 6.2% ROE, falls far below the 15-20% threshold for a high-quality business. Profitability is low and appears to be under pressure, with an operating margin of only 6.8% and a profit margin of 4.0%. Revenue growth is anemic at 1.3% YoY, and the 25.9x P/E ratio suggests the market is not pricing this as a traditional value stock. The 4.2% Free Cash Flow Yield is adequate but not strong. Positives include a conservative balance sheet with a Debt/Equity ratio of 0.36, which is favourable, and a nearly 5% dividend yield that indicates shareholder returns. From a moat perspective (Section 1), Hormel likely scores on Brand & Culture and possibly Niche Dominance in certain packaged meat categories, but this is not translating into superior financial performance. Compared to peers, Hormel's profitability and growth are lagging, indicating a competitive position that is stable but not advantaged enough to generate high returns on capital. The quality profile is unfavourable for a value investor focused on compounders. Analysis based on data as of 2024-05-15.
HRL Profitability
Profitability trend analysis coming soon
HRL Growth
Growth trend analysis coming soon
HRL Financial Health
Financial health indicators coming soon
HRL Quality & Fundamental Analysis
Hormel Foods Corp (HRL) is a Consumer Defensive company in the Packaged Foods industry, listed on NYSE. This quality analysis page evaluates Hormel Foods Corp's financial health using the Piotroski F-Score methodology, profitability ratios, growth trajectory, and balance sheet strength.
Hormel Foods Corp has a Piotroski F-Score of N/A out of 9, measuring profitability, leverage, and operating efficiency. The company operates with a profit margin of 4.03% and a return on equity (ROE) of 6.19%. Return on assets (ROA) stands at 3.65%.
The debt-to-equity ratio is 0.36, with a current ratio of 2.47. Operating margin is 6.81%.
GoodMoat's quality analysis uses AI-powered insights to evaluate whether Hormel Foods Corp is a fundamentally sound investment. The GoodMoat Verdict synthesizes profitability, growth, and financial health scores into a clear investment quality rating. Use these metrics alongside valuation tools like the DCF calculator and fair value models to make informed investment decisions.