Fact based stock research
Hormel Foods (NYSE:HRL)

US4404521001

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Hormel Foods stock research in summary

hormelfoods.com

ANALYSIS: With an Obermatt Combined Rank of 54 (better than 54% compared with investment alternatives), Hormel Foods (Packaged Foods & Meats, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Hormel Foods are low in value (priced high) with a consolidated Value Rank of 47 (worse than 53% of alternatives) and show below-average growth (Growth Rank of 41) but are safely financed (Safety Rank of 75), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 54, is a buy recommendation based on Hormel Foods's financial characteristics. As the company Hormel Foods's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 47) and low growth (Obermatt Growth Rank of 41), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 75) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	47
Growth Rank	41
Safety Rank	75
Combined Rank	54

Country	USA
Industry	Packaged Foods & Meats
Index	Energy Efficient, Human Rights, S&P US Consumer, S&P US Food & Beverage, S&P 500
Size class	X-Large

This stock has achievements: Top 10 Stock.

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Hormel Foods

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	17	39	58	47
GROWTH
GROWTH	42	39	17	41
SAFETY
SAFETY	70	76	67	75
SENTIMENT
SENTIMENT	n/a	36	6	^new
360° VIEW
360° VIEW	n/a	45	19	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 28-Jul-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Hormel Foods is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	17	39	58	47
GROWTH
GROWTH	42	39	17	41
SAFETY
SAFETY	70	76	67	75
COMBINED
COMBINED	31	53	42	54

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Hormel Foods the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 47 (worse than 53% compared with alternatives), Hormel Foods shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Hormel Foods. Expected dividend yields are higher than for 74% of comparable companies (a Dividend Yield rank of 74), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 55, which means that the stock price is lower compared with invested capital than for 55% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 44 which means that the stock price compared with what market professionals expect for future profits is higher than for 56% of comparable companies, indicating a low value concerning Hormel Foods's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Hormel Foods with a rank of 35. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 65% of comparable companies, indicating a low value concerning Hormel Foods's profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 47, is a hold recommendation based on Hormel Foods's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Hormel Foods may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	17	33	41	44
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	11	35	40	35
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	29	39	55	55
DIVIDEND YIELD
DIVIDEND YIELD	34	64	84	74
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	17	39	58	47

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Hormel Foods; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 41 (better than 41% compared with alternatives), Hormel Foods shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Hormel Foods. Sales Growth has a below market rank of 37, which means that, currently, professionals expect the company to grow less than 63% of its competitors. The same is valid for Capital Growth, with a rank of 34, and Profit Growth, with a rank of 48. Currently, professionals expect the company to grow its profits less than 52% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 63, which means that the stock returns have recently been above 63% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 41, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Hormel Foods, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	88	24	34	37
PROFIT GROWTH
PROFIT GROWTH	20	60	29	48
CAPITAL GROWTH
CAPITAL GROWTH	n/a	37	54	34
STOCK RETURNS
STOCK RETURNS	5	57	19	63
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	42	39	17	41

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Hormel Foods.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 75 (better than 75% compared with alternatives) for 2024, the company Hormel Foods has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Hormel Foods is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Hormel Foods. Leverage is at a rank of 66, meaning the company has a below-average debt-to-equity ratio. It has less debt than 66% of its competitors. Liquidity is also good at a rank of 83, meaning the company generates more profit to service its debt than 83% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 49, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 51% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 75 (better than 75% compared with alternatives), Hormel Foods has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Hormel Foods. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Hormel Foods and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	71	60	64	66
REFINANCING
REFINANCING	61	37	34	49
LIQUIDITY
LIQUIDITY	65	92	86	83
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	70	76	67	75

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Hormel Foods and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	17	7	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	25	4	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	92	30	^new
MARKET PULSE
MARKET PULSE	n/a	50	47	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	36	6	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Hormel Foods.
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