Stock in Focus: Hormel Foods Corporation (HRL)

Company Profile:

Hormel Foods Corporation develops, processes, and distributes various meat, nuts, and food products to retail, foodservice, deli, and commercial customers in the United States and internationally. The company operates through four segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, and International & Other. It provides various perishable products that include fresh meats, frozen items, refrigerated meal solutions, sausages, hams, guacamoles, and bacons; and shelf-stable products comprising canned luncheon meats, nut butters, snack nuts, chilies, shelf-stable microwaveable meals, hashes, stews, tortillas, salsas, tortilla chips, and others. The company also engages in the processing, marketing, and sale of branded and unbranded pork, beef, poultry, and turkey products, as well as offers nutritional food products and supplements, desserts and drink mixes, and industrial gelatin products. It sells its products primarily under the SKIPPY, SPAM, Hormel, Natural Choice, Applegate, Justin’s, Jennie-O, Café H, Herdez, Black Label, Sadler’s, Columbus, Gatherings, Herdez, Wholly, Columbus, Planters, NUT-rition, Planters Cheez Balls, Corn Nuts, etc. brand names through sales personnel, independent brokers, and distributors. The company was formerly known as Geo. A. Hormel & Company and changed its name to Hormel Foods Corporation in January 1995. Hormel Foods Corporation was founded in 1891 and is headquartered in Austin, Minnesota.

Recent News:

For the second quarter of fiscal 2022, the company reported net sales of $3.1 billion, up 19%; organic net sales1 up 10%, operating income of $335 million, up 16%, compared to the same period of 2021; operating margin of 10.8%, compared to 11.1% last year and 10.5% last quarter.

On May 23, 2022, the company announced that its quarterly dividend on the common stock, authorized by the Board of Directors at 26 cents ($0.26) a share on May 23, 2022, will be paid August 15, 2022, to stockholders of record at the close of business on July 11, 2022.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects:

Price to Book Value – P/BV, a ratio used to compare book value to its current market price, to gauge whether a stock is valued properly.

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Price to Earnings – PE, the ratio for valuing a company that measures its current share price relative to its earnings per share (EPS).

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Discounted cash flow – DCF, a valuation method used to estimate the value of an investment based on its expected future cash flows.

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Return on Assets – ROA, indicates how profitable a company is in relation to its total assets, how efficiently uses assets to generate a profit.

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Return on Equity – ROE, a measure of financial performance calculated by dividing net income by equity. a gauge of profitability and efficiency.

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Debt to Equity – evaluate financial leverage, reflects the ability of equity to cover outstanding debts in the event of a business downturn.

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Conclusion:

HRL receives outperform rating in price to bookvalue, price to earnings, discounted cash flow, return on equity and debt to equity. Technical indicators signal the bullish signs, as there is a bullish crossover in the Stochastic oscillator, the MACD is trying to cross back up and the RSI stands at 32 with positive bias. We rate Hormel Foods Corporation (HRL) a BUY.