Hormel Foods Corporation (HRL) vs Lamb Weston (LW)

Hormel Foods Corporation and Lamb Weston are both Packaged Foods companies. Hormel Foods Corporation is the larger, with a market value of $11.1B against $7.5B — 1.5× the size. Lamb Weston trades at the lower P/E: 28.9× against 32.4×. Lamb Weston grew revenue faster over the last twelve months: 2.58% against 0.73%. Lamb Weston has the higher net margin (3.85% vs 2.82%) and the higher return on invested capital (5.80% vs 3.64%). Both pay a dividend; Hormel Foods Corporation yields more (5.74% vs 2.82%). Across the 23 metrics below, Lamb Weston leads on 14 and Hormel Foods Corporation on 9.

Valuation

Metric HRL LW Packaged Foods median
P/E 32.38 28.94 13.41
P/S 0.92 1.11 0.62
P/B 1.43 4.08 1.47
Price to free cash flow 14.33 17.16 8.73
EV/EBITDA 17.31 12.12 8.26
EV/Sales 1.09 1.68 0.91
Earnings yield 3.09% 3.45% 0.68%
Free cash flow yield 6.98% 5.83% 5.21%

Profitability

Metric HRL LW Packaged Foods median
Gross margin 15.68% 19.38% 27.54%
Operating margin 3.47% 7.80% 0.00%
Net margin 2.82% 3.85% 0.00%
Free cash flow margin 6.45% 6.49% 2.37%
Return on equity 4.30% 14.17% 0.00%
Return on assets 2.56% 3.50% 0.00%
Return on invested capital 3.64% 5.80% 0.00%

Growth

Metric HRL LW Packaged Foods median
Revenue growth (TTM) 0.73% 2.58% 5.69%
EPS growth (last fiscal year) (40.82%) (16.80%) 4.57%
Revenue growth, 5-year CAGR 4.73% 12.49% 3.81%
Net income growth, 5-year CAGR (12.04%) (1.81%) 0.00%

Health

Metric HRL LW Packaged Foods median
Debt to equity 0.36 2.17 0.24
Current ratio 1.88 1.45 1.68
Net debt to EBITDA 2.27 3.89 0.84

Dividend

Metric HRL LW Packaged Foods median
Dividend yield 5.74% 2.82% 4.06%
Payout ratio 1.86 0.82 0.57

Size

Metric HRL LW Packaged Foods median
Market cap 11.11b 7.47b 263.30m

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