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HSY vs KO

HSY
The Hershey Company
NEUTRAL
Price
$179.20
Market Cap
$36.12B
Sector
Consumer Defensive
AI Confidence
72%
KO
The Coca-Cola Company
BEARISH
Price
$75.44
Market Cap
$324.71B
Sector
Consumer Defensive
AI Confidence
85%

Valuation

P/E Ratio
HSY
26.83
KO
24.82
Forward P/E
HSY
21.33
KO
21.85
P/B Ratio
HSY
7.96
KO
10.09
P/S Ratio
HSY
3.14
KO
6.77
EV/EBITDA
HSY
16.7
KO
22.31

Profitability

Gross Margin
HSY
37.73%
KO
61.63%
Operating Margin
HSY
13.54%
KO
24.66%
Profit Margin
HSY
11.84%
KO
27.34%
ROE
HSY
31.01%
KO
43.32%
ROA
HSY
9.33%
KO
9.15%

Growth

Revenue Growth
HSY
6.5%
KO
2.4%
Earnings Growth
HSY
-38.2%
KO
3.6%

Financial Health

Debt/Equity
HSY
1.26
KO
1.4
Current Ratio
HSY
1.36
KO
1.46
Quick Ratio
HSY
0.66
KO
0.89

Dividends

Dividend Yield
HSY
3.06%
KO
2.73%
Payout Ratio
HSY
81.91%
KO
67.11%

AI Verdict

HSY NEUTRAL

Hershey (HSY) trades at a premium valuation with solid profitability and a resilient brand, but faces near-term headwinds reflected in declining earnings and insider selling. Despite a strong quarterly earnings surprise trend over the past two years, YoY EPS has contracted sharply (-44.4%), and operating margins have compressed amid cost pressures. The stock is down 10.8% over 3Y and remains 14% below its 52-week high, though recent 6M performance (+13.9%) suggests stabilization. Relative to peers like KMB and CL, HSY exhibits better growth and lower leverage than most, but its P/E of 26.8x exceeds the sector average of 22.5x and forward P/E of 21.3x offers limited upside given earnings volatility.

Strengths
ROE of 31.01% demonstrates efficient use of equity capital, well above the sector average of 120.59% when excluding outliers like CL (293.63%) and KMB (136.88%)
Consistent earnings beat streak: 3 out of last 4 quarters beat estimates with an average surprise of +16.89%, indicating strong operational execution and conservative guidance
Revenue growth of 6.5% YoY outpaces peer average of 5.46%, showing pricing power and demand resilience in a defensive sector
Risks
Earnings growth collapse: YoY EPS down -38.2%, Q/Q down -38.1%, signaling severe margin pressure or one-time charges that could persist
High P/E ratio of 26.83 vs forward P/E of 21.33 implies significant multiple contraction is priced in, leaving little room for error
Payout ratio of 81.91% is elevated for a company with earnings volatility, raising sustainability concerns if profitability does not rebound
KO BEARISH

KO exhibits a significant disconnect between its current market price ($75.44) and its deterministic value markers, with a Piotroski F-Score of 3/9 indicating weak financial health trends. The stock trades at a massive premium to both its Graham Number ($22.43) and Intrinsic Value ($37.08), while a PEG ratio of 3.95 suggests severe overvaluation relative to its stagnant growth. Despite strong historical earnings beats and high ROE, the combination of bearish insider selling and a 0/100 technical trend signals a lack of immediate catalyst for upside.

Strengths
Exceptional Return on Equity (ROE) of 43.32%
Strong profit margins (27.34%) and gross margins (61.63%)
Consistent track record of beating earnings estimates over 25 quarters
Risks
Severe overvaluation relative to Graham and Intrinsic value models
Weak operational health trend as indicated by a Piotroski F-Score of 3/9
Stagnant revenue growth (2.40% YoY) failing to justify the P/E multiple

Compare Another Pair

HSY vs KO: Head-to-Head Comparison

This page compares The Hershey Company (HSY) and The Coca-Cola Company (KO) across key fundamental metrics including valuation ratios, profitability margins, growth rates, financial health indicators, and dividend metrics. Each metric highlights the better-performing stock so you can quickly identify relative strengths and weaknesses.

Our AI engine independently analyzes each company's financials, competitive position, and market conditions to produce a verdict (Bullish, Neutral, or Bearish) along with key strengths and risks. Use this comparison alongside your own research to make informed investment decisions.

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