MeritValue

HORMEL FOODS CORP /DE/

HRLdata completeness 100%18 fiscal years on file
The thesis, from the filings

HORMEL FOODS CORP /DE/ earns about 8% on invested capital, below its ~9% cost of capital, with a roughly flat share count — no moat visible in the numbers. The estimate methods put fair value between $15.15 and $16.52 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$11.4B1$12.5B2$12.1B3$11.9B3$12.1B3
Net income$908.8M4$1,000M5$793.6M6$805M6$478.2M6
Operating cash flow$1B7$1.13B8$1.05B9$1.27B9$845.3M9
Capital expenditure$232.4M10$278.9M11$270.2M12$256.4M12$310.9M12
Free cash flow (derived)$769.5M7$856.1M8$777.6M9$1.01B9$534.3M9
Total debt$3.32B13$3.3B14$3.31B15$2.86B16$2.86B16
Cash & equivalents$613.5M17$982.1M18$736.5M19$741.9M20$670.7M20
Diluted shares547.6M549.6M549.0M548.8M550.5M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$143.53
your share of equity
Profit it earned you last year
$8.69
Free cash flow it threw off
$9.71
Debt you’d be carrying
$51.91

10 shares is a claim on $143.53 of net worth that earned you $8.69 and generated $9.71 of cash last year, against $51.91 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
8% avg · 5y
FY21 10%FY22 11%FY23 8%FY24 8%FY25 5%

It earned about 8% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+1% shares · 5y

Share count is roughly flat over 5 years — little dilution, little buyback. Total debt has fallen 14% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $15.15 and $16.52 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$15.19
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.4%
  • fcfBase$777.6M
DCF · Growth Exit 5Y
$16.52
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.4%
  • fcfBase$777.6M
Earnings Power Value
$15.15
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$805M
  • growthAssumed0.0%
Graham Number
$16.76
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years0.4%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $16.52
The three cases
Bear0.0%$16.21
Base0.4%$16.52
Bull5.4%$21.47

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 0.4%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-10-31 · accession 0000048465-23-000083 (RevenueFromContractWithCustomerIncludingAssessedTax)
  2. 10-K · period ending 2022-10-30 · accession 0000048465-24-000051 (RevenueFromContractWithCustomerIncludingAssessedTax)
  3. 10-K · period ending 2023-10-29 · accession 0000048465-25-000059 (RevenueFromContractWithCustomerIncludingAssessedTax)
  4. 10-K · period ending 2021-10-31 · accession 0000048465-23-000083 (NetIncomeLoss)
  5. 10-K · period ending 2022-10-30 · accession 0000048465-24-000051 (NetIncomeLoss)
  6. 10-K · period ending 2023-10-29 · accession 0000048465-25-000059 (NetIncomeLoss)
  7. 10-K · period ending 2021-10-31 · accession 0000048465-23-000083 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-10-30 · accession 0000048465-24-000051 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-10-29 · accession 0000048465-25-000059 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-10-31 · accession 0000048465-23-000083 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-10-30 · accession 0000048465-24-000051 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-10-29 · accession 0000048465-25-000059 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-10-31 · accession 0000048465-22-000051 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-10-30 · accession 0000048465-23-000083 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-10-29 · accession 0000048465-24-000051 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-10-27 · accession 0000048465-25-000059 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-10-31 · accession 0000048465-22-000051 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-10-30 · accession 0000048465-23-000083 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-10-29 · accession 0000048465-24-000051 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-10-27 · accession 0000048465-25-000059 (CashAndCashEquivalentsAtCarryingValue)