Stock fact sheet · data as of
Hormel Foods Corporation (HRL): fair value, margin of safety and Wheel Score
Consumer Defensive · Packaged Foods · United States · High Yield Income
Is HRL undervalued?
Hormel Foods Corporation (HRL) closed at 20.19 on 16 Oct 2026, 23% above the GLS average fair value of 16.39. Only 3 of the 9 models that produced a number value the shares above the current price. The margin of safety is negative, so the stock fails the "below fair value" rule of the Sunday Scan; a premium of this size is common for companies whose growth the models are conservative about.
The 9 models disagree widely: GLS Growth gives 1.82 while 10 Cap gives 38.27. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.
The nightly engine files HRL under High Yield Income: a dividend yield above 4%.
Nine valuation models for HRL
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 26.59 | +32% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 14.12 | -30% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 11.91 | -41% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 3.45 | -83% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 1.82 | -91% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 38.27 | +90% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 27.18 | +35% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 17.22 | -15% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 6.91 | -66% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -3.76 | -119% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 25.00 | +24% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Financial health is average - HRL passes 6 of the nine Piotroski tests, which passes the Sunday Scan's "6 or more" rule. The Financials tab on the Quote page shows which tests fail. The GLS Moat score is low at 3.2 out of 10, which says the ten-year record of revenue, earnings, margins and returns on capital has been inconsistent - growth and shocks rather than steady compounding.
Returns on capital are thin or negative - ROIC 4.4%, ROE 6.1%, ROA 3.6% - with debt at 0.36 times equity and a free-cash-flow yield of 7.0%.
The dividend yield is high at 5.79% (payout ratio 187%) - a payout above 100% of earnings, which is not covered by profits. A yield this size is often the market's way of pricing a risk to the payout, so the health score and cash flow matter more than usual. Revenue comes mainly from Retail 60%, Foodservice 34%, Rest of world 6% (quarter Q3 FY2026).
Institutional ownership scores 6/10, insider activity 3/10 and Congressional trading 1/10 on the GLS smart-money scales.
| Piotroski F-score | 6 / 9 | ROIC | 4.4% |
|---|---|---|---|
| GLS Moat | 3.2 / 10 | ROE | 6.1% |
| Debt / equity | 0.36 | ROA | 3.6% |
| Free-cash-flow yield | 7.0% | Payout ratio | 187% |
| Institutions | 6 / 10 | Insiders · Congress | 3 · 1 / 10 |
Wheel Score 54: Fair
HRL scores 54 out of 100 on the Wheel Score (Fair band, 50-64): a usable but unremarkable fit for the wheel strategy. The parts: Value 3/25, Health 13/20, Moat 5/15, Premium 13/20, Stability 20/20. Value (3/25) is where the points are missing.
Implied volatility is 28% on the near-the-money contracts 20-60 days out: some premium, but under the 35-60% range the Wheel Score pays full marks for (13 of 20 points). The option chain is deep: 94,919 contracts of open interest across all expiries, which means tight fills at most strikes.
Volume runs at 6.7M shares a day on a market cap of $11.1B, with a beta of 0.29 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 20 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 3 / 25 | -23% margin of safety | |
| Health | 13 / 20 | Piotroski 6/9 | |
| Moat | 5 / 15 | moat 3.2/10 | |
| Premium | 13 / 20 | implied volatility 28% | |
| Stability | 20 / 20 | 6.7M shares/day, $11.1B cap, beta 0.29 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
The next earnings report is due on 3 Dec 2026, 48 days away - outside the window of a 30-45-day put sold today.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Packaged Foods
The 12 companies below are the closest to Hormel Foods Corporation by market cap within the Packaged Foods industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| MICC The Magnum Ice Cream Company N.V. | 18.44 | 21.79 | +15% | 76Good | $11.3B |
| MKC McCormick & Company, Incorporated | 45.71 | 73.06 | +37% | 81Prime | $12.3B |
| DAR Darling Ingredients Inc. | 60.87 | 63.96 | +5% | 81Prime | $9.6B |
| SJM The J. M. Smucker Company | 121.84 | 80.04 | -52% | 56Fair | $13.0B |
| LW Lamb Weston Holdings, Inc. | 54.21 | 39.77 | -36% | 63Fair | $7.5B |
| SFD Smithfield Foods, Inc. | 18.30 | 34.73 | +47% | 78Good | $7.2B |
| GIS General Mills, Inc. | 32.88 | 60.70 | +46% | 45Weak | $17.6B |
| PPC Pilgrim's Pride Corporation | 29.01 | 65.35 | +56% | 82Prime | $6.9B |
| CAG Conagra Brands, Inc. | 14.18 | 26.09 | +46% | 45Weak | $6.8B |
| INGR Ingredion Incorporated | 97.27 | 228.28 | +57% | 82Prime | $6.1B |
| CPB Campbell Soup Company | 19.84 | 26.87 | +26% | 77Good | $5.9B |
| KHC The Kraft Heinz Company | 23.28 | 35.95 | +35% | 45Weak | $27.6B |
⚖ Compare HRL with 7 of them All Consumer Defensive stocks →
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A free GLS Equity account gets you nightly fair value and the Wheel Score on ~7,400 US stocks, a watchlist, the scanner preview and the Sunday Scan - the same eight-rule screen, emailed every week. Pro adds the full put and call scanners, unlimited watchlists with alerts and the trade journal.
Start free See the Sunday ScanQuestions about HRL
Is HRL undervalued right now?
No: at 20.19 the stock trades 23% above the GLS average fair value of 16.39 (data as of 16 Oct 2026). The margin of safety is negative.
What is the Wheel Score of HRL and what does it mean?
HRL scores 54 out of 100 (Fair). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for HRL?
16.39 per share as of 16 Oct 2026 - the simple average of the 9 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Hormel Foods Corporation report earnings next?
The next earnings report is due on 3 Dec 2026 (before the open), 48 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does HRL have listed options, and how liquid are they?
Yes. The nightly snapshot found 552 listed contracts with 94,919 open interest across all expiries and implied volatility of 28% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.