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Hormel Foods Corporation (HRL) — WACC Analysis

WACC Breakdown

Hormel Foods Corporation (HRL) has a weighted average cost of capital (WACC) of 5.7%. The cost of equity is 6.6%, derived from a beta of 0.15 and a risk-free rate of 4.7%. The after-tax cost of debt is 2.2%. The capital structure is 80.8% equity and 19.2% debt.

Interpretation

A WACC of 5.7% suggests that the market views Hormel Foods Corporation as relatively low-risk, with a lower cost of financing.

Investors can compare HRL's WACC of 5.7% against industry peers to gauge its relative financing costs. A beta of 0.15 reflects the stock's volatility relative to the broader market.

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VALUATION

HRL WACC: 5.72% for Hormel Foods Corporation

Current inputs imply a 6.56% cost of equity and a 2.76% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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[02]
WACC Calculation Process
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Market Data Loaded
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Company Data Fetched
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Beta Calculated (5Y)
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Inputs Auto-Populated
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WACC Calculated
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Step 2: Enter Ticker Symbol
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Step 4: Review Auto-Populated WACC Inputs

Values are automatically populated from real data. You can adjust them manually if needed.

4.30%
1.000
4.23%
5.00%
21.00%
70.00%
Debt: 30.00%Equity: 70.00%

Please enter a valid company ticker to calculate WACC

Hormel Foods Corporation Common Stock (HRL) WACC Results
Weighted Average Cost of Capital
5.72%
Cost of Equity
6.56%
Risk-Free Rate4.73%
Beta0.15
Market Risk Premium4.23%
Cost of Debt
2.18%
Pre-Tax Cost of Debt2.76%
Tax Rate21.00%
Tax Shield0.58%
Capital Structure
Equity: 80.81%($12.03B)
Debt: 19.19%($2855.12M)
Equity Component
5.30%
80.81% × 6.56%
Debt Component
0.42%
19.19% × 2.18%

Hormel Foods Corporation (HRL) WACC in context

Hormel Foods Corporation (HRL) currently screens with an estimated WACC of 5.72%. That blends a 6.56% cost of equity, a 2.76% pre-tax cost of debt, and a 80.81% equity weight into the discount rate you would typically use in a DCF model.

screens as a relatively low discount rate, which usually supports higher DCF values.

What HRL WACC implies

A 5.72% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates HRL

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.15 and equity accounts for 80.81% of capital.

What to do next

Validate business quality on the company page, then carry the same discount-rate assumptions into the DCF page to test fair value sensitivity.

Disclaimer: This is not financial advice. Data sourced from SEC EDGAR and Polygon.io. Past performance does not guarantee future results. Always conduct your own research before making investment decisions.