Hermes International SCA
🇫🇷 RMS.PA · Paris · FR0000052292
Consumer
EUR 1667.50 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
38.7
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 1667.50 ÷ 43.08 = 38.7
TTM period through: 2025-12-31
Forward P/E (estimated): 36.6
Based on analyst estimates
Reference: Provider P/E (Trailing): 38.8
Yield (Fwd)
1.08%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 1.08%
Net Debt/EBITDA (TTM)
-1.3x
Latest quarter: -2.2x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): -2.2x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
41.8%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 61.8%
Cash Flow Payout (TTM): 52.0%
FCF Coverage (TTM): 1.92x
ROE
25.2%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
21.3x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Hermès is an exceptionally well-run luxury brand with a pristine balance sheet and stellar margins, but it fundamentally conflicts with our essential services dividend strategy. The combination of a 1.08% yield, a P/E near 39x, and a confirmed 32.4% upcoming dividend cut makes this stock unsuitable for income-focused investors. Not recommended for new positions given the extreme strategy mismatch and lack of margin of safety.
Sector Context
Hermès is a globally renowned luxury goods manufacturer known for its high-end leather goods, lifestyle accessories, and apparel. While the company boasts immense brand power and pricing power, the fashion/luxury sector is fundamentally incompatible with conservative dividend value strategies due to its reliance on fickle, discretionary consumer spending and typically low dividend yields.
Temporary Opportunity Identified
Geopolitical tensions and a broader luxury sector sell-off have pressured the stock recently, but this does not resolve the fundamental strategy mismatch or extreme valuation multiples.
📊 Strategy Analysis
- • Pristine balance sheet with a net cash position (Net Debt/EBITDA of -1.32x) and negligible debt-to-equity (0.12x).
- • Exceptional business profitability demonstrated by an ROE of 25.21% and EBIT margins of 41.05%.
⚠ What to Watch
- • Severe strategy mismatch: The discretionary luxury goods sector explicitly violates the core philosophy of investing in essential, predictable services.
- • Extreme overvaluation with a TTM P/E of 38.71x and EV/EBITDA of 21.29x, far exceeding our target 8-15x value range.
- • Inadequate income generation with a dividend yield of just 1.08%, compounded by a confirmed upcoming 32.4% dividend reduction.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-05
Disclaimer: This information is for educational purposes only. Not financial advice.