AdvancePierre Foods (NYSE: APFH) and Hershey (NYSE:HSY) are both mid-cap non-cyclical consumer goods & services companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.

Valuation and Earnings

This table compares AdvancePierre Foods and Hershey’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AdvancePierre Foods N/A N/A N/A $2.05 19.63
Hershey $7.44 billion 3.10 $720.04 million $3.36 32.55

Hershey has higher revenue and earnings than AdvancePierre Foods. AdvancePierre Foods is trading at a lower price-to-earnings ratio than Hershey, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares AdvancePierre Foods and Hershey’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AdvancePierre Foods 7.00% N/A 8.96%
Hershey 9.52% 124.06% 19.16%

Institutional and Insider Ownership

51.3% of Hershey shares are owned by institutional investors. 0.9% of Hershey shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

AdvancePierre Foods pays an annual dividend of $0.64 per share and has a dividend yield of 1.6%. Hershey pays an annual dividend of $2.62 per share and has a dividend yield of 2.4%. AdvancePierre Foods pays out 31.2% of its earnings in the form of a dividend. Hershey pays out 78.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hershey has increased its dividend for 8 consecutive years. Hershey is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent recommendations for AdvancePierre Foods and Hershey, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AdvancePierre Foods 0 3 0 0 2.00
Hershey 2 7 4 0 2.15

AdvancePierre Foods presently has a consensus price target of $37.67, indicating a potential downside of 6.42%. Hershey has a consensus price target of $113.15, indicating a potential upside of 3.46%. Given Hershey’s stronger consensus rating and higher probable upside, analysts clearly believe Hershey is more favorable than AdvancePierre Foods.

Summary

Hershey beats AdvancePierre Foods on 13 of the 14 factors compared between the two stocks.

AdvancePierre Foods Company Profile

AdvancePierre Foods Holdings, Inc. is a producer and distributor of ready-to-eat sandwiches, sandwich components and other entrees and snacks. The Company operates through four segments. The Foodservice segment’s portfolio of products includes breakfast sandwiches, peanut butter and jelly sandwiches, Philly steaks, fully cooked hamburger-patties, country-fried steak, stuffed entrees and chicken tenders. The Retail segment sells both branded and private label ready-to-eat sandwiches, such as grilled chicken sandwiches and stuffed pockets; sandwich components, such as chicken patties, and other entrees and snacks, such as stuffed chicken breasts. The Convenience segment sells customized ready-to-eat sandwiches, such as breakfast sandwiches and burgers; sandwich components, such as chicken patties, and other entrees and snacks, such as cinnamon dough bites. The Industrial segment supplies other food producers, such as packaged food companies under short-term co-manufacturing agreements.

Hershey Company Profile

The Hershey Company is a producer of chocolate in North America. The Company’s principal product offerings include chocolate and non-chocolate confectionery products; gum and mint refreshment products; pantry items, such as baking ingredients and beverages, and snack items, such as spreads, meat snacks, bars and snack bites and mixes. Its segments include North America, and International and Other. The North America segment includes its chocolate and non-chocolate confectionery business, as well as its grocery and snacks business. This includes developing and growing its business in chocolate and non-chocolate confectionery, pantry, food service and other snacking product lines. The Company distributes and sells confectionery products in export markets of Asia, Latin America, the Middle East, Europe, Africa and other regions. As of December 31, 2016, the Company marketed, sold and distributed its products under more than 80 brand names in approximately 70 countries across the world.

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