Comparing Smithfield Foods (SFD) & Its Competitors

Smithfield Foods (NASDAQ:SFD) is one of 328 publicly-traded companies in the “Food Products” industry, but how does it weigh in compared to its competitors? We will compare Smithfield Foods to similar businesses based on the strength of its valuation, risk, earnings, profitability, dividends, institutional ownership and analyst recommendations.

Institutional & Insider Ownership

39.0% of shares of all “Food Products” companies are held by institutional investors. 1.8% of Smithfield Foods shares are held by company insiders. Comparatively, 19.0% of shares of all “Food Products” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Smithfield Foods and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smithfield Foods	3	1	3	0	2.00
Smithfield Foods Competitors	2454	8305	8386	405	2.34

Smithfield Foods presently has a consensus target price of $24.67, suggesting a potential upside of 30.01%. As a group, “Food Products” companies have a potential upside of 16.90%. Given Smithfield Foods’ higher possible upside, equities research analysts clearly believe Smithfield Foods is more favorable than its competitors.

Earnings & Valuation

This table compares Smithfield Foods and its competitors gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Smithfield Foods	$15.53 billion	$987.00 million	8.32
Smithfield Foods Competitors	$15.47 billion	$703.44 million	-2,412.60

Smithfield Foods has higher revenue and earnings than its competitors. Smithfield Foods is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Dividends

Smithfield Foods pays an annual dividend of $1.25 per share and has a dividend yield of 6.6%. Smithfield Foods pays out 54.8% of its earnings in the form of a dividend. As a group, “Food Products” companies pay a dividend yield of 12.4% and pay out 29.5% of their earnings in the form of a dividend. Smithfield Foods lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Profitability

This table compares Smithfield Foods and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Smithfield Foods	5.94%	13.41%	7.68%
Smithfield Foods Competitors	-12.87%	-127.95%	-2.08%

Volatility & Risk

Smithfield Foods has a beta of -0.39, suggesting that its stock price is 139% less volatile than the S&P 500. Comparatively, Smithfield Foods’ competitors have a beta of -3.84, suggesting that their average stock price is 484% less volatile than the S&P 500.

Summary

Smithfield Foods beats its competitors on 8 of the 15 factors compared.

Smithfield Foods Company Profile

Smithfield Foods is a U.S.-based food company focused on pork production and packaged meats. Its operations span hog farming, meat processing and the manufacture and marketing of fresh pork and prepared foods. The company sells products under brands including Smithfield, Eckrich, Farmland, Armour and Cook’s. Its offerings include fresh pork, bacon, ham, sausage, hot dogs and other packaged meat products for retail, food-service and wholesale customers. Founded in 1936 in Smithfield, Virginia, the company has grown from a regional meat processor into a major pork producer.