Critical Survey: Smithfield Foods (SFD) versus Tyson Foods (TSN)
Smithfield Foods (NYSE: SFD) and Tyson Foods (NYSE:TSN) are both non-cyclical consumer goods & services companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, risk, valuation, institutional ownership, earnings and profitability.
This is a breakdown of recent ratings for Smithfield Foods and Tyson Foods, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Tyson Foods has a consensus price target of $73.06, suggesting a potential downside of 12.62%.
Tyson Foods pays an annual dividend of $1.20 per share and has a dividend yield of 1.4%. Smithfield Foods does not pay a dividend. Tyson Foods pays out 25.1% of its earnings in the form of a dividend. Tyson Foods has raised its dividend for 5 consecutive years.
Earnings and Valuation
This table compares Smithfield Foods and Tyson Foods’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Tyson Foods||$38.26 billion||0.80||$1.77 billion||$4.79||17.46|
Tyson Foods has higher revenue and earnings than Smithfield Foods. Smithfield Foods is trading at a lower price-to-earnings ratio than Tyson Foods, indicating that it is currently the more affordable of the two stocks.
This table compares Smithfield Foods and Tyson Foods’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
71.6% of Tyson Foods shares are owned by institutional investors. 2.7% of Tyson Foods shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Tyson Foods beats Smithfield Foods on 10 of the 11 factors compared between the two stocks.
About Smithfield Foods
Smithfield Foods, Inc. produces and markets a variety of fresh meat and packaged meats products both domestically and internationally. The Company operates in four segments: Pork, Hog Production, International and Corporate, each of which consists of a number of subsidiaries, joint ventures and other investments. The Pork segment consists mainly of its three wholly owned United States fresh pork and packaged meats subsidiaries: The Smithfield Packing Company, Inc. (Smithfield Packing), Farmland Foods, Inc. (Farmland Foods) and John Morrell Food Group (John Morrell). The Hog Production segment consists of the Company’s hog production operations located in the United States. On September 2012 (fiscal 2013), the Company acquired a 70% controlling interest in American Skin Food Group, LLC. Effective September 26, 2013, Shuanghui International Holdings Ltd merged with Smithfield Foods Inc, a producer and wholesaler of pork meat products.
About Tyson Foods
Tyson Foods, Inc. is a food company, which is engaged in offering chicken, beef and pork, as well as prepared foods. The Company offers food products under Tyson, Jimmy Dean, Hillshire Farm, Sara Lee, Ball Park, Wright, Aidells and State Fair brands. The Company operates through four segments: Chicken, Beef, Pork and Prepared Foods. It operates a vertically integrated chicken production process, which consists of breeding stock, contract growers, feed production, processing, further-processing, marketing and transportation of chicken and related allied products, including animal and pet food ingredients. Through its subsidiary, Cobb-Vantress, Inc. (Cobb), the Company is engaged in supplying poultry breeding stock across the world. It produces a range of fresh, frozen and refrigerated food products. Its products are marketed and sold by its sales staff to grocery retailers, grocery wholesalers, meat distributors, warehouse club stores and military commissaries, among others.
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