Tyson Foods (TSN) and Hormel Foods Corporation (NYSE:HRL) Critical Survey
Tyson Foods (NYSE: TSN) and Hormel Foods Corporation (NYSE:HRL) are both large-cap consumer staples companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, valuation, risk, institutional ownership, profitabiliy and dividends.
Risk and Volatility
Tyson Foods has a beta of 0.25, suggesting that its stock price is 75% less volatile than the S&P 500. Comparatively, Hormel Foods Corporation has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.
This table compares Tyson Foods and Hormel Foods Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hormel Foods Corporation||9.42%||19.57%||13.89%|
Insider & Institutional Ownership
72.4% of Tyson Foods shares are held by institutional investors. Comparatively, 38.1% of Hormel Foods Corporation shares are held by institutional investors. 2.7% of Tyson Foods shares are held by company insiders. Comparatively, 3.5% of Hormel Foods Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares Tyson Foods and Hormel Foods Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Tyson Foods||$36.82 billion||0.60||$3.77 billion||$4.79||12.57|
|Hormel Foods Corporation||$9.40 billion||1.87||$1.40 billion||$1.64||20.24|
Tyson Foods has higher revenue and earnings than Hormel Foods Corporation. Tyson Foods is trading at a lower price-to-earnings ratio than Hormel Foods Corporation, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent recommendations for Tyson Foods and Hormel Foods Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hormel Foods Corporation||0||4||6||0||2.60|
Tyson Foods currently has a consensus price target of $67.70, suggesting a potential upside of 12.42%. Hormel Foods Corporation has a consensus price target of $39.78, suggesting a potential upside of 19.81%. Given Hormel Foods Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Hormel Foods Corporation is more favorable than Tyson Foods.
Tyson Foods pays an annual dividend of $0.90 per share and has a dividend yield of 1.5%. Hormel Foods Corporation pays an annual dividend of $0.68 per share and has a dividend yield of 2.0%. Tyson Foods pays out 18.8% of its earnings in the form of a dividend. Hormel Foods Corporation pays out 41.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Tyson Foods has raised its dividend for 50 consecutive years and Hormel Foods Corporation has raised its dividend for 5 consecutive years.
Hormel Foods Corporation beats Tyson Foods on 10 of the 17 factors compared between the two stocks.
Tyson Foods Company Profile
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.
Hormel Foods Corporation Company Profile
Hormel Foods Corporation is engaged in the production of a range of meat and food products. The Company operates through five segments: Grocery Products, which is engaged in the processing, marketing and sale of shelf-stable food products sold for the retail market; Refrigerated Foods, which consists of the processing, marketing and sale of branded and unbranded pork, beef, chicken and turkey products for retail, foodservice and fresh product customers; Jennie-O Turkey Store (JOTS), which consists of the processing, marketing and sale of branded and unbranded turkey products for retail, foodservice and fresh product customers; Specialty Foods, which consists of the packaging and sale of nutritional and private label shelf-stable products to industrial, retail and foodservice customers, and International & Other, which includes Hormel Foods International Corporation, which manufactures, markets and sells the Company products internationally.
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