Smithfield Foods (SFD) vs. The Competition Financial Comparison

Smithfield Foods (NASDAQ:SFD) is one of 330 public companies in the “Food Products” industry, but how does it contrast to its peers? We will compare Smithfield Foods to related companies based on the strength of its institutional ownership, valuation, risk, dividends, earnings, profitability and analyst recommendations.

Institutional and Insider Ownership

39.5% of shares of all “Food Products” companies are owned by institutional investors. 1.8% of Smithfield Foods shares are owned by insiders. Comparatively, 18.7% of shares of all “Food Products” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Smithfield Foods pays an annual dividend of $1.25 per share and has a dividend yield of 5.5%. Smithfield Foods pays out 46.6% of its earnings in the form of a dividend. As a group, “Food Products” companies pay a dividend yield of 11.7% and pay out 31.4% of their earnings in the form of a dividend. Smithfield Foods lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Risk and Volatility

Smithfield Foods has a beta of -0.44, indicating that its share price is 144% less volatile than the S&P 500. Comparatively, Smithfield Foods’ peers have a beta of -3.82, indicating that their average share price is 482% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Smithfield Foods and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smithfield Foods	1	0	5	0	2.67
Smithfield Foods Competitors	2350	8187	8268	397	2.35

Smithfield Foods presently has a consensus target price of $31.50, indicating a potential upside of 39.32%. As a group, “Food Products” companies have a potential upside of 14.34%. Given Smithfield Foods’ stronger consensus rating and higher probable upside, equities analysts clearly believe Smithfield Foods is more favorable than its peers.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Smithfield Foods	6.84%	15.55%	8.84%
Smithfield Foods Competitors	-13.85%	-147.19%	-4.44%

Valuation & Earnings

This table compares Smithfield Foods and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Smithfield Foods	$15.53 billion	$987.00 million	8.44
Smithfield Foods Competitors	$13.65 billion	$702.20 million	-324.49

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

Summary

Smithfield Foods beats its peers on 10 of the 15 factors compared.

Smithfield Foods Company Profile

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.