Financial Contrast: Tyson Foods (TSN) and Pilgrim’s Pride Corporation (NASDAQ:PPC)

Pilgrim’s Pride Corporation (NASDAQ: PPC) and Tyson Foods (NYSE:TSN) are both mid-cap consumer staples companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, risk, valuation and profitabiliy.

Dividends

Tyson Foods pays an annual dividend of $0.90 per share and has a dividend yield of 1.4%. Pilgrim’s Pride Corporation does not pay a dividend. Tyson Foods pays out 18.8% of its earnings in the form of a dividend. Tyson Foods has raised its dividend for 5 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Pilgrim’s Pride Corporation and Tyson Foods, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pilgrim’s Pride Corporation 0 2 3 0 2.60
Tyson Foods 1 4 7 0 2.50

Pilgrim’s Pride Corporation currently has a consensus price target of $23.33, suggesting a potential downside of 8.32%. Tyson Foods has a consensus price target of $67.70, suggesting a potential upside of 6.95%. Given Tyson Foods’ higher probable upside, analysts plainly believe Tyson Foods is more favorable than Pilgrim’s Pride Corporation.

Volatility and Risk

Pilgrim’s Pride Corporation has a beta of 0.19, meaning that its share price is 81% less volatile than the S&P 500. Comparatively, Tyson Foods has a beta of 0.26, meaning that its share price is 74% less volatile than the S&P 500.

Valuation and Earnings

This table compares Pilgrim’s Pride Corporation and Tyson Foods’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Pilgrim’s Pride Corporation $8.21 billion 0.77 $1.00 billion $1.99 12.79
Tyson Foods $36.82 billion 0.63 $3.77 billion $4.79 13.22

Tyson Foods has higher revenue and earnings than Pilgrim’s Pride Corporation. Pilgrim’s Pride Corporation is trading at a lower price-to-earnings ratio than Tyson Foods, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

26.4% of Pilgrim’s Pride Corporation shares are held by institutional investors. Comparatively, 71.8% of Tyson Foods shares are held by institutional investors. 78.8% of Pilgrim’s Pride Corporation shares are held by company insiders. Comparatively, 2.7% of Tyson Foods shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Pilgrim’s Pride Corporation and Tyson Foods’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pilgrim’s Pride Corporation 6.05% 53.37% 15.69%
Tyson Foods 4.91% 18.55% 8.03%

Summary

Tyson Foods beats Pilgrim’s Pride Corporation on 10 of the 17 factors compared between the two stocks.

Pilgrim’s Pride Corporation Company Profile

Pilgrim’s Pride Corporation is a retail feed store. It is a producer and seller of chicken with operations in the United States, Mexico and Puerto Rico. It is engaged in the production, processing, marketing and distribution of fresh, frozen and value-added chicken products to retailers, distributors and foodservice operators. It offers a range of products to its customers through national and international distribution channels. Its fresh chicken products consist of refrigerated (non-frozen) whole chickens, whole cut-up chickens and selected chicken parts that are either marinated or non-marinated. Its prepared chicken products include ready-to-cook and individually frozen chicken parts, strips, nuggets and patties, some of which are either breaded or non-breaded and either marinated or non-marinated. As of December 25, 2016, the Company marketed its portfolio of fresh, prepared and value-added chicken products across the United States, Mexico and in approximately 80 other countries.

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.

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