Hormel Foods Corporation (NYSE: HRL) and BRF (NYSE:BRFS) are both mid-cap consumer staples companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitabiliy, dividends and risk.
Insider and Institutional Ownership
38.1% of Hormel Foods Corporation shares are owned by institutional investors. Comparatively, 9.4% of BRF shares are owned by institutional investors. 3.5% of Hormel Foods Corporation shares are owned by company insiders. Comparatively, 1.0% of BRF shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares Hormel Foods Corporation and BRF’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%|
Earnings and Valuation
This table compares Hormel Foods Corporation and BRF’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Hormel Foods Corporation||$9.40 billion||1.92||$1.40 billion||$1.64||20.82|
|BRF||$10.70 billion||0.88||$937.89 million||($0.26)||-45.38|
Hormel Foods Corporation has higher revenue, but lower earnings than BRF. BRF 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.
Hormel Foods Corporation pays an annual dividend of $0.68 per share and has a dividend yield of 2.0%. BRF does not pay a dividend. Hormel Foods Corporation pays out 41.5% of its earnings in the form of a dividend. Hormel Foods Corporation has increased its dividend for 50 consecutive years.
Risk & Volatility
Hormel Foods Corporation has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500. Comparatively, BRF has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500.
This is a summary of current recommendations and price targets for Hormel Foods Corporation and BRF, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hormel Foods Corporation||0||4||6||0||2.60|
Hormel Foods Corporation currently has a consensus target price of $39.78, suggesting a potential upside of 16.48%. BRF has a consensus target price of $14.00, suggesting a potential upside of 18.64%. Given BRF’s higher possible upside, analysts clearly believe BRF is more favorable than Hormel Foods Corporation.
Hormel Foods Corporation beats BRF on 12 of the 16 factors compared between the two stocks.
About Hormel Foods Corporation
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.
BRF S.A. is a multinational Brazilian company that owns a diverse portfolio of products and is a producer of foods. The Company’s segments include Brazil, Latin America (LATAM), Europe, Middle East and North of Africa (MENA), Asia, Africa and Other Segments. These segments include sales of all distribution channels and operations subdivided in to poultry, pork and other, processed, and other sales. The poultry operations include the production and sale of whole poultry and in-natura cuts. The pork and other operations involve the production and sale of in-natura cuts. The processed operations include the production and sale of processed foods, frozen and processed products derived from poultry, pork and beef, margarine, vegetable and soybean-based products. The other sales operations include the commercialization of flour for food service and others. Other segments include sale of in-natura beef cuts, agricultural products and animal feed.
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