Industrias Bachoco, S.A. de C.V. (NYSE: IBA) and Hormel Foods Corporation (NYSE:HRL) are both mid-cap consumer staples companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, valuation, risk and profitability.
Industrias Bachoco, S.A. de C.V. pays an annual dividend of $0.82 per share and has a dividend yield of 1.2%. Hormel Foods Corporation pays an annual dividend of $0.68 per share and has a dividend yield of 2.2%. Industrias Bachoco, S.A. de C.V. pays out 18.7% of its earnings in the form of a dividend. Hormel Foods Corporation pays out 42.0% 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. Hormel Foods Corporation has raised its dividend for 50 consecutive years. Hormel Foods Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
Industrias Bachoco, S.A. de C.V. has a beta of 0.37, suggesting that its share price is 63% less volatile than the S&P 500. Comparatively, Hormel Foods Corporation has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500.
Earnings & Valuation
This table compares Industrias Bachoco, S.A. de C.V. and Hormel Foods Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Industrias Bachoco, S.A. de C.V.||$3.10 billion||1.06||$446.78 million||$4.38||15.04|
|Hormel Foods Corporation||$9.30 billion||1.78||$1.41 billion||$1.62||19.40|
Hormel Foods Corporation has higher revenue and earnings than Industrias Bachoco, S.A. de C.V.. Industrias Bachoco, S.A. de C.V. 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 table compares Industrias Bachoco, S.A. de C.V. and Hormel Foods Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Industrias Bachoco, S.A. de C.V.||7.54%||12.91%||9.16%|
|Hormel Foods Corporation||9.38%||18.90%||13.62%|
Institutional & Insider Ownership
3.8% of Industrias Bachoco, S.A. de C.V. shares are owned by institutional investors. Comparatively, 39.0% of Hormel Foods Corporation shares are owned by institutional investors. 3.5% of Hormel Foods Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
This is a breakdown of recent recommendations and price targets for Industrias Bachoco, S.A. de C.V. and Hormel Foods Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Industrias Bachoco, S.A. de C.V.||0||0||0||0||N/A|
|Hormel Foods Corporation||0||4||4||0||2.50|
Hormel Foods Corporation has a consensus target price of $37.86, indicating a potential upside of 20.45%. Given Hormel Foods Corporation’s higher probable upside, analysts clearly believe Hormel Foods Corporation is more favorable than Industrias Bachoco, S.A. de C.V..
Hormel Foods Corporation beats Industrias Bachoco, S.A. de C.V. on 14 of the 16 factors compared between the two stocks.
About Industrias Bachoco, S.A. de C.V.
Industrias Bachoco, S.A.B. de C.V. (Bachoco) is a holding company. The Company owns and manages over 1,000 facilities, organized in approximately 10 production complexes and over 60 distribution centers in Mexico, and a production complex in the United States. Bachoco operates through two segments: poultry and others. The poultry segment consists of chicken and egg operations. The others segment includes the operations of pigs, balanced feed for animal consumption and other by-products. The Company participates in the food industry in Mexico and in the United States, mainly in the poultry industry. In Mexico, the Company’s core business is poultry (chicken and egg products). It also produces and sells a range of other products, which it refers to as other business lines, which include the production and selling of balanced feed, live swine, beef and turkey products, as well as a laboratory that produces vaccines for the poultry industry and other similar industries.
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.
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