Brf (BRFS) versus Smithfield Foods (SFD) Critical Comparison

Brf (NYSE: BRFS) and Smithfield Foods (NYSE:SFD) are both consumer staples companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, earnings, risk, profitability and valuation.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Brf and Smithfield Foods, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brf 0 3 2 0 2.40
Smithfield Foods 0 0 0 0 N/A

Brf presently has a consensus target price of $15.00, indicating a potential upside of 19.05%.

Profitability

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

Net Margins Return on Equity Return on Assets
Brf -2.80% -7.41% -2.03%
Smithfield Foods N/A N/A N/A

Institutional and Insider Ownership

8.0% of Brf shares are owned by institutional investors. 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 company will outperform the market over the long term.

Earnings & Valuation

This table compares Brf and Smithfield Foods’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Brf $9.73 billion 1.04 -$106.76 million ($0.30) -42.00
Smithfield Foods N/A N/A N/A ($4,198.95) N/A

Smithfield Foods has higher revenue, but lower earnings than Brf. Brf is trading at a lower price-to-earnings ratio than Smithfield Foods, indicating that it is currently the more affordable of the two stocks.

Summary

Brf beats Smithfield Foods on 5 of the 8 factors compared between the two stocks.

About Brf

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.

About Smithfield Foods

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.

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