Financial Survey: Smithfield Foods (SFD) & The Competition

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

Institutional & Insider Ownership

39.2% 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 hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Smithfield Foods and its rivals, 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	2371	8209	8288	402	2.35

Smithfield Foods currently has a consensus price target of $31.50, indicating a potential upside of 44.23%. As a group, “Food Products” companies have a potential upside of 11.51%. Given Smithfield Foods’ stronger consensus rating and higher probable upside, analysts plainly believe Smithfield Foods is more favorable than its rivals.

Earnings & Valuation

This table compares Smithfield Foods and its rivals revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Smithfield Foods	$15.53 billion	$987.00 million	8.15
Smithfield Foods Competitors	$7.24 billion	$702.37 million	-2,368.30

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

Dividends

Smithfield Foods pays an annual dividend of $1.25 per share and has a dividend yield of 5.7%. 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 11.8% and pay out 31.4% of their earnings in the form of a dividend. Smithfield Foods lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Profitability

This table compares Smithfield Foods and its rivals’ 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	-13.53%	-146.29%	-4.56%

Risk & Volatility

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

Summary

Smithfield Foods beats its rivals 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.