Industrias Bachoco, S.A. de C.V. (NYSE: IBA) and Sanderson Farms (NASDAQ:SAFM) are both mid-cap consumer staples companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, dividends, analyst recommendations, profitability and earnings.
Earnings & Valuation
This table compares Industrias Bachoco, S.A. de C.V. and Sanderson Farms’ top-line 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||1.09||$446.78 million||$4.38||15.36|
|Sanderson Farms||$3.21 billion||1.16||$527.25 million||$12.41||13.20|
Sanderson Farms has higher revenue and earnings than Industrias Bachoco, S.A. de C.V.. Sanderson Farms is trading at a lower price-to-earnings ratio than Industrias Bachoco, S.A. de C.V., indicating that it is currently the more affordable of the two stocks.
Industrias Bachoco, S.A. de C.V. pays an annual dividend of $0.82 per share and has a dividend yield of 1.2%. Sanderson Farms pays an annual dividend of $0.96 per share and has a dividend yield of 0.6%. Industrias Bachoco, S.A. de C.V. pays out 18.7% of its earnings in the form of a dividend. Sanderson Farms pays out 7.7% 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.
Insider and Institutional Ownership
3.8% of Industrias Bachoco, S.A. de C.V. shares are owned by institutional investors. Comparatively, 100.0% of Sanderson Farms shares are owned by institutional investors. 5.7% of Sanderson Farms shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a breakdown of current recommendations and price targets for Industrias Bachoco, S.A. de C.V. and Sanderson Farms, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Industrias Bachoco, S.A. de C.V.||0||0||0||0||N/A|
Sanderson Farms has a consensus price target of $124.20, suggesting a potential downside of 24.19%. Given Sanderson Farms’ higher probable upside, analysts clearly believe Sanderson Farms is more favorable than Industrias Bachoco, S.A. de C.V..
Volatility & Risk
Industrias Bachoco, S.A. de C.V. has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500. Comparatively, Sanderson Farms has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500.
This table compares Industrias Bachoco, S.A. de C.V. and Sanderson Farms’ 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%|
Sanderson Farms beats Industrias Bachoco, S.A. de C.V. on 13 of the 15 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 Sanderson Farms
Sanderson Farms, Inc. is a poultry processing company. The Company is engaged in the production, processing, marketing and distribution of fresh and frozen chicken, and also preparation, processing, marketing and distribution of processed and minimally prepared chicken. It sells ice pack, chill pack, bulk pack and frozen chicken, in whole, cut-up and boneless form, under the Sanderson Farms brand name to retailers, distributors, casual dining operators, customers reselling frozen chicken into export markets. The Company, through its subsidiaries, Sanderson Farms, Inc. (Production Division) and Sanderson Farms, Inc. (Processing Division), conducts its chicken operations. Sanderson Farms, Inc. (Production Division) is engaged in the production of chickens to the broiler-stage. Sanderson Farms, Inc. (Foods Division) is engaged in the processing, sale and distribution of chickens. The Company, through Sanderson Farms, Inc. (Foods Division), conducts its prepared chicken business.
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