Critical Analysis: AdvancePierre Foods (APFH) & Penford (PENX)

AdvancePierre Foods (NYSE: APFH) and Penford (NASDAQ:PENX) are both non-cyclical consumer goods & services companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, dividends, risk and institutional ownership.

Profitability

This table compares AdvancePierre Foods and Penford’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AdvancePierre Foods 7.00% N/A 8.96%
Penford 2.06% 8.92% 3.56%

Analyst Ratings

This is a breakdown of recent ratings and target prices for AdvancePierre Foods and Penford, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AdvancePierre Foods 0 3 0 0 2.00
Penford 0 0 0 0 N/A

AdvancePierre Foods currently has a consensus price target of $37.67, suggesting a potential downside of 6.42%. Given AdvancePierre Foods’ higher probable upside, research analysts plainly believe AdvancePierre Foods is more favorable than Penford.

Earnings and Valuation

This table compares AdvancePierre Foods and Penford’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AdvancePierre Foods N/A N/A N/A $2.05 19.63
Penford N/A N/A N/A $0.72 26.36

AdvancePierre Foods is trading at a lower price-to-earnings ratio than Penford, indicating that it is currently the more affordable of the two stocks.

Dividends

AdvancePierre Foods pays an annual dividend of $0.64 per share and has a dividend yield of 1.6%. Penford does not pay a dividend. AdvancePierre Foods pays out 31.2% of its earnings in the form of a dividend.

Summary

AdvancePierre Foods beats Penford on 5 of the 8 factors compared between the two stocks.

About AdvancePierre Foods

AdvancePierre Foods Holdings, Inc. is a producer and distributor of ready-to-eat sandwiches, sandwich components and other entrees and snacks. The Company operates through four segments. The Foodservice segment’s portfolio of products includes breakfast sandwiches, peanut butter and jelly sandwiches, Philly steaks, fully cooked hamburger-patties, country-fried steak, stuffed entrees and chicken tenders. The Retail segment sells both branded and private label ready-to-eat sandwiches, such as grilled chicken sandwiches and stuffed pockets; sandwich components, such as chicken patties, and other entrees and snacks, such as stuffed chicken breasts. The Convenience segment sells customized ready-to-eat sandwiches, such as breakfast sandwiches and burgers; sandwich components, such as chicken patties, and other entrees and snacks, such as cinnamon dough bites. The Industrial segment supplies other food producers, such as packaged food companies under short-term co-manufacturing agreements.

About Penford

Penford Corporation (Penford) is a developer, manufacturer and marketer of natural-based ingredient systems for food and industrial applications, including fuel grade ethanol. The Company has research and development capabilities, which are used in understanding the complex chemistry of carbohydrate-based materials and in developing applications to address customer needs. Penford operates in two business segments: Industrial Ingredients and Food Ingredients. Industrial Ingredients segment is a supplier of chemically modified starches to the paper and packaging industries. Industrial Ingredients also produces food grade corn starch for sale by the Company’s Food Ingredients business. Food Ingredients segment is a developer and manufacturer of specialty starches and dextrins to the food manufacturing and food service industries. This business is engaged is in leveraging the inherent characteristics from potato, corn, tapioca and rice to help improve its customers’ product performance.

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