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 investment? We will compare the two companies based on the strength of their valuation, risk, dividends, earnings, analyst recommendations, institutional ownership and profitability.

Dividends

Industrias Bachoco, S.A. de C.V. pays an annual dividend of $0.82 per share and has a dividend yield of 1.3%. Hormel Foods Corporation pays an annual dividend of $0.68 per share and has a dividend yield of 2.0%. 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 41.5% 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. Industrias Bachoco, S.A. de C.V. has increased its dividend for 50 consecutive years.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Industrias Bachoco, S.A. de C.V. and Hormel Foods Corporation, as provided 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 6 0 2.60

Hormel Foods Corporation has a consensus price target of $39.78, suggesting a potential upside of 15.80%. 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..

Profitability

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 9.42% 19.57% 13.89%

Earnings and Valuation

This table compares Industrias Bachoco, S.A. de C.V. and Hormel Foods Corporation’s 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. $3.11 billion 1.03 $447.50 million $4.38 14.58
Hormel Foods Corporation $9.40 billion 1.93 $1.40 billion $1.64 20.95

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.

Insider and Institutional Ownership

3.8% of Industrias Bachoco, S.A. de C.V. shares are owned by institutional investors. Comparatively, 38.4% 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 large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Industrias Bachoco, S.A. de C.V. has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500. Comparatively, Hormel Foods Corporation has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500.

Summary

Hormel Foods Corporation beats Industrias Bachoco, S.A. de C.V. on 13 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.

Receive News & Stock Ratings for Industrias Bachoco S.A. de C.V. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Industrias Bachoco S.A. de C.V. and related stocks with our FREE daily email newsletter.