Head to Head Review: Sanderson Farms (SAFM) versus Industrias Bachoco, S.A. de C.V. (IBA)
Sanderson Farms (NASDAQ: SAFM) and Industrias Bachoco, S.A. de C.V. (NYSE:IBA) are both mid-cap consumer staples companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, risk, dividends, earnings and valuation.
Sanderson Farms pays an annual dividend of $0.96 per share and has a dividend yield of 0.7%. Industrias Bachoco, S.A. de C.V. pays an annual dividend of $0.82 per share and has a dividend yield of 1.3%. Sanderson Farms pays out 7.7% of its earnings in the form of a dividend. Industrias Bachoco, S.A. de C.V. pays out 18.7% 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.
This is a summary of current ratings and target prices for Sanderson Farms and Industrias Bachoco, S.A. de C.V., 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|
Sanderson Farms currently has a consensus price target of $124.20, indicating a potential downside of 11.47%. Given Sanderson Farms’ higher probable upside, equities research analysts clearly believe Sanderson Farms is more favorable than Industrias Bachoco, S.A. de C.V..
This table compares Sanderson Farms and Industrias Bachoco, S.A. de C.V.’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%|
Risk and Volatility
Sanderson Farms has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500. Comparatively, Industrias Bachoco, S.A. de C.V. has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500.
Valuation and Earnings
This table compares Sanderson Farms and Industrias Bachoco, S.A. de C.V.’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Sanderson Farms||$3.21 billion||0.99||$527.25 million||$12.41||11.30|
|Industrias Bachoco, S.A. de C.V.||$3.10 billion||1.01||$446.06 million||$4.38||14.34|
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.
Insider & Institutional Ownership
100.0% of Sanderson Farms shares are held by institutional investors. Comparatively, 3.8% of Industrias Bachoco, S.A. de C.V. shares are held by institutional investors. 5.7% of Sanderson Farms shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Sanderson Farms beats Industrias Bachoco, S.A. de C.V. on 12 of the 15 factors compared between the two stocks.
Sanderson Farms Company Profile
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.
Industrias Bachoco, S.A. de C.V. Company Profile
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.
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