Tyson Foods (TSN) & Bunge (BG) Financial Analysis
Bunge (NYSE:BG) and Tyson Foods (NYSE:TSN) are both basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.
Bunge pays an annual dividend of $2.00 per share and has a dividend yield of 3.8%. Tyson Foods pays an annual dividend of $1.50 per share and has a dividend yield of 2.3%. Bunge pays out 73.5% of its earnings in the form of a dividend. Tyson Foods pays out 24.4% 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. Bunge has increased its dividend for 17 consecutive years and Tyson Foods has increased its dividend for 7 consecutive years. Bunge is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Bunge and Tyson Foods’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings and Valuation
This table compares Bunge and Tyson Foods’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Bunge||$45.74 billion||0.16||$267.00 million||$2.72||19.14|
|Tyson Foods||$40.05 billion||0.59||$3.02 billion||$6.16||10.53|
Tyson Foods has lower revenue, but higher earnings than Bunge. Tyson Foods is trading at a lower price-to-earnings ratio than Bunge, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Bunge has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500. Comparatively, Tyson Foods has a beta of 0.46, indicating that its share price is 54% less volatile than the S&P 500.
This is a breakdown of recent recommendations for Bunge and Tyson Foods, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Bunge presently has a consensus price target of $74.60, suggesting a potential upside of 43.32%. Tyson Foods has a consensus price target of $70.40, suggesting a potential upside of 8.52%. Given Bunge’s stronger consensus rating and higher possible upside, equities analysts clearly believe Bunge is more favorable than Tyson Foods.
Institutional & Insider Ownership
81.5% of Bunge shares are held by institutional investors. Comparatively, 69.6% of Tyson Foods shares are held by institutional investors. 1.3% of Bunge shares are held by insiders. Comparatively, 1.7% of Tyson Foods shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Tyson Foods beats Bunge on 9 of the 17 factors compared between the two stocks.
Bunge Limited operates as an agribusiness and food company worldwide. It operates in five segments: Agribusiness, Edible Oil Products, Milling Products, Sugar and Bioenergy, and Fertilizer. The Agribusiness segment purchases, stores, transports, processes, and sells agricultural commodities and commodity products, including oilseeds primarily soybeans, rapeseed, canola, and sunflower seeds, as well as grains primarily wheat and corn; and vegetable oils and protein meals. It provides its products for animal feed manufacturers, livestock producers, wheat and corn millers, and other oilseed processors, as well as third-party edible oil processing companies; and for industrial and biodiesel production applications. The Edible Oil Products segment provides packaged and bulk oils and fats, including cooking oils, shortenings, margarines, mayonnaise, and others for baked goods companies, snack food producers, confectioners, restaurant chains, foodservice operators, infant nutrition companies, and other food manufacturers, as well as grocery chains, wholesalers, distributors, and other retailers. The Milling Products segment offers wheat flours and bakery mixes; corn milling products that include dry-milled corn meals and flours, wet-milled masa and flours, and flaking and brewer's grits, as well as soy-fortified corn meal, corn-soy blends, and other products; whole grain and fiber ingredients; and milled rice products. The Sugar and Bioenergy segment produces sugar and ethanol; and generates electricity from burning sugarcane bagasse. As of December 31, 2018, it had a total installed cogeneration capacity of approximately 322 megawatts. The Fertilizer segment offers nitrogen, phosphate, and potassium fertilizers; and SSP, ammonia, ammonium thiosulfate, monoammonium phosphate, diammonium phosphate, triple supersphosphate, urea, urea-ammonium nitrate, ammonium sulfate, and potassium chloride. The company was founded in 1818 and is headquartered in White Plains, New York.
About Tyson Foods
Tyson Foods, Inc., together with its subsidiaries, operates as a food company worldwide. It operates through four segments: Beef, Pork, Chicken, and Prepared Foods. The company processes live fed cattle and live market hogs; fabricates dressed beef and pork carcasses into primal and sub-primal meat cuts, as well as case ready beef and pork, and fully-cooked meats; and raises and processes chickens into fresh, frozen, and value-added chicken products. It also supplies poultry breeding stock; sells allied products, such as hides and meats; and manufactures and markets frozen and refrigerated food products, including ready-to-eat sandwiches, flame-grilled hamburgers, Philly steaks, pepperoni, bacon, breakfast sausage, turkey, lunchmeat, hot dogs, flour and corn tortilla products, appetizers, snacks, prepared meals, ethnic foods, side dishes, meat dishes, breadsticks, and processed meats. The company offers its products primarily under the Tyson, Jimmy Dean, Hillshire Farm, Ball Park, Wright, Aidells, ibp, State Fair, Gallo Salame, and Golden Island brands. It sells its products through its sales staff to grocery retailers, grocery wholesalers, meat distributors, warehouse club stores, military commissaries, industrial food processing companies, chain restaurants or their distributors, live markets, international export companies, and domestic distributors who serve restaurants and foodservice operations, such as plant and school cafeterias, convenience stores, hospitals, and other vendors, as well as through independent brokers and trading companies. The company was founded in 1935 and is headquartered in Springdale, Arkansas.
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