Critical Analysis: Smithfield Foods (NASDAQ:SFD) versus Brasilagro Cia Brasileira De Propriedades Agricolas (NYSE:LND)

Brasilagro Cia Brasileira De Propriedades Agricolas (NYSE:LND) and Smithfield Foods (NASDAQ:SFD) are both consumer staples companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, valuation, risk, earnings and profitability.

Valuation & Earnings

This table compares Brasilagro Cia Brasileira De Propriedades Agricolas and Smithfield Foods”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brasilagro Cia Brasileira De Propriedades Agricolas	$893.73 million	0.41	-$17.03 million	($0.17)	-21.24
Smithfield Foods	$15.53 billion	0.50	$987.00 million	$2.68	7.41

Smithfield Foods has higher revenue and earnings than Brasilagro Cia Brasileira De Propriedades Agricolas. Brasilagro Cia Brasileira De Propriedades Agricolas is trading at a lower price-to-earnings ratio than Smithfield Foods, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and recommmendations for Brasilagro Cia Brasileira De Propriedades Agricolas and Smithfield Foods, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brasilagro Cia Brasileira De Propriedades Agricolas	1	1	0	0	1.50
Smithfield Foods	1	1	4	0	2.50

Smithfield Foods has a consensus target price of $31.00, indicating a potential upside of 56.09%. Given Smithfield Foods’ stronger consensus rating and higher possible upside, analysts clearly believe Smithfield Foods is more favorable than Brasilagro Cia Brasileira De Propriedades Agricolas.

Dividends

Brasilagro Cia Brasileira De Propriedades Agricolas pays an annual dividend of $0.12 per share and has a dividend yield of 3.3%. Smithfield Foods pays an annual dividend of $1.25 per share and has a dividend yield of 6.3%. Brasilagro Cia Brasileira De Propriedades Agricolas pays out -70.6% of its earnings in the form of a dividend. Smithfield Foods pays out 46.6% 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.

Profitability

This table compares Brasilagro Cia Brasileira De Propriedades Agricolas and Smithfield Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Brasilagro Cia Brasileira De Propriedades Agricolas	-9.93%	-4.36%	-2.38%
Smithfield Foods	6.84%	15.55%	8.84%

Volatility and Risk

Brasilagro Cia Brasileira De Propriedades Agricolas has a beta of 0.04, meaning that its share price is 96% less volatile than the S&P 500. Comparatively, Smithfield Foods has a beta of -0.51, meaning that its share price is 151% less volatile than the S&P 500.

Institutional and Insider Ownership

1.1% of Brasilagro Cia Brasileira De Propriedades Agricolas shares are owned by institutional investors. 0.7% of Brasilagro Cia Brasileira De Propriedades Agricolas shares are owned by company insiders. Comparatively, 1.8% of Smithfield Foods shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Smithfield Foods beats Brasilagro Cia Brasileira De Propriedades Agricolas on 13 of the 16 factors compared between the two stocks.

About Brasilagro Cia Brasileira De Propriedades Agricolas

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas engages in the acquisition, development, exploration, and sale of rural properties suitable for agricultural activities in Brazil and internationally. It operates through six segments: Real Estate, Grains, Sugarcane, livestock, Cotton, and Other. The company involved in the cultivation of soybean, corn, sesame, and cotton, as well as sugarcane; and production and sale of beef calves after weaning. It also imports and exports agricultural products, livestock, and forestry activities and inputs; purchases, sells, and/or rents rural/urban properties; provides real estate brokerage services; and manages third-party assets. It operates farms through own and leased lands. BrasilAgro – Companhia Brasileira de Propriedades Agrícolas was incorporated in 2005 and is headquartered in São Paulo, Brazil.

About Smithfield Foods

Smithfield Foods, Inc. produces and markets a variety of fresh meat and packaged meats products both domestically and internationally. The Company operates in four segments: Pork, Hog Production, International and Corporate, each of which consists of a number of subsidiaries, joint ventures and other investments. The Pork segment consists mainly of its three wholly owned United States fresh pork and packaged meats subsidiaries: The Smithfield Packing Company, Inc. (Smithfield Packing), Farmland Foods, Inc. (Farmland Foods) and John Morrell Food Group (John Morrell). The Hog Production segment consists of the Company’s hog production operations located in the United States. On September 2012 (fiscal 2013), the Company acquired a 70% controlling interest in American Skin Food Group, LLC. Effective September 26, 2013, Shuanghui International Holdings Ltd merged with Smithfield Foods Inc, a producer and wholesaler of pork meat products.