Head-To-Head Survey: Post (NYSE:POST) versus Smithfield Foods (NASDAQ:SFD)

Smithfield Foods (NASDAQ:SFD) and Post (NYSE:POST) 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 dividends, institutional ownership, valuation, analyst recommendations, risk, profitability and earnings.

Institutional & Insider Ownership

94.8% of Post shares are held by institutional investors. 1.8% of Smithfield Foods shares are held by insiders. Comparatively, 14.1% of Post shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Smithfield Foods and Post, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smithfield Foods	1	2	4	0	2.43
Post	2	2	4	0	2.25

Smithfield Foods presently has a consensus price target of $29.20, suggesting a potential upside of 54.66%. Post has a consensus price target of $108.00, suggesting a potential upside of 45.53%. Given Smithfield Foods’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Smithfield Foods is more favorable than Post.

Volatility and Risk

Smithfield Foods has a beta of -0.41, meaning that its share price is 141% less volatile than the S&P 500. Comparatively, Post has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500.

Profitability

This table compares Smithfield Foods and Post’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Smithfield Foods	6.84%	15.55%	8.84%
Post	3.48%	13.22%	3.42%

Valuation and Earnings

This table compares Smithfield Foods and Post”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smithfield Foods	$15.53 billion	0.48	$987.00 million	$2.68	7.04
Post	$8.16 billion	0.41	$335.70 million	$5.44	13.64

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

Summary

Smithfield Foods beats Post on 8 of the 13 factors compared between the two stocks.

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.

About Post

Post Holdings, Inc. operates as a consumer packaged goods holding company in the United States and internationally. It operates through four segments: Post Consumer Brands, Weetabix, Foodservice, and Refrigerated Retail. The Post Consumer Brands segment manufactures, markets, and sells branded and private label ready-to-eat (RTE) cereals under Honey Bunches of Oats, Pebbles, and Malt-O-Meal brand names; hot cereal; peanut butter under the Peter Pan brand; and branded and private label dog and cat food products under Rachael Ray Nutrish, Nature's Recipe, 9Lives, Kibbles 'n Bits and Gravy Train brand names. The Weetabix segment primarily manufactures, markets, and distributes branded and private label RTE cereal under Weetabix and Alpen brands; hot cereals and other cereal-based food products; breakfast drinks; protein-based shakes under the UFIT brand, and nutritional snacks, such as muesli. The Foodservice segment produces and distributes egg products primarily under Papetti's and Abbotsford Farms brands, as well as potato products in the foodservice and food ingredient channels. The segment also manufactures certain meat products. The Refrigerated Retail segment produces and distributes side dish, potato, sausage products under Bob Evans, Bob Evans Farms, and Simply Potatoes brands; eggs and egg products under Bob Evans Egg Whites and Egg Beaters brands; and cheese, and other dairy and refrigerated products under Crystal Farms brand. It serves grocery stores, mass merchandise customers, supercenters, club stores, natural/specialty stores, dollar stores, discounters, wholesalers, convenience stores, pet supply retailers, drug store customers, foodservice distributors, and national restaurant chains, as well as sells its products in the military, ecommerce, and foodservice channels. The company was founded in 1895 and is headquartered in Saint Louis, Missouri.