Critical Comparison: Hormel Foods (NYSE:HRL) and JBS (OTCMKTS:JBSAY)

JBS (OTCMKTS:JBSAY) and Hormel Foods (NYSE:HRL) are both large-cap consumer staples companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, analyst recommendations, profitability and institutional ownership.

Insider & Institutional Ownership

0.1% of JBS shares are held by institutional investors. Comparatively, 41.0% of Hormel Foods shares are held by institutional investors. 0.7% of Hormel Foods shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

JBS has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500. Comparatively, Hormel Foods has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for JBS and Hormel Foods, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
JBS	0	0	2	1	3.33
Hormel Foods	0	4	2	1	2.57

Hormel Foods has a consensus target price of $32.86, indicating a potential upside of 7.69%. Given Hormel Foods’ higher probable upside, analysts plainly believe Hormel Foods is more favorable than JBS.

Profitability

This table compares JBS and Hormel Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
JBS	2.46%	21.85%	4.68%
Hormel Foods	6.27%	10.20%	6.11%

Dividends

JBS pays an annual dividend of $2.08 per share and has a dividend yield of 14.4%. Hormel Foods pays an annual dividend of $1.16 per share and has a dividend yield of 3.8%. JBS pays out 118.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hormel Foods pays out 85.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hormel Foods has increased its dividend for 60 consecutive years.

Earnings and Valuation

This table compares JBS and Hormel Foods”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
JBS	$77.18 billion	0.21	$1.77 billion	$1.76	8.20
Hormel Foods	$11.92 billion	1.41	$805.04 million	$1.36	22.43

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

Summary

Hormel Foods beats JBS on 9 of the 16 factors compared between the two stocks.

About JBS

JBS S.A., together with its subsidiaries, engages in the processing of animal protein worldwide. The company trades in beef, pork, chicken, poultry, fish, and lamb products; cooked frozen meat; plant based products; and other food products. It produces and commercializes leather, steel cans, plastic resin, personal care and cleaning products, and collagen, as well as wet blue leather, semi-finished, and finished leather products. In addition, it is involved in transportation, cold storage, industrial waste management solutions, recycling, and produces and commercializes electric power. Further, the company engages in the production and commercialization of raw ham and cooked ham; purchases and sells soybeans, tallow, palm oil, and caustic soda; and operates distribution centers and harbors. Additionally, it produces beef jerky; offers cattle fattening and warehousing services; operates logistics; and trades in by products from processing. The company was formerly known as Friboi Ltda. JBS S.A. was founded in 1953 and is headquartered in São Paulo, Brazil.

About Hormel Foods

Hormel Foods Corporation develops, processes, and distributes various meat, nuts, and other food products to retail, foodservice, deli, and commercial customers in the United States and internationally. It operates through three segments: Retail, Foodservice, and International segments. The company provides various perishable products that include fresh meats, frozen items, refrigerated meal solutions, sausages, hams, guacamoles, and bacons; and shelf-stable products comprising canned luncheon meats, nut butters, snack nuts, chili, shelf-stable microwaveable meals, hash, stews, tortillas, salsas, tortilla chips, nutritional food supplements, and others. It sells its products under the HORMEL, ALWAYS TENDER, APPLEGATE, AUSTIN BLUES, BACON 1, BLACK LABEL, BREAD READY, BURKE, CAFÉ H, CERATTI, CHI-CHI'S, COLUMBUS, COMPLEATS, CORN NUTS, CURE 81, DAN'S PRIZE, DI LUSSO, DINTY MOORE, DON MIGUEL, DOÑA MARIA, EMBASA, FAST N EASY, FIRE BRAISED, FONTANINI, HAPPY LITTLE PLANTS, HERDEZ, HORMEL GATHERINGS, HORMEL SQUARE TABLE, HORMEL VITAL CUISINE, HOUSE OF TSANG, JENNIE-O, JUSTIN'S, LA VICTORIA, LAYOUT, LLOYD'S, MARY KITCHEN, MR. PEANUT, NATURAL CHOICE, NUT-RITION, OLD SMOKEHOUSE, OVEN READY, PILLOW PACK, PLANTERS, ROSA GRANDE, SADLER'S SMOKEHOUSE, SKIPPY, SPAM, SPECIAL RECIPE, THICK & EASY, VALLEY FRESH, AND WHOLLY brands through sales personnel, independent brokers, and distributors. The company was formerly known as Geo. A. Hormel & Company and changed its name to Hormel Foods Corporation in January 1995. Hormel Foods Corporation was founded in 1891 and is headquartered in Austin, Minnesota.