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

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

Insider and Institutional Ownership

41.0% of Hormel Foods shares are owned by institutional investors. Comparatively, 0.1% of JBS shares are owned by institutional investors. 0.7% of Hormel Foods shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

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

Analyst Recommendations

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

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

Hormel Foods presently has a consensus target price of $32.86, suggesting a potential upside of 12.35%. Given Hormel Foods’ higher possible upside, equities analysts clearly believe Hormel Foods is more favorable than JBS.

Volatility and Risk

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

Dividends

Hormel Foods pays an annual dividend of $1.16 per share and has a dividend yield of 4.0%. JBS pays an annual dividend of $2.08 per share and has a dividend yield of 14.4%. 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. 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 has increased its dividend for 60 consecutive years.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hormel Foods	$11.92 billion	1.35	$805.04 million	$1.36	21.50
JBS	$77.18 billion	0.21	$1.77 billion	$1.76	8.20

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 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.

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.