Sanderson Farms (NASDAQ:SAFM) and McCormick & Company, Incorporated (NYSE:MKC) 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, earnings, profitability, risk, analyst recommendations, valuation and dividends.
Analyst Recommendations
This is a summary of recent ratings and price targets for Sanderson Farms and McCormick & Company, Incorporated, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Sanderson Farms | 0 | 6 | 3 | 0 | 2.33 |
McCormick & Company, Incorporated | 2 | 4 | 3 | 0 | 2.11 |
Sanderson Farms currently has a consensus price target of $149.50, indicating a potential downside of 4.84%. McCormick & Company, Incorporated has a consensus price target of $81.5556, indicating a potential downside of 3.86%. Given McCormick & Company, Incorporated's higher possible upside, analysts plainly believe McCormick & Company, Incorporated is more favorable than Sanderson Farms.
Institutional & Insider Ownership
85.8% of Sanderson Farms shares are owned by institutional investors. Comparatively, 37.5% of McCormick & Company, Incorporated shares are owned by institutional investors. 5.4% of Sanderson Farms shares are owned by company insiders. Comparatively, 11.0% of McCormick & Company, Incorporated shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Volatility & Risk
Sanderson Farms has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, McCormick & Company, Incorporated has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500.
Earnings & Valuation
This table compares Sanderson Farms and McCormick & Company, Incorporated's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Sanderson Farms | $3.56 billion | 0.98 | $28.27 million | ($0.41) | -383.20 |
McCormick & Company, Incorporated | $5.35 billion | 4.21 | $702.70 million | $2.67 | 31.55 |
McCormick & Company, Incorporated has higher revenue and earnings than Sanderson Farms. Sanderson Farms is trading at a lower price-to-earnings ratio than McCormick & Company, Incorporated, indicating that it is currently the more affordable of the two stocks.
Dividends
Sanderson Farms pays an annual dividend of $1.76 per share and has a dividend yield of 1.1%. McCormick & Company, Incorporated pays an annual dividend of $1.36 per share and has a dividend yield of 1.6%. Sanderson Farms pays out -429.3% of its earnings in the form of a dividend. McCormick & Company, Incorporated pays out 50.9% 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. Sanderson Farms has raised its dividend for 1 consecutive years.
Profitability
This table compares Sanderson Farms and McCormick & Company, Incorporated's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Sanderson Farms | 0.79% | -0.66% | -0.48% |
McCormick & Company, Incorporated | 13.75% | 20.93% | 7.24% |
Summary
McCormick & Company, Incorporated beats Sanderson Farms on 10 of the 16 factors compared between the two stocks.