Service Co. International (NYSE:SCI) and Industrias Bachoco (NYSE:IBA) are both mid-cap consumer staples companies, but which is the better business? We will compare the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, dividends, analyst recommendations and risk.
Risk & Volatility
Service Co. International has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500. Comparatively, Industrias Bachoco has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.
Institutional and Insider Ownership
83.4% of Service Co. International shares are owned by institutional investors. Comparatively, 3.0% of Industrias Bachoco shares are owned by institutional investors. 4.7% of Service Co. International shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Dividends
Service Co. International pays an annual dividend of $0.84 per share and has a dividend yield of 1.6%. Industrias Bachoco pays an annual dividend of $0.66 per share and has a dividend yield of 1.5%. Service Co. International pays out 44.2% of its earnings in the form of a dividend. Industrias Bachoco pays out 19.8% 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. Service Co. International has increased its dividend for 1 consecutive years. Service Co. International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a breakdown of current ratings and target prices for Service Co. International and Industrias Bachoco, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Service Co. International | 0 | 0 | 4 | 0 | 3.00 |
Industrias Bachoco | 0 | 0 | 1 | 0 | 3.00 |
Service Co. International presently has a consensus target price of $49.25, indicating a potential downside of 4.74%. Industrias Bachoco has a consensus target price of $50.00, indicating a potential upside of 12.23%. Given Industrias Bachoco's higher possible upside, analysts plainly believe Industrias Bachoco is more favorable than Service Co. International.
Profitability
This table compares Service Co. International and Industrias Bachoco's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Service Co. International | 13.62% | 24.63% | 3.24% |
Industrias Bachoco | 4.54% | 7.03% | 5.16% |
Earnings and Valuation
This table compares Service Co. International and Industrias Bachoco's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Service Co. International | $3.23 billion | 2.71 | $369.60 million | $1.90 | 27.21 |
Industrias Bachoco | $3.26 billion | 0.68 | $167.44 million | $3.34 | 13.34 |
Service Co. International has higher earnings, but lower revenue than Industrias Bachoco. Industrias Bachoco is trading at a lower price-to-earnings ratio than Service Co. International, indicating that it is currently the more affordable of the two stocks.
Summary
Service Co. International beats Industrias Bachoco on 10 of the 16 factors compared between the two stocks.