Tyson Foods (NYSE:TSN) and Mondelez International (NASDAQ:MDLZ) are both large-cap consumer staples companies, but which is the better business? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, risk, valuation, institutional ownership and dividends.
Institutional and Insider Ownership
66.2% of Tyson Foods shares are owned by institutional investors. Comparatively, 75.5% of Mondelez International shares are owned by institutional investors. 1.7% of Tyson Foods shares are owned by company insiders. Comparatively, 1.3% of Mondelez International shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Volatility and Risk
Tyson Foods has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500. Comparatively, Mondelez International has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.
Profitability
This table compares Tyson Foods and Mondelez International's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Tyson Foods | 4.52% | 13.01% | 5.57% |
| Mondelez International | 14.24% | 13.73% | 5.70% |
Earnings and Valuation
This table compares Tyson Foods and Mondelez International's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Tyson Foods | $42.41 billion | 0.50 | $2.02 billion | $5.46 | 10.71 |
| Mondelez International | $25.87 billion | 2.86 | $3.87 billion | $2.47 | 20.90 |
Mondelez International has lower revenue, but higher earnings than Tyson Foods. Tyson Foods is trading at a lower price-to-earnings ratio than Mondelez International, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current recommendations and price targets for Tyson Foods and Mondelez International, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Tyson Foods | 1 | 5 | 7 | 0 | 2.46 |
| Mondelez International | 0 | 2 | 14 | 0 | 2.88 |
Tyson Foods currently has a consensus price target of $77.8333, indicating a potential upside of 33.16%. Mondelez International has a consensus price target of $61.1875, indicating a potential upside of 18.53%. Given Tyson Foods' higher probable upside, research analysts clearly believe Tyson Foods is more favorable than Mondelez International.
Dividends
Tyson Foods pays an annual dividend of $1.68 per share and has a dividend yield of 2.9%. Mondelez International pays an annual dividend of $1.14 per share and has a dividend yield of 2.2%. Tyson Foods pays out 30.8% of its earnings in the form of a dividend. Mondelez International pays out 46.2% 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. Tyson Foods has increased its dividend for 8 consecutive years and Mondelez International has increased its dividend for 6 consecutive years. Tyson Foods is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Mondelez International beats Tyson Foods on 9 of the 17 factors compared between the two stocks.
