Tyson Foods (NYSE:TSN) and McCormick & Company, Incorporated (NYSE:MKC) are both large-cap consumer staples companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, institutional ownership, earnings and profitability.
Dividends
Tyson Foods pays an annual dividend of $1.78 per share and has a dividend yield of 2.3%. McCormick & Company, Incorporated pays an annual dividend of $1.36 per share and has a dividend yield of 1.5%. Tyson Foods pays out 31.6% 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. Tyson Foods has increased its dividend for 9 consecutive years and McCormick & Company, Incorporated has increased its dividend for 36 consecutive years. Tyson Foods is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
Tyson Foods has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, McCormick & Company, Incorporated has a beta of 0.44, suggesting that its share price is 56% less volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings and price targets for Tyson Foods and McCormick & Company, Incorporated, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Tyson Foods | 0 | 5 | 4 | 0 | 2.44 |
McCormick & Company, Incorporated | 0 | 3 | 2 | 0 | 2.40 |
Tyson Foods currently has a consensus price target of $75.1429, indicating a potential downside of 4.93%. McCormick & Company, Incorporated has a consensus price target of $92.40, indicating a potential upside of 1.07%. Given McCormick & Company, Incorporated's higher probable upside, analysts clearly believe McCormick & Company, Incorporated is more favorable than Tyson Foods.
Institutional & Insider Ownership
63.7% of Tyson Foods shares are owned by institutional investors. Comparatively, 37.5% of McCormick & Company, Incorporated shares are owned by institutional investors. 1.8% of Tyson Foods 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 endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares Tyson Foods and McCormick & Company, Incorporated's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Tyson Foods | 4.96% | 13.79% | 6.01% |
McCormick & Company, Incorporated | 13.75% | 20.93% | 7.24% |
Valuation and Earnings
This table compares Tyson Foods and McCormick & Company, Incorporated's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Tyson Foods | $43.19 billion | 0.67 | $2.14 billion | $5.64 | 14.01 |
McCormick & Company, Incorporated | $5.35 billion | 4.57 | $702.70 million | $2.67 | 34.24 |
Tyson Foods has higher revenue and earnings than McCormick & Company, Incorporated. Tyson Foods 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.
Summary
Tyson Foods beats McCormick & Company, Incorporated on 9 of the 17 factors compared between the two stocks.