Sanderson Farms Inc

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SAFM : NASDAQ : Consumer Goods
$93.34 -0.06 | -0.064%
Today's Range: 92.77 - 93.91
Avg. Daily Volume: 632800.0
01/18/17 - 3:19 PM ET

Financial Analysis


SANDERSON FARMS INC's gross profit margin for the fourth quarter of its fiscal year 2016 has significantly increased when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. SANDERSON FARMS INC is extremely liquid. Currently, the Quick Ratio is 2.42 which clearly shows the ability to cover any short-term cash needs. SAFM managed to increase the liquidity from the same period a year ago, despite already having very strong liquidity to begin with. This would indicate improved cash flow.

During the same period, stockholders' equity ("net worth") has increased by 15.57% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)790.81679.59
EBITDA ($mil)137.9163.76
EBIT ($mil)115.6643.59
Net Income ($mil)75.9627.37


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)234.11196.66
Total Assets ($mil)1422.71251.46
Total Debt ($mil)0.010.0
Equity ($mil)1190.261029.86


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin23.1315.29
EBITDA Margin17.439.38
Operating Margin14.636.41
Sales Turnover1.982.24
Return on Assets13.2817.25
Return on Equity15.8720.97
Debt Q4 FY16 Q4 FY15
Current Ratio4.143.49
Debt/Capital0.00.01
Interest Expense0.430.61
Interest Coverage269.6171.22


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)22.6922.52
Div / share1.460.72
EPS3.361.22
Book value / share52.4545.73
Institutional Own % n/a n/a
Avg Daily Volume635794.0406151.0

Valuation


BUY. SANDERSON FARMS INC's P/E ratio indicates a significant discount compared to an average of 36.79 for the Food Products industry and a significant discount compared to the S&P 500 average of 25.49. To use another comparison, its price-to-book ratio of 1.78 indicates a discount versus the S&P 500 average of 2.84 and a significant discount versus the industry average of 4.93. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, SANDERSON FARMS INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
SAFM 11.17 Peers 36.79   SAFM 7.24 Peers 17.98

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

SAFM is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

SAFM is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
SAFM 11.32 Peers 22.09   SAFM NA Peers 1.93

Neutral. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth potential.

Ratio not available.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

Ratio not available.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
SAFM 1.78 Peers 4.93   SAFM -11.91 Peers 203.26

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

SAFM is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, SAFM is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
SAFM 0.75 Peers 2.30   SAFM 0.44 Peers 25.88

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

SAFM is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

SAFM significantly trails its peers on the basis of sales growth

 

 

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