Sanderson Farms Inc

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SAFM : NASDAQ : Consumer Goods
$99.01 up 0.91 | 0.93%
Today's Range: 96.81 - 98.97
Avg. Daily Volume: 407200.0
03/23/17 - 2:49 PM ET

Financial Analysis


SANDERSON FARMS INC's gross profit margin for the first quarter of its fiscal year 2017 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 2.44 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 16.78% 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 Q1 FY17 Q1 FY16
Net Sales ($mil)688.35605.17
EBITDA ($mil)58.5339.68
EBIT ($mil)35.8919.81
Net Income ($mil)23.1710.68


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)225.82155.11
Total Assets ($mil)1451.541260.42
Total Debt ($mil)0.010.0
Equity ($mil)1213.641039.17


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin15.211.56
EBITDA Margin8.56.55
Operating Margin5.213.27
Sales Turnover2.02.17
Return on Assets13.8712.7
Return on Equity16.5915.41
Debt Q1 FY17 Q1 FY16
Current Ratio4.384.31
Debt/Capital0.00.01
Interest Expense0.430.43
Interest Coverage83.0745.97


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)22.7422.57
Div / share0.240.22
EPS1.020.47
Book value / share53.3746.04
Institutional Own % n/a n/a
Avg Daily Volume434919.0649723.0

Valuation


BUY. SANDERSON FARMS INC's P/E ratio indicates a significant discount compared to an average of 31.73 for the Food Products industry and a significant discount compared to the S&P 500 average of 26.73. To use another comparison, its price-to-book ratio of 1.76 indicates a discount versus the S&P 500 average of 2.98 and a significant discount versus the industry average of 5.15. 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 10.54 Peers 31.73   SAFM 6.08 Peers 18.92

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 12.69 Peers 21.06   SAFM NM Peers 1.71

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

SAFM is trading at a significant discount to its peers.

 

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.

SAFM's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
SAFM 1.76 Peers 5.15   SAFM 25.66 Peers 1466.51

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 0.74 Peers 2.41   SAFM 5.76 Peers 8.42

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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