NasdaqGS:SAFM

Stock Analysis Report

Executive Summary

Sanderson Farms, Inc., an integrated poultry processing company, produces, processes, markets, and distributes fresh, frozen, and prepared chicken products in the United States.

Snowflake

Fundamentals

Flawless balance sheet and fair value.


Similar Companies

Share Price & News

How has Sanderson Farms's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

5.8%

SAFM

-0.7%

US Food

1.3%

US Market


1 Year Return

49.2%

SAFM

2.6%

US Food

5.9%

US Market

Return vs Industry: SAFM exceeded the US Food industry which returned 2.6% over the past year.

Return vs Market: SAFM exceeded the US Market which returned 5.9% over the past year.


Shareholder returns

SAFMIndustryMarket
7 Day5.8%-0.7%1.3%
30 Day-0.06%-2.0%-1.9%
90 Day16.5%0.3%-1.8%
1 Year50.6%49.2%5.6%2.6%8.3%5.9%
3 Year68.7%62.7%-1.9%-10.5%45.6%36.2%
5 Year99.7%85.2%46.7%29.2%66.1%47.9%

Price Volatility Vs. Market

How volatile is Sanderson Farms's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Sanderson Farms undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: SAFM ($149.84) is trading below our estimate of fair value ($1066.03)

Significantly Undervalued: SAFM is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SAFM is poor value based on its PE Ratio (101.2x) compared to the Food industry average (25.4x).

PE vs Market: SAFM is poor value based on its PE Ratio (101.2x) compared to the US market (17.5x).


Price to Earnings Growth Ratio

Low PEG Ratio: SAFM is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: SAFM is overvalued based on its PB Ratio (2.3x) compared to the US Food industry average (2.1x).


Next Steps

Future Growth

How is Sanderson Farms forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

106.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SAFM's forecast earnings growth (106.8% per year) is above the savings rate (2.7%).

Earnings vs Market: SAFM's earnings (106.8% per year) are forecast to grow faster than the US market (14.4% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SAFM's revenue (6.6% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: SAFM's revenue (6.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: SAFM's Return on Equity is forecast to be low in 3 years time (15.5%).


Next Steps

Past Performance

How has Sanderson Farms performed over the past 5 years?

-18.8%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: SAFM's earnings have declined by -18.8% per year over the past 5 years.

Accelerating Growth: SAFM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SAFM had negative earnings growth (-81.4%) over the past year, making it difficult to compare to the Food industry average (-22.7%).


Return on Equity

High ROE: SAFM's Return on Equity (2.3%) is considered low.


Return on Assets

ROA vs Industry: SAFM's Return on Assets is below or equal to the Food industry average last year.


Return on Capital Employed

ROCE Improving: SAFM's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Sanderson Farms's financial position?


Financial Position Analysis

Short Term Liabilities: SAFM's short term assets ($585.9M) exceeds its short term liabilities ($199.0M)

Long Term Liabilities: SAFM's short term assets (585.9M) exceeds its long term liabilities (124.5M)


Debt to Equity History and Analysis

Debt Level: SAFM's debt to equity ratio (2.1%) is considered satisfactory

Reducing Debt: SAFM's debt to equity ratio has reduced from 2.4% to 2.1% over the past 5 years.

Debt Coverage: SAFM's debt is well covered by operating cash flow (598.6%).

Interest Coverage: SAFM's interest payments on its debt are well covered by EBIT (15x coverage).


Balance Sheet

Inventory Level: SAFM has a high level of physical assets or inventory.

Debt Coverage by Assets: SAFM's debt is covered by short term assets (assets are 19.530760x debt).


Next Steps

Dividend

What is Sanderson Farms's current dividend yield, its reliability and sustainability?

0.85%

Current Dividend Yield


Dividend Yield vs Market

company0.9%marketbottom25%1.5%markettop25%3.8%industryaverage2.8%forecastin3Years0.9%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: SAFM's dividend (0.85%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.47%).

High Dividend: SAFM's dividend (0.85%) is low compared to the top 25% of dividend payers in the US market (3.77%).

Stable Dividend: SAFM's dividend payments have been volatile in the past 10 years.

Growing Dividend: SAFM's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (86.4%), SAFM's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SAFM's dividends in 3 years are forecast to be thoroughly covered by earnings (13.1% payout ratio).


Next Steps

Management

What is the CEO of Sanderson Farms's salary, the management and board of directors tenure and is there insider trading?

20.5yrs

Average management tenure


CEO

Joe Sanderson (71yo)

29.9yrs

Tenure

US$4,226,166

Compensation

Mr. Joe F. Sanderson, Jr. has been the Chairman of Sanderson Farms, Inc. since January 8, 1998 and as its Chief Executive Officer since November 1, 1989. Mr. Sanderson served as the President of Sanderson  ...


CEO Compensation Analysis

Compensation vs. Market: Joe's total compensation ($USD4.23M) is about average for companies of similar size in the US market ($USD5.10M).

Compensation vs Earnings: Joe's compensation has been consistent with company performance over the past year.


Management Age and Tenure

20.5yrs

Average Tenure

64.5yo

Average Age

Experienced Management: SAFM's management team is seasoned and experienced (20.5 years average tenure).


Board Age and Tenure

17.8yrs

Average Tenure

67yo

Average Age

Experienced Board: SAFM's board of directors are seasoned and experienced ( 17.8 years average tenure).


Insider Trading

Insider Buying: SAFM insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$1,551,66726 Sep 19
Lampkin Butts
EntityIndividual
Role
Member of the Board of Directors
President
Shares10,000
Max PriceUS$155.65
SellUS$268,11720 Sep 19
Robert Khayat
EntityIndividual
Shares1,726
Max PriceUS$155.34
SellUS$76,93205 Sep 19
Phil Livingston
EntityIndividual
Role
Lead Director
Lead Director
Shares500
Max PriceUS$153.89
SellUS$73,64030 Aug 19
John Bierbusse
EntityIndividual
Shares500
Max PriceUS$147.28
SellUS$1,278,23619 Mar 19
Lampkin Butts
EntityIndividual
Role
Member of the Board of Directors
President
Shares10,000
Max PriceUS$129.07
SellUS$77,13728 Feb 19
John Bierbusse
EntityIndividual
Shares677
Max PriceUS$113.94
SellUS$29,10427 Dec 18
Gail Pittman
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares300
Max PriceUS$97.08

Ownership Breakdown


Management Team

  • Joe Sanderson (71yo)

    Chairman & CEO

    • Tenure: 29.9yrs
    • Compensation: US$4.23m
  • Mike Cockrell (61yo)

    CFO, Treasurer & Director

    • Tenure: 21.7yrs
    • Compensation: US$1.23m
  • Lampkin Butts (68yo)

    President

    • Tenure: 21.7yrs
    • Compensation: US$1.44m
  • Robin Robinson

    Director of Organization Development & Corporate Communication

    • Tenure: 0yrs
  • Bob Rosa

    Chief Financial Analyst

    • Tenure: 0yrs
  • Brian Romano

    Director of Administration & Human Resources

    • Tenure: 0yrs
  • Tim Rigney (55yo)

    Corporate Secretary

    • Tenure: 6.9yrs
    • Compensation: US$438.55k
  • Hilary Burroughs

    Director of Marketing

    • Tenure: 0yrs

Board Members

  • Joe Sanderson (71yo)

    Chairman & CEO

    • Tenure: 29.9yrs
    • Compensation: US$4.23m
  • Mike Cockrell (61yo)

    CFO, Treasurer & Director

    • Tenure: 21.7yrs
    • Compensation: US$1.23m
  • Lampkin Butts (68yo)

    President

    • Tenure: 21.7yrs
    • Compensation: US$1.44m
  • John Baker (77yo)

    Independent Director

    • Tenure: 25.8yrs
    • Compensation: US$238.79k
  • Phil Livingston (75yo)

    Lead Director

    • Tenure: 0yrs
    • Compensation: US$280.51k
  • Edith Kelly-Green (66yo)

    Independent Director

    • Tenure: 1.1yrs
    • Compensation: US$10.28k
  • Gail Pittman (65yo)

    Independent Director

    • Tenure: 17.8yrs
    • Compensation: US$260.52k
  • Suzanne Mestayer (66yo)

    Independent Director

    • Tenure: 2.3yrs
    • Compensation: US$235.57k
  • Toni Cooley (58yo)

    Independent Director

    • Tenure: 12.8yrs
    • Compensation: US$241.14k
  • Fred Banks (76yo)

    Independent Director

    • Tenure: 12.8yrs
    • Compensation: US$280.27k

Company Information

Sanderson Farms, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Sanderson Farms, Inc.
  • Ticker: SAFM
  • Exchange: NasdaqGS
  • Founded: 1947
  • Industry: Packaged Foods and Meats
  • Sector: Food, Beverage & Tobacco
  • Market Cap: US$3.319b
  • Shares outstanding: 22.15m
  • Website: https://www.sandersonfarms.com

Number of Employees


Location

  • Sanderson Farms, Inc.
  • 127 Flynt Road
  • Laurel
  • Mississippi
  • 39443
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SAFMNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDMay 1987
SF9DB (Deutsche Boerse AG)YesCommon StockDEEURMay 1987

Biography

Sanderson Farms, Inc., an integrated poultry processing company, produces, processes, markets, and distributes fresh, frozen, and prepared chicken products in the United States. The company sells ice-packe ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/15 23:43
End of Day Share Price2019/10/15 00:00
Earnings2019/07/31
Annual Earnings2018/10/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.