Industrias Bachoco. de (NYSE:IBA) - Share price, News & Analysis

Q: What is the Fair Price of IBA when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

IBA ($44.58) is trading below our estimate of [[fair value]] ($90.85)

IBA fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	1/6
Past Performance	5/6
Financial Health	6/6
Dividends	4/6

IBA Stock Overview

Industrias Bachoco, S.A.B. de C.V., through its subsidiaries, operates as a poultry producer in Mexico and the United States.

Rewards

Trading at 50.9% below our estimate of its fair value

Earnings are forecast to grow 4.73% per year

Earnings grew by 32.4% over the past year

Risk Analysis

Unstable dividend track record

Industrias Bachoco. de Competitors

Hostess Brands

NasdaqCM:TWNK

US$2.9b

Tootsie Roll Industries

NYSE:TR

US$2.4b

Cal-Maine Foods

NasdaqGS:CALM

US$2.5b

B&G Foods

NYSE:BGS

US$1.8b

Price History & Performance

Summary of all time highs, changes and price drops for Industrias Bachoco. de
Historical stock prices
Current Share Price	US$44.58
52 Week High	US$48.11
52 Week Low	US$36.98
Beta	0.77
1 Month Change	-5.33%
3 Month Change	-4.35%
1 Year Change	-2.24%
3 Year Change	-11.09%
5 Year Change	-20.05%
Change since IPO	152.04%

Recent News & Updates

May 02

Industrias Bachoco: Further Consolidation Could Push The Price Up

Vertically integrated business Industrias Bachoco claims to be one of the ten largest poultry producers globally. The company sells eggs, balanced feed, swine, and turkey among other valued-added products. Under normal circumstances, I believe that management will successfully move from bulk to packaged white eggs. In my view, if the company’s recent acquisitions are successful, and management undertakes more M&A operations, both the EBITDA margin and the sales growth will trend north.

Shareholder Returns

	IBA	US Food	US Market
7D	12.3%	5.2%	6.3%
1Y	-2.2%	-1.4%	-18.8%

Return vs Industry: IBA matched the US Food industry which returned -1.8% over the past year.

Return vs Market: IBA exceeded the US Market which returned -18.4% over the past year.

Price Volatility

Is IBA's price volatile compared to industry and market?
IBA volatility
IBA Average Weekly Movement	3.7%
Food Industry Average Movement	6.9%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.7%
10% least volatile stocks in US Market	3.2%

Stable Share Price: IBA is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: IBA's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1952	33,721	Rodolfo Ramos Arvizu	https://bachoco.com.mx

Industrias Bachoco, S.A.B. de C.V., through its subsidiaries, operates as a poultry producer in Mexico and the United States. The company operates in two segments, Poultry and Others. It is primarily involved in the breeding, processing, and marketing of chicken, eggs, swine, balanced animal feed, and other meat products.

Industrias Bachoco. de Fundamentals Summary

How do Industrias Bachoco. de's earnings and revenue compare to its market cap?
IBA fundamental statistics
Market Cap	Mex$44.26b
Earnings (TTM)	Mex$5.12b
Revenue (TTM)	Mex$86.71b

8.6x

P/E Ratio

0.5x

P/S Ratio

Is IBA overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
IBA income statement (TTM)
Revenue	Mex$86.71b
Cost of Revenue	Mex$72.46b
Gross Profit	Mex$14.25b
Other Expenses	Mex$9.13b
Earnings	Mex$5.12b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	102.54
Gross Margin	16.44%
Net Profit Margin	5.91%
Debt/Equity Ratio	4.1%

How did IBA perform over the long term?

See historical performance and comparison

Dividends

1.9%

Current Dividend Yield

17%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is IBA undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for IBA?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for IBA. This is calculated by dividing IBA's market cap by their current preferred multiple.
What is IBA's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	Mex$44.26b

IBA key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.3x
Enterprise Value/EBITDA	3.4x
PEG Ratio	1.8x

Price to Earnings Ratio vs Peers

How does IBA's PE Ratio compare to its peers?

IBA PE Ratio vs Peers

The above table shows the PE ratio for IBA vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	55.6x
TWNK Hostess Brands	22.6x	11.3%	US$2.9b
TR Tootsie Roll Industries	36.9x	n/a	US$2.4b
CALM Cal-Maine Foods	135.3x	-22.4%	US$2.5b
BGS B&G Foods	27.4x	12.7%	US$1.8b
IBA Industrias Bachoco. de	8.6x	4.7%	US$2.2b

Forward PE

Price-To-Earnings vs Peers: IBA is good value based on its Price-To-Earnings Ratio (8.6x) compared to the peer average (55.6x).

Price to Earnings Ratio vs Industry

How does IBA's PE Ratio compare vs other companies in the US Food Industry?

Price-To-Earnings vs Industry: IBA is good value based on its Price-To-Earnings Ratio (8.6x) compared to the US Food industry average (17.8x)

Price to Earnings Ratio vs Fair Ratio

What is IBA's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

IBA PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	8.6x
Fair PE Ratio	18.4x

Price-To-Earnings vs Fair Ratio: IBA is good value based on its Price-To-Earnings Ratio (8.6x) compared to the estimated Fair Price-To-Earnings Ratio (18.4x).

Share Price vs Fair Value

What is the Fair Price of IBA when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: IBA ($44.58) is trading below our estimate of fair value ($90.85)

Significantly Below Fair Value: IBA is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: IBA is poor value based on its PEG Ratio (1.8x)

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Future Growth

How is Industrias Bachoco. de forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

4.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: IBA's forecast earnings growth (4.7% per year) is above the savings rate (1.9%).

Earnings vs Market: IBA's earnings (4.7% per year) are forecast to grow slower than the US market (13.9% per year).

High Growth Earnings: IBA's earnings are forecast to grow, but not significantly.

Revenue vs Market: IBA's revenue (1% per year) is forecast to grow slower than the US market (8.4% per year).

High Growth Revenue: IBA's revenue (1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: IBA's Return on Equity is forecast to be low in 3 years time (9.8%).

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Past Performance

How has Industrias Bachoco. de performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

2.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: IBA has high quality earnings.

Growing Profit Margin: IBA's current net profit margins (5.9%) are higher than last year (5.3%).

Past Earnings Growth Analysis

Earnings Trend: IBA's earnings have grown by 2% per year over the past 5 years.

Accelerating Growth: IBA's earnings growth over the past year (32.4%) exceeds its 5-year average (2% per year).

Earnings vs Industry: IBA earnings growth over the past year (32.4%) exceeded the Food industry 13.1%.

Return on Equity

High ROE: IBA's Return on Equity (9.9%) is considered low.

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Financial Health

How is Industrias Bachoco. de's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: IBA's short term assets (MX$36.7B) exceed its short term liabilities (MX$10.9B).

Long Term Liabilities: IBA's short term assets (MX$36.7B) exceed its long term liabilities (MX$5.1B).

Debt to Equity History and Analysis

Debt Level: IBA has more cash than its total debt.

Reducing Debt: IBA's debt to equity ratio has reduced from 12.2% to 4.1% over the past 5 years.

Debt Coverage: IBA's debt is well covered by operating cash flow (319.6%).

Interest Coverage: IBA earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Industrias Bachoco. de current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.92%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: IBA's dividend (1.92%) is higher than the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: IBA's dividend (1.92%) is low compared to the top 25% of dividend payers in the US market (4.23%).

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (16.6%), IBA's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (30.6%), IBA's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

10.0yrs

Average management tenure

CEO

Rodolfo Ramos Arvizu (64 yo)

11.58yrs

Tenure

Mr. Rodolfo Ramos Arvizu has been the Chief Executive Officer of Industrias Bachoco S.A.B. de C.V. since October 2010. Mr. Ramos Arvizu served as Director as well as Director of Production of Industrias Ba...

Leadership Team

Experienced Management: IBA's management team is seasoned and experienced (10 years average tenure).

Board Members

Experienced Board: IBA's board of directors are seasoned and experienced ( 22.9 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31