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We issued an updated research report on Tyson Foods Inc. (TSN - Free Report) on Jul 12.
Strong Results in Past Quarters
Tyson Foods has been posting better-than-expected results over the past several quarters, backed by continuous product innovation and strong momentum in most of its business segments.
In the second quarter of fiscal 2016, as reported on May 9, 2016, Tyson’s earnings and revenues beat the Zacks Consensus Estimate, because of higher margins. The improvement in operating margins was driven by better operational execution and lower feed ingredient costs in the quarter. Importantly, the company increased its annual earnings outlook and, now, expects earnings in the range of $4.20 to $4.30 per share in fiscal 2016, compared to an earlier estimated range of $3.85 to $3.95.
The company continuously innovates while adding new products to the already rich food lineup. Tyson management has focused on innovation, making it an important facet of their growth strategy.
The company intends to launch an extension of the Hillshire Snacking platform, and a new Tyson Naturals line of frozen chicken products featuring all-natural ingredients, that too with no antibiotics. Both will come in Sep 2017. This is expected to boost initiatives in the coming quarters.
Regular Shareholder Returns
To ensure shareholder trust, management has been raising dividend consistently for the last five years at an average annual rate of 11.5%.
In Nov 2015, Tyson announced a rise of 50% in its quarterly dividend to $015 cents per share. Starting fiscal 2017, Tyson expects to raise its annual dividend by 10 cents per year.
Some Concerns Remain
However, beef segment has not been performing well for the past few quarters. Lower cattle supply and higher fed cattle costs have been responsible for the sluggishness in the segment over the past few quarters. Tyson, currently carrying a Zacks Rank #3 (Hold) has also decided to reduce its beef production capacity following lower cattle supply. The beef business is expected to grow at the low end of the normalized range of 1.5% to 3% for fiscal 2016.
Bottom Line
Better-ranked stocks in the consumer staples sector include Altria Group Inc. (MO - Free Report) , Reynolds American Inc. and Post Holdings Inc. (POST - Free Report) . While Post Holdings sports a Zacks Rank #1 (Strong Buy), Altria Group and Reynolds American carry a Zacks Rank #2 (Buy).
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Is Tyson is a Good Pick Amid Market Volatility?
We issued an updated research report on Tyson Foods Inc. (TSN - Free Report) on Jul 12.
Strong Results in Past Quarters
Tyson Foods has been posting better-than-expected results over the past several quarters, backed by continuous product innovation and strong momentum in most of its business segments.
In the second quarter of fiscal 2016, as reported on May 9, 2016, Tyson’s earnings and revenues beat the Zacks Consensus Estimate, because of higher margins. The improvement in operating margins was driven by better operational execution and lower feed ingredient costs in the quarter. Importantly, the company increased its annual earnings outlook and, now, expects earnings in the range of $4.20 to $4.30 per share in fiscal 2016, compared to an earlier estimated range of $3.85 to $3.95.
TYSON FOODS A Price and Consensus
TYSON FOODS A Price and Consensus | TYSON FOODS A Quote
Product Innovation
The company continuously innovates while adding new products to the already rich food lineup. Tyson management has focused on innovation, making it an important facet of their growth strategy.
The company intends to launch an extension of the Hillshire Snacking platform, and a new Tyson Naturals line of frozen chicken products featuring all-natural ingredients, that too with no antibiotics. Both will come in Sep 2017. This is expected to boost initiatives in the coming quarters.
Regular Shareholder Returns
To ensure shareholder trust, management has been raising dividend consistently for the last five years at an average annual rate of 11.5%.
In Nov 2015, Tyson announced a rise of 50% in its quarterly dividend to $015 cents per share. Starting fiscal 2017, Tyson expects to raise its annual dividend by 10 cents per year.
Some Concerns Remain
However, beef segment has not been performing well for the past few quarters. Lower cattle supply and higher fed cattle costs have been responsible for the sluggishness in the segment over the past few quarters. Tyson, currently carrying a Zacks Rank #3 (Hold) has also decided to reduce its beef production capacity following lower cattle supply. The beef business is expected to grow at the low end of the normalized range of 1.5% to 3% for fiscal 2016.
Bottom Line
Better-ranked stocks in the consumer staples sector include Altria Group Inc. (MO - Free Report) , Reynolds American Inc. and Post Holdings Inc. (POST - Free Report) . While Post Holdings sports a Zacks Rank #1 (Strong Buy), Altria Group and Reynolds American carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>