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Tyson Foods Gains on News of Expansion, to Add 250 Jobs


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While most of the companies are struggling with macroeconomic headwinds and cutting cost by retrenching labor, Tyson Foods Inc. (TSN - Analyst Report) has set itself on a growth trajectory and is geared to expand further.

The Springdale, AR-based meat processor stock has surged almost 5.7%, since its wholly owned subsidiary Tyson Fresh Meats announced that it is investing $27 million to expand the production capacity of its case-ready beef and pork plant in Council Bluffs, IA.

The company will add nearly 55,000 sq. foot of area to the production facility for new production lines and warehouse space. The expansion program, slated for completion in Jul 2017, is expected to enhance the plant’s capacity to produce fresh ground beef, beef and pork cuts, and meal kits that are ready to be distributed to retail grocers. The project will add 350 jobs. The plant employs a total of 1400 employees from the region.

Including the plant discussed above, the company operates three local plants in the area. The other two plants include a pepperoni plant in Council Bluffs and a bacon plant in Omaha.

Tyson Foods, which currently sports a Zacks Rank #1 (Strong Buy) has been carrying on consistent continuous product innovation and maintained strong momentum in most of its business segments. Keeping in view the increased health consciousness among customers and their choice of nutritional food products, Tyson’s complete antibiotic-free Nature Raised Farms brand has been further enhanced with the addition of Individually Quick Frozen products. Moreover, the company is striving to eliminate the use of human antibiotics from its U.S. broiler chicken flocks by the end of Sep 2017. Such initiatives are projected to boost demand for company’s products going forward.

Stocks to Consider

Other stocks in the broader consumer staples sector worth considering include Sanderson Farms Inc. (SAFM - Snapshot Report) , Hormel Foods Corporation (HRL - Analyst Report) and The WhiteWave Foods Company (WWAV - Snapshot Report) .

Sanderson Farms has an average positive earnings surprise of 25% in the trailing four quarters. The company sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hormel Foods carries a Zacks Rank #2 (Buy) and has a long-term earnings growth rate of 9.6%.

The WhiteWave Foods Company also carries a Zacks Rank #2 and has a long-term earnings growth rate of 16.3%.

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