Back to top

Image: Bigstock

Tyson Foods (TSN) Expands Union City Facility, Creates Jobs

Read MoreHide Full Article

Tyson Foods, Inc. (TSN - Free Report) recently announced that it will invest $84 million in its poultry plant located at Union City, TN. The investment will expand the plant’s capacity and is anticipated to create more than 300 jobs. The expansion of the facility is expected to begin in the fall and be completed by mid-2019.

The investment is anticipated to increase the facility’s capacity and expand the existing processing lines and harvest area. The plant would gain an additional space of 25,000 square feet, as a result of this investment. It would also aid the upgrade of supporting operations such as transportation, feed mill and hatchery. Tyson Foods expects that the expansion plan would require building 200 additional broiler chicken houses within the forthcoming two years. The company also intends to collaborate with independent farmers in the northwestern Tennessee region.

The expansion of the Union City plant in Tennessee is well in line with the company’s growth initiatives to expand its protein segments, especially chicken. Consumer demand for protein enriched food has been rising, which is well reflected in the company’s third-quarter fiscal 2017 results, where Tyson Foods witnessed strong volumes and solid performance of its chicken, beef and pork segments.

Further, the company’s acquisition of AdvancePierre in the third quarter is also expected to drive growth of its protein packed brands. The acquisition is projected to generate cost synergies of $200 million within three years and also to be accretive to earnings. Similarly the acquisition of Hillshire in fiscal 2014 aided Tyson Foods to sell its pork products in higher-margin end markets, gain synergies of $580 million in fiscal 2016 and anticipate gains of $675 million for fiscal 2017.

Apart from robust domestic demand, Tyson Foods also has a strong presence in the markets of Canada, Central America, China, the European Union, Japan, Mexico, Middle East, South Korea and Taiwan. The company also offers a wide array of meat products and commands a strong presence in all beef, pork, chicken and processed food products categories. It has also been consistently innovating to add products to its already rich food line up.

Such growth boosting efforts have led the shares of this Zacks Rank #2 (Buy) company to outpace the broader Consumer Staples sector. Shares of the company have depicted a rise of 13.5% in the past three months compared with the sector's gain of 2.8%.

Looking For More Consumer Staples Stocks? Check These

Investors may also consider stocks such as Constellation Brands, Inc. (STZ - Free Report) , Nu Skin Enterprises, Inc. (NUS - Free Report) and Inter Parfums, Inc. (IPAR - Free Report) , all carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Constellation Brands delivered an average positive earnings surprise of 11.7% in the trailing four quarters. It has a long-term earnings growth rate of 18.2%.

Nu Skin delivered an average positive earnings surprise of 10.8% in the trailing four quarters. It has a long-term earnings growth rate of 8.7%.

Inter Parfums delivered an average positive earnings surprise of 18.1% in the trailing four quarters. It has a long-term earnings growth rate of 12.3%.

One Simple Trading Idea

Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.

This proven stock-picking system is grounded on a single big idea that can be fortune shaping and life changing. You can apply it to your portfolio starting today.

Learn more >>

Published in