Now trading at a price of $56.37, Tyson Foods has moved -1.45% so far today.
Tyson Foods, Inc. is an American multinational corporation based in Springdale, Arkansas, that operates in the food industry. The large-cap Consumer Staples has returned a 3.28% dividend yield over the last 12 months.
Snapshot of the Company's Consistently Thin Margins and Low Leverage:
| 2019-09-30 | 2020-09-30 | 2021-09-30 | 2022-09-30 | |
|---|---|---|---|---|
| Revenue (MM) | $42,405 | $43,185 | $47,049 | $53,282 |
| Revenue Growth | n/a | 1.84% | 8.95% | 13.25% |
| Gross Margins | 11.84% | 12.47% | 13.87% | 12.51% |
| Gross Margins Growth | n/a | 5.32% | 11.23% | -9.81% |
| Operating Margins | 6.53% | 6.97% | 9.34% | 8.28% |
| Operating Margins Growth | n/a | 6.74% | 34.0% | -11.35% |
| Net Margins | 4.67% | 4.77% | 6.48% | 6.08% |
| Net Margins Growth | n/a | 2.14% | 35.85% | -6.17% |
| Earnings Per Share | $5.45 | $5.68 | $8.39 | $9.07 |
| EPS Growth | n/a | 4.22% | 47.71% | 8.1% |
| Diluted Shares (MM) | 363 | 363 | 363 | 357 |
| Free Cash Flow (MM) | $1,254 | $2,675 | $2,631 | $800 |
| FCF Growth | n/a | 113.32% | -1.64% | -69.59% |
| Capital Expenditures (MM) | $1,259 | $1,199 | $1,209 | $1,887 |
| Net Debt / EBITDA | 2.35 | -0.23 | -0.28 | -0.08 |
Tyson Foods Is Currently Underpriced:
Tyson Foods has a trailing twelve month P/E ratio of 8.58 compared to the Consumer Staples sector's average of 24.36. The company doesn't issue forward earnings guidance, and the annual average growth rate of its last 5 years of reported EPS is 6.25%. On this basis, the company's PEG ratio is 1.37, which shows that it is fairly priced.
Furthermore, Tyson Foods is likely undervalued in terms of its equity because its P/B ratio is 1.175 compared to its sector average of 4.29. The company's shares are currently trading -41.16% below their Graham number, implying there is a margin of safety for the stock. The Graham number is calculated according to the formula:
√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 7.39 * 55.21) = $95.81
