Tyson Foods (TSN)

[Roadmap2Retire]

I am fascinated by Food - both personally and as an investor.

Considering the change in worldwide demographics over the coming years/decades, theres a very straightforward case for investing in food.

Tyson Foods seems like its in a nice spot - has following market shares in the US
- Chicken 22%
- Beef 24%
- Pork 17%.

Diversified customer base - with no one customer exceeding 10%, except for Walmart - which accounts for approx 14%.

Has nice geographical diversification - US, Mexico, Brazil, China, India

Tyson has always paid a low amount of dividend (still very low at approx 1% yield) and had stagnant dividend for years. Starting 2013, they started raising those dividends (2013 = 25% increase, 2014 = 50% increase).

Some of the other things in the financials that caught my attention
- PE 16
- Forward PE 10.75
- PEG 0.85
- Payout 14%
- Expected EPS growth next 5 yrs 19%

Follow up reading:
- 2013 factbook
- Latest factbook
- Heres a nice research report from Market Realist.

[rapidacid]

What's the story with their share count? Have they been making acquisitions + issuing more shares? Or is it unlocked executive options? If a company is going to buyback shares I want the share count moving in exactly one direction.

Payout ratio + dividend growth rate has me salivating



I personally like, and own, CALM Cal-Maine Foods which is a play on egg consumption. I like eggs. Major downfall is they're one of those "pay 40% of earnings as a dividend" companies.

[EricL]

Tyson has a BBB credit rating and just a 10% payout ratio with a long history of frozen dividends.

It may be a decent capital gains play, but it wouldn't get any consideration in my portfolio as a dividend growth stock.

[Roadmap2Retire]

(04-29-2015, 09:48 AM)rapidacid Wrote: What's the story with their share count? Have they been making acquisitions + issuing more shares? Or is it unlocked executive options? If a company is going to buyback shares I want the share count moving in exactly one direction.

I havent completed my research yet. Looks like the sharecount increased until 2011 and then started reducing after.

From Morningstar (# of shares in Mil)

'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 TTM
357 345 355 356 372 379 380 370 367 364 380

I'll need to read up more to see why those sharecounts increased and are higher for TTM.

[rapidacid]

(04-29-2015, 10:22 AM)EricL Wrote: Tyson has a BBB credit rating and just a 10% payout ratio with a long history of frozen dividends.

It may be a decent capital gains play, but it wouldn't get any consideration in my portfolio as a dividend growth stock.

Do you have a resource that shows more than the last 15 years for dividends paid? I use this which only goes back to 2000: http://www.nasdaq.com/symbol/tsn/dividend-history

I've never read an earnings call transcript for them so I don't know what their dividend narrative is, but it certainly looks like it's moving in the right direction now

[Roadmap2Retire]

Although the companies are pained in a bad picture, gives an idea of how the industry works. What I found interesting:
- Companies make the farmers compete against each other in each region
- Companies make the farmers invest in the equipment and simply "lend" the product (chickens) for growing

https://www.youtube.com/watch?v=X9wHzt6gBgI

[EricL]

(04-30-2015, 07:43 AM)rapidacid Wrote:

(04-29-2015, 10:22 AM)EricL Wrote: Tyson has a BBB credit rating and just a 10% payout ratio with a long history of frozen dividends.

It may be a decent capital gains play, but it wouldn't get any consideration in my portfolio as a dividend growth stock.

Do you have a resource that shows more than the last 15 years for dividends paid? I use this which only goes back to 2000: http://www.nasdaq.com/symbol/tsn/dividend-history

I've never read an earnings call transcript for them so I don't know what their dividend narrative is, but it certainly looks like it's moving in the right direction now

Here is their dividend history, dividend was flat from 2000 to 2012.

[Roadmap2Retire]

Evaluation of Tyson by ModernGraham: http://www.moderngraham.com/2015/03/28/t...-2015-tsn/

[Roadmap2Retire]

Dammit. I hate it when I look at something, seriously consider it and put it on a watchlist and just watch that share price climb month after month.

TSN is now up 43% in 1 year since I first started looking at it. Grrrr

[Dividendsrule]

Interesting...Thanks for pointing out. Seems a lot of companies are "getting religion" and have started to raise the dividend in the last 5 years or so, interesting.
EL is another.

I really like the idea of Cal-Maine but I can't get behind a variable dividend. Management will have to firm up the policy to have me buy.

Seems like you could get into a commoditization issue with meat and poultry...I probably prefer the producer of the finished products. But yes the company looks interesting, thanks for pointing it out. Maybe will go down in time.

Another company that got religion in the past 5 years is L Brands. Just raised the divvy 20%, worth a look.

[Kerim]

(02-08-2016, 09:09 AM)Roadmap2Retire Wrote: Dammit. I hate it when I look at something, seriously consider it and put it on a watchlist and just watch that share price climb month after month.

TSN is now up 43% in 1 year since I first started looking at it. Grrrr

Lol. I think this is my least favorite experience. Much worse than the price dropping fast after I buy it.

[Roadmap2Retire]

A look at the big deals from the food industry, from Bloomberg Gadfly

http://www.bloomberg.com/gadfly/articles...e-the-deal