Should You Invest in Tyson Foods?

PHOTO CREDIT: Yahoo Finance

OVERVIEW

Tyson Foods Incorporation is a company based in the United States. The company produces poultry, beef, and pork products and sells them around the world. The company operates under the Jimmy Dean, Hillshire Farms, and many other brands. The company was founded in 1935.

Why You Should?

  1. Tyson Foods is a great reopening play in an investor’s portfolio. The company saw its commercial sales decrease as venues like stadiums and restaurants closed down due to the pandemic. Once this pandemic is over and as these venues reopen for business, Tyson will quickly see demand return.
  2. Tyson Foods is a safe investment option due to the essential nature of the products that it sells. Despite the economic times, people will still need to eat food like chicken, beef, and pork. Tyson will see stable sales during rough economic times because of this. Stable sales will benefit the company and its investors.
  3. Tyson Foods has been investing in the future of the poultry, beef, and pork markets. They have started to design and produce some plant-based meat products in order to increase sales volumes to younger consumers who do not want to eat meat. This will benefit the company’s future growth and will also benefit investors in the company.
  4. The company has seen rising revenues and profits over the past couple of financial years due to the reasons mentioned above. This has helped the company grow and expand its product offerings and has also benefited investors in the company. In the financial year of 2020, the company reported revenues of around 43.19 billion and profits of around 2.06 billion. Both of these metrics are higher than what the company reported in the financial year of 2019 when they had revenues of around 42.41 billion and profits of around 1.98 billion.
PHOTO CREDIT: Yahoo Finance

Why You Should Not?

  1. Tyson Foods faces tough competition in the meat industry. Some of these competitors include Cargill, JBS, Hormel Foods, and many others. This competition might hurt the company and its investors in the company.
  2. Tyson Foods will be negatively impacted by changing consumer eating trends. Younger consumers no longer want to eat meat and want to focus on sustainability. These consumers have shifted to plant-based meat products instead of the ones that Tyson sells. This will hurt the company in the future and will also hurt investors.
  3. The COVID-19 pandemic has hurt some aspects of the company’s business. From plant closures to the shut down of commercial venues, the company has had to limit operations and face low demand as well. This is getting better but might still hurt the company and its investors until everyone is back to 100% normal.

MY OPINION

I think that Tyson Foods is a decent long-term investment due to its position as a good reopening play, a safe investment option, rising revenues, and profits, as well as its investments for the future of the meat industry. However, tough competition, negative impacts from the pandemic, and changing consumer trends might hurt the company and its investors.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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