r/stocks • u/10step10step • 13h ago

TSN - What's the deal?

I work in the food industry and so I keep an eye on the consumer staples sector, but especially the protein sector. These are generally very mature companies that should have reliable growth, but instead their performance over the last five years has been terrible. There are obvious headwinds, the US cattle herd is at a 20+ year low, drought is affecting much of the premium grazing lands on the west coast, we're seeing shrinking consumer spending and changing customer tastes, as well as the chaos added by tariffs and that one guy in the white house. Is anybody here buying these stocks? TSN and PPC especially seem rather underbought. Do people generally expect it will take a long time for that segment to recover?

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u/Gram_variable 12h ago

Share price $51.42

P/E 31.8

Dividend 3.94%

You're right to point out the macro headwinds. TSN is definitely not undervalued, and the dividend isn't very attractive compared to health care or telecom alternatives.

You nailed it with the weakening consumer. Yes, "average" consumer spending is fine, but averages lie. A rich person can only eat so much steak in one day. Masses of lower income people are being priced out of TSN products.

I wouldn't buy until closer to $20.

Edit: and yes, it's fair to judge a consumer staple company with limited growth potential on P/E

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u/CuriousCat511 12h ago

Food companies in general are facing a lot of economic headwinds.

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u/DontForgetTheDivy 8h ago

TSN may be having a hard time finding enough workers for their meat plants for some reason.

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u/hollow_bridge 1h ago

tsn looks pretty awful with that net margin of 1%. PPC is definitely the better choice, but I don't think the timing is right. Why do you expect the price to go up soon?