The Best Thanksgiving Turkey Stock? HRL, SEB & IBA

Thanksgiving is around the corner meaning investors might want to take a closer look at turkey stocks like Hormel Foods Corporation (NYSE: HRL), Seaboard Corporation (NYSEMKT: SEB) and Industrias Bachoco, S.A.B. de C.V. (NYSE: IBA) – the last major publicly traded turkey stocks available for investors. Moreover, the Wall Street Journal has pointed out that corn prices are the lowest in more than three years and fewer birds are in production as some producers cut back on their flocks this year due to weaker turkey commodity prices. Feed prices, which make up about 70% of the cost of a turkey, had soared with the price of corn which hit the $8 a bushel level but a recent bumper crop has sent corn prices plunging to about the $4 a bushel level.

With that in mind, here is a closer look at three potential Thanksgiving turkey stocks for investors:

Hormel Foods Corporation. Founded by George A. Hormel in 1891, large cap Hormel Foods Corporation is primarily involved in the production of a variety of meat and food products and the marketing of those products throughout the United States and internationally. The Jennie-O Turkey Store, Inc is a wholly-owned subsidiary of Hormel Foods Corporation and is one of the largest turkey processors (traditional and value-added turkey products for retail, foodservice and deli markets) and marketers in the world. Hormel Foods Corporation is scheduled to report fourth quarter earnings before the market opens today and it should be noted that other meat processors have been hitting highs lately while Tyson Foods, Inc (NYSE: TSN) has been rising over a week since its earnings point. For the fiscal year, analysts expect Hormel Foods Corporation to report a 6% revenue rise to $2.30 billion for the quarter and earnings of $1.92 per share, but it should be mentioned that there was a third quarter revenue drop after three straight quarters of rising revenue plus profit has fallen in each of the last two quarters (14% year-over-year for last quarter and 2% for the second quarter). Otherwise, Hormel Foods Corporation has a trailing P/E of 22.82 and a forward P/E of 18.95 plus a forward dividend of $0.68 for a 1.6% dividend yield. On Monday, large cap Hormel Foods Corporation fell 1.07% to $42.44 (HRL has a 52 week trading range of $30.23 to $44.22 a share) for a market cap of $11.20 billion plus the stock is up 36% since the start of the year and up 194.7% over the past five years.

Seaboard Corporation. A diversified conglomerate that operates a number of agriculture, food, transport and ocean transport businesses worldwide, mid cap Seaboard Corporation's divisions include Butterball, PrairieFresh, Daily's and Seaboard Marine. Seaboard Corporation's Butterball division is the largest producer of turkey products in the US producing approximately 1 billion pounds of turkey each year that are distributed throughout the country and in more than 30 countries. Butterball operates five processing plants located in North Carolina, Arkansas and Missouri, plus its wholly owned subsidiary, Packing Company, is a pork packing plant located in Montgomery, Ill. that produces a variety of private label and branded items for retail and foodservice application in the continental US. It should be noted that earlier this month, it was reported that there is a shortage of Butterball's fresh, never-frozen whole turkeys in sizes 16 pounds (the average weight of most Thanksgiving turkeys) and up but the company expects to be back at full capacity in time for the Christmas holiday. According to a company statement:

"We experienced a decline in weight gains on some of our farms causing a limited availability of large, fresh turkeys. While we are continuing to evaluate all potential causes, we are working to remedy the issue."

However, only a fraction of the turkeys produced in the US every year are sold as fresh (85% of turkeys are flash-frozen) and Butterball is not the only producer plus its just one division of fairly well diversified Seaboard Corporation. Otherwise, Seaboard Corporation has a trailing P/E of 16.09, no forward dividend and only a few hundred shares trade on an average trading day. On Monday, mid cap Seaboard Corporation fell 1.12% to $2,738.89 (SEB has a 52 week trading range of $2,193.21 to $2,948.24 a share) for a market cap of $3.26 billion plus the stock is up 8.3% since the start of the year and up 215.9% over the past five years.

Industrias Bachoco, S.A.B. de C.V. Founded in 1952 and listed in 1997 on the NYSE, Mexico based small cap Industrias Bachoco would be more of an indirect Thanksgiving turkey play as its one of the ten largest poultry producers globally whose main business lines are: chicken, eggs, balanced feed, swine and turkey and beef value-added products. Industrias Bachoco owns and manages more than a thousand facilities, organized in nine production complexes and 64 distribution centers in Mexico plus a production complex in the United States. It was back in July that Industrias Bachoco announced it had reached an agreement to acquire the breeding assets in Arkansas of Morris Hatchery Inc., an operation with the capacity of around 350 thousand laying hens producing hatching eggs. Back in October, Industrias Bachoco reported 3Q13 net sales totaled Ps. 9,437.0 million for a 4.7% year over year decrease mainly due to lower chicken prices in the Mexican market along with a drop in chicken volume compared to 3Q12. These declines were partially offset by an increase in egg sales while other business lines reported mixed results. Net income came in at Ps. 353.5 million verses net income of Ps. 627.5 million. According to the CEO: "This was a typical third quarter for the Company, in terms of seasonality, with chicken prices at their weakest." In addition, results had been strong for the same period last year. Otherwise, Industrias Bachoco has a trailing P/E of 8.73 and a forward dividend of $0.52 for a dividend yield of 1.3%. On Monday, small cap Industrias Bachoco fell 0.37% to $40.11 (IBA has a 52 week trading range of $25.58 to $43.12 a share) for a market cap of $2.01 billion plus the stock is up 43.7% since the start of the year and up 194.1% over the past five years.

Finally, here is a closer look at the long term performance of all three potential Thanksgiving turkey stocks:

As you can see, its been a healthy feast for investors over the longer term albeit shares have been rather flat over the near term.