May 23, 2024
Top 10 Stock Cal-Maine Foods Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Cal-Maine Foods – Top 10 Stock in Dividend Champions United States
Cal-Maine Foods is listed as a top 10 stock on May 23, 2024 in the market index Dividends USA because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 74 (high 74% performer), Obermatt assesses an overall buy recommendation for Cal-Maine Foods on May 23, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Packaged Foods & Meats |
| Index | Dividends USA, Sound Pay USA, NASDAQ, S&P US Food & Beverage |
| Size class | Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Cal-Maine Foods Buy
| 360 METRICS | May 23, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 51 |
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| GROWTH | ||||||||
| GROWTH | 37 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| SENTIMENT | ||||||||
| SENTIMENT | 37 |
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| 360° VIEW | ||||||||
| 360° VIEW | 74 |
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ANALYSIS: With an Obermatt 360° View of 74 (better than 74% compared with alternatives), overall professional sentiment and financial characteristics for the stock Cal-Maine Foods are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Cal-Maine Foods. The consolidated Value Rank has an attractive rank of 51, which means that the share price of Cal-Maine Foods is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 51% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 100. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 37. Professional investors are more confident in 63% other stocks. The consolidated Growth Rank also has a low rank of 37, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 63 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 74, Cal-Maine Foods is better positioned than 74% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 51), and the financing structure is on the safer side (Safety Rank of 100). However, sentiment in the professional investor community is below-average (Sentiment Rank of 37), as is the growth momentum for the company (Growth Rank of 37). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Cal-Maine Foods only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 37 (better than 37% compared with alternatives), overall professional sentiment and engagement for the stock Cal-Maine Foods is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Cal-Maine Foods. Analyst Opinions are at a rank of 17 (worse than 83% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Cal-Maine Foods. More encouragingly, the Professional Investors rank is 69, which means that professional investors hold more stock in this company than in 69% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 29, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 71% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 37 (less encouraging than 63% compared with investment alternatives), Cal-Maine Foods has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for Cal-Maine Foods. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Cal-Maine Foods Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 51 (better than 51% compared with alternatives), Cal-Maine Foods shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Cal-Maine Foods. Expected dividend yields are higher than for 98% of comparable companies (a Dividend Yield rank of 98), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 56, which means that the stock price is lower compared with invested capital than for 56% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 38 which means that the stock price compared with what market professionals expect for future profits is higher than for 62% of comparable companies, indicating a low value concerning Cal-Maine Foods's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Cal-Maine Foods with a rank of 22. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 78% of comparable companies, indicating a low value concerning Cal-Maine Foods's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 51, is a buy recommendation based on Cal-Maine Foods's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Cal-Maine Foods may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. ...read more
Growth Strategy: Cal-Maine Foods Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 37 (better than 37% compared with alternatives), Cal-Maine Foods shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Cal-Maine Foods. Capital Growth has a rank of 79, which means that currently professionals expect the company to grow its invested capital more than 1% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 85 (above 85% of alternative investments). But Sales Growth has only a rank of 1, which means that, currently, professionals expect the company to grow less than 99% of its competitors, and Profit Growth is also low at a rank of 1. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 37, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Cal-Maine Foods, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Cal-Maine Foods Debt Financing Safety very solid
| SAFETY METRICS | May 23, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 100 |
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| REFINANCING | ||||||||
| REFINANCING | 86 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 94 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 100 |
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ANALYSIS: With an Obermatt Safety Rank of 100 (better than 100% compared with alternatives) for 2024, the company Cal-Maine Foods has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Cal-Maine Foods is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Cal-Maine Foods. Leverage is at 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors. Refinancing is at a rank of 86, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 86% of its competitors. Finally, Liquidity is also good at a rank of 94, which means that the company generates more profit to service its debt than 94% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 100 (better than 100% compared with alternatives), Cal-Maine Foods has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Cal-Maine Foods Top Financial Performance
| COMBINED PERFORMANCE | May 23, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 51 |
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| GROWTH | ||||||||
| GROWTH | 37 |
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| SAFETY | ||||||||
| SAFETY | 94 |
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| COMBINED | ||||||||
| COMBINED | 81 |
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ANALYSIS: With an Obermatt Combined Rank of 81 (better than 81% compared with investment alternatives), Cal-Maine Foods (Packaged Foods & Meats, USA) shares have much better financial characteristics than comparable stocks. Shares of Cal-Maine Foods are a good value (attractively priced) with a consolidated Value Rank of 51 (better than 51% of alternatives), are safely financed (Safety Rank of 100, which means low debt burdens), but show below-average growth (Growth Rank of 37). ...read more
RECOMMENDATION: A Combined Rank of 81, is a strong buy recommendation based on Cal-Maine Foods's financial characteristics. As the company Cal-Maine Foods's key financial metrics exhibit good value (Obermatt Value Rank of 51) but low growth (Obermatt Growth Rank of 37) while being safely financed (Obermatt Safety Rank of 100), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 51% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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