To The Moon

$Hormel(HRL)$ , as the second largest meat company in US, has released its earnings after March,1 close. Just like it's peer, $Tyson(TSN)$, a booming results drove the stock price higher. Our previous article "Should Consumer Staples Be A Better Choice?", once suggested the sector of consumer staples shall be a good choise against the high inflation, and highlighted those two meat companies. HRL, retail businesses grew sales 17% during the first quarter, with brands such as Hormel Black Label, SPAM, SKIPPY, WHOLLY and Jennie-O. This quarter, with the recovery of offline business in the United States, the business of offline stores has been greatly improved. Total revenue US $3.04 billion, a year-on-year increase of 23.6%; Revenue of Refrigerated Food US $1.627 billion, up 19% year-on-year, and the operating profit was US $162 million, up 15% year-on-year. JennieO brand store's revenue was $384 million, up 15% year-on-year, and its operating profit was $43.7 million. The main reason for the company's growth lies in higher prices of pork and chicken, brought by inflation. In addition, company executives said that the operating profit margin is expected to further increase in 2022. Their earnings guidance for fiscal 2022, Net sales to be between $11.7 billion and $12.5 billion, Diluted earnings per share to be between $1.87 and $2.03 per share. In terms of the valuation, company's current PE is 28 times now, and will reach 25 times at the year end. EV/EBITDA also reaches 19 times high It is not cheap in the whole peers. Its biggest competitor,$Tyson(TSN)$ current PE is 10 times, but Tyson Foods does not have an offline store business, which may be the main difference between the two valuations. Another important point is that this kind of daily consumer goods company Dividends are usually paid out. HRL has a dividend yield of 2%, and Tyson Foods has a dividend yield of 1.93% This will attract many investors with pension and long-term price investment.