Stock Buy: Tyson Foods Inc.

Tyson Foods Inc. (TSN: 15.35 -0.18 -1.16%) recently surprised on estimates for the third straight quarter which pushed the stock up to a new 52-week high. Despite the stock surge, TSN still has attractive valuations. It is trading with a forward P/E of 14.9.

Company Description

Tyson Foods processes chicken, beef and pork at more than 400 facilities around the world. It has customers in more than 90 countries.

Tyson Beats Big in the Fiscal 2010 First Quarter

On Feb 5, Tyson Foods reported first quarter 2010 results and surprised on the Zacks Consensus by 133.33%. The company had a record fiscal first quarter, reporting 42 cents per share compared to last year’s loss of 27 cents and much better than the Zacks Consensus of 18 cents.

All operating segments were profitable with Beef, Pork and the Prepared Foods segments driving the quarter. Sales volumes rose 7.2% in the Beef segment.

The Chicken segment, which has been lagging, showed improvement. Tyson’s expects Chicken’s seasonal demand and the pricing environment will improve in fiscal 2010.

The company also reduced its debt by $400 million to $1.9 billion in the quarter.

Zacks Consensus Estimates Climb

Analysts are still revising estimates given the recent quarterly earnings announcement. But, so far, the Zacks Consensus is climbing for the fiscal second quarter and the full year.

3 estimates have been revised higher for the fiscal second quarter in the last week. The Zacks Consensus has jumped by a penny to 19 cents in that time period.

For fiscal 2010, 5 estimates have moved higher in the last 30 days as the Zacks Consensus gained 5 cents to $1.03 per share. Looking ahead to fiscal 2011, analysts expect earnings growth of 13.71%.

Value Fundamentals

Tyson Foods is a Zacks #1 Rank (strong buy) stock. It has a price-to-book ratio of 1.27. Tyson also pays a dividend, with a current yield of 1.10%.