Aug. 25, 2009 (Baystreet.ca) --
Chicken producer Sanderson Farms, Inc. (SAFM) on Tuesday said that it booked a profit in the third quarter, helped by lower feed costs and stabilizing chicken sales.
The Laurel, Mississippi-based company reported third quarter net income of $43 million, or $2.09 per share, compared with a loss of $3.6 million, or 18 cents per share, in the year-ago period.
Revenue rose 8% from last year to $504.8 million.
On average, Wall Street analysts expected a smaller profit of $1.81 per share, on lower revenue of $476 million.
Sanderson Farms shares fell 23 cents, or -0.6%, in morning trading Tuesday.
The Bottom Line
We have been avoiding shares of SAFM since our early June coverage began, when shares were trading at the $44 level. Sanderson Farms currently has a dividend yield of 1.37%, based on last night’s closing price of $40.93. The stock has technical support in the $34-38 price area. If the shares can ride further on today’s pop, we see overhead resistance around the $45-48 price levels. We would remain on the sidelines for now, but we are putting the stock on our upgrade watchlist.
Sanderson Farms, Inc. (SAFM) is not recommended at this time, holding a Dividend.com DARS Rating of 3.4 out of 5 stars.
Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.
