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"My momma told me, 'You better shop around.'" - Smokey Robinson

Independent research allows investors to go beyond the stocks featured in the news and shop lesser-known alternatives. As simple as it sounds, you are better off shopping around than using the media as a filter that selects for familiar or popular stocks.

Tyson Foods (NYSE:TSN) is a familiar producer of chicken, beef, pork, and processed grain foods. Some of its products might be in your kitchen right now, and Tyson products are likely found for sale in your local supermarket. Its success and status as a household name make it one of the most researched stocks on the web. Should investors restrict their research to stocks like TSN because of its recognizable products and well-publicized success?

No. On the contrary, investment returns are ultimately dictated by financial performance, not fame. Regardless of Tyson's notoriety, its earnings and future cash flows will determine its value. The future financial potential of a stock can be gauged by using financial metrics to determine how cheaply a stock is priced, its ability to weather hardship, and its growth potential.

As alternatives to TSN, consider the following stocks with strong track-records and solid credit scores:

Ticker

Company

10-Year Average ROE

Altman Z-score

ANDE

The Andersons, Inc.

14.0%

4.6

BG

Bunge Limited

14.7%

3.5

IMKTA

Ingles Markets Inc.

10.5%

3.0

NAFC

Nash Finch Co.

8.5%

5.6

SNX

SYNNEX Corp.

13.2%

5.4

TESS

TESSCO Technologies Inc.

9.5%

5.5

VLO

Valero Energy Corporation

12.5%

4.0

WNR

Western Refining Inc.

42.9%

4.1

TSO

Tesoro Corporation

11.6%

4.2

TSN

Tyson Foods Inc.

5.6%

4.9

Like TSN, these alternative stocks are all categorized as "safe" according to the Altman Z-score,* indicating that they are not considered bankruptcy risks. Moreover, the average 10-year return on equity demonstrates that ANDE, BG, IMKTA, NAFC, SNX, TESS, VLO, WNR, and TSO have grown shareholder wealth at a faster rate than Tyson. It is clear from these two metrics that each of these nine alternative stocks is as high or higher "quality" than Tyson.

What's more, these stocks are cheaper and have better growth prospects than Tyson:

Ticker

Company

Industry

P/E

EPS growth next 5 years

ANDE

The Andersons, Inc.

Farm Products

7.98

12.0%

BG

Bunge Limited

Farm Products

9.45

10.0%

IMKTA

Ingles Markets Inc.

Grocery Stores

10.05

13.3%

NAFC

Nash Finch Co.

Food Wholesale

8.42

15.0%

SNX

SYNNEX Corp.

Business Services

9.31

10.0%

TESS

TESSCO Technologies Inc.

Electronics Wholesale

10.03

15.0%

VLO

Valero Energy Corporation

Oil & Gas Refining & Marketing

5.36

21.3%

WNR

Western Refining Inc.

Oil & Gas Refining & Marketing

8.36

20.0%

TSO

Tesoro Corporation

Oil & Gas Refining & Marketing

5

9.1%

TSN

Tyson Foods Inc.

Meat Products

10.13

7.3%

Based on lower price-to-earnings ratios, these stocks are cheaper than TSN at current market prices. Better yet, they have better growth prospects according to analyst projections. Rather than restrict yourself to concentrated investments in a familiar stock, consider a diversified mix of these nine securities as a more attractive alternative.

Of course, you can still enjoy Tyson's tasty food products without being an investor.

Disclaimer: This research is NOT a guarantee. This article uses third-party data and may contain approximations and errors. Please check estimates and data for yourself before investing.

This article was written to provide investor information and education, and should not be construed as a guarantee or investment advice. I have no idea what your individual risk, time-horizon, and tax circumstances are: please seek the personal advice of a financial planner.

*The Altman Z-Score is a measure of bankruptcy risk that is not based on stock price volatility. This score places companies into three groups: "safe" (Z-score > 2.99), "grey" (Z-score between 2.99 and 1.81), and "distressed" (Z-score < 1.81), and is surprisingly useful for identifying bankruptcy risk in the coming year. This method of segmenting companies uses of fundamental (financial statement) data and market capitalization only, not on price volatility. Beyond credit risk prediction, companies with higher Z-scores have historically outperformed companies with lower Z-scores, in aggregate. One sector has not been accurately modeled: Altman's Z-score has not accurately predicted the bankruptcy risk of financial companies.

"Distressed" was a label coined by researchers, and should not be taken to mean that any company is bankrupt or in default on the basis of this calculation alone. Credit scoring is not fate, only prediction based on relative past performance of companies grouped by key variables. Time will tell.

Source: 9 Stocks Tastier Than Tyson Foods