Why Tyson Foods Stock Popped 51.2% in the First Half of 2019

Despite a world filled with potential disruptions, the protein-based food leader is exactly where it wants to be.


Steve Symington, The Motley Fool

Jul 9, 2019


What happened


Shares of Tyson Foods (NYSE:TSN) have steadily climbed 51.2% through the first six months of 2019, according to data from S&P Global Market Intelligence, as investors not only weigh its enviable position following a harrowing African Swine Fever Outbreak overseas, but also the company's recent entry into the budding plant-based protein market.


It certainly helps that the broader markets provided a tide that lifted many boats, including a 17% gain from the S&P 500 in the first half. But Tyson's relative outperformance is indicative of the much stronger tailwinds enjoyed by the protein-centric food company.


So what


In particular, Tyson Foods should be a surprising beneficiary of an African Swine Fever outbreak that recently wiped out more than a third of China's entire pig herd -- a devastating total that was greater than the United States' entire pig population and represented over 5% of the world's total protein production.


In a company blog post in May, Tyson Foods CEO Noel White called it an "unprecedented event" that should "underscore the power of Tyson Foods' diverse business model. White elaborated that while lower pork supplies should "offer significant upside" to Tyson's pork segment, its chicken and beef businesses should also thrive as consumers turn to substitute proteins.


Speaking of which, Tyson Foods also climbed in June after the company announced its first plant-based and blended protein products, to be included under its new "Raised & Rooted" brand. The move undeniably stemmed from the overwhelmingly positive traction other plant-based protein companies like Beyond Meat (NASDAQ: BYND) have achieved in recent months, but also made Tyson Foods the single largest U.S. meat producer to enter the segment.


Now what ...