What happened

Shares of Tyson Foods (NYSE:TSN) outperformed a surging market in November. The stock gained 14% compared to the 11% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally erased only a small part of the meat producer's 2020 losses, and shares are still down by over 20% so far this year.

A woman shops in the meat section of a supermarket.

Image source: Getty Images.

So what

Investors were happy with Tyson's mid-November earnings release, which included surprisingly strong sales and earnings metrics. The owner of processed-meat brands including Tyson, Jimmy Dean, and Hillshire Farm enjoyed double-digit spikes in beef and pork volumes even as prices ticked lower. These trends translated into just a modest decline in adjusted sales and surging adjusted operating income.

Now what

Tyson is facing several challenges in the new fiscal year, including supply struggles, pricing pressures amid weak restaurant sales, and rising demand for meat substitutes.

These issues have executives predicting difficult operating conditions in its beef and pork segments while the chicken and prepared-foods niches rise. Yet the stock still might be attractive to patient investors who are seeking above-average dividend yields.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.