The company is adding locations across all brands, boosting its restaurant count by about 1,200 in 2021. Restaurant Brands added to its portfolio with the acquisition of Firehouse Subs in late 2021. The sandwich chain boasts more than 1,200 mostly franchised locations and about $1.1 billion in systemwide sales. Firehouse Subs is Restaurant Brands’ smallest chain, but it could easily expand the brand to many thousands of locations over time.
PepsiCo (PEP 1.22%) is another packaged food company with a large portfolio of leading brands. On the beverage side of the business, Pepsi, Mountain Dew, and Gatorade top the list. On the food side, Lay’s, Doritos, Quaker Oats, and Cheetos are just a few examples from the company’s portfolio. The global food and grocery retail market was worth almost $11.3 trillion in 2021, and it’s likely to grow right along with the population in coming years. There are plenty of companies competing for consumers’ food dollars. From a contrarian perspective, right now may be a good time to consider fast-food eateries as viable food stocks to buy.
The fund owns 3.65 million shares of the company, worth $177.75 million. With consumers trying to rein in their grocery bills, preparing costlier full-scale meals and making trips to the restaurant are being bypassed in favor of quicker and cheaper alternatives. Tyson certainly doesn’t have the pricing power of a packaged food company with well-known brands, given that meat is largely a commodity. Meat processing in the U.S. is highly concentrated among a small number of companies such as Tyson, which own a relatively small number of massive facilities. The company’s results are partly dictated by supply and demand for beef, pork, and chicken, with margins heavily influenced by pricing.
The company processes cereal grains and oilseeds into products used in food and beverages. All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed fusion markets review 13Fs for the Q reporting period. Many people will stop going to restaurants when they fall on hard times. Unlike many other food companies, Tyson struggled during the COVID-19 pandemic.
Campbell Soup Company (NYSE: CPB)
These are the food stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows that you’re paying less for each dollar of profit generated. Beyond Meat (BYND 3.85%) is a pure-play plant-based food stock, offering a variety of products built around pea protein.
- The company’s brand portfolio includes Pillsbury, Cheerios, Häagen-Dazs, Progresso, Green Giant, Yoplait, and many others.
- Autoship sales generate higher operating margins since they require little incremental marketing spend from Chewy.
- Jim Simons’ Renaissance Technologies owns 2.73 million shares of the company as of the end of the third quarter, worth $176.46 million.
- At the start of 2022, Starbucks had more than 34,300 company-operated and licensed stores.
- Ancillary pet products such as pet insurance and animal health products are becoming mainstream and expanding the broader industry.
And, because many fast food chains focus on offering great value, a tough economic environment poses fewer risks. Guessing when the next war or drought will boost food prices — or whether the current dislocations will continue — is a fool’s errand. They offer a balanced diet in a time when sectors like technology can upset even the strongest stomachs. Poor management has crushed shares of Kraft Heinz (KHC) despite its spectacular array of brands, which include Oscar Mayer, Jell-O and Ore-Ida, among many others.
Post Holdings, Inc. (NYSE:POST)
This makes them great choices for a dividend investing strategy. The Invesco Dynamic Food & Beverage ETF is a blend of large, mid, and small-cap stocks. Top holdings include Mondelez, Hershey, General Mills—and other recognizable, consumer-facing names like Coca-Cola and Pepsico. Some of the portfolio is also invested in companies that wholesale to restaurants and fast-food chains, such as Sysco Foods. In October 2020, R5 Capital upgraded Campbell Soup shares to Buy from Hold, with a price target of $59.
As expected over the past few years, Shake Shack has seen an increase in online orders. Online channels and delivery apps have brought in millions of new buyers during the pandemic. Topping your portfolio with one of these three pizza stocks could be a good idea.
This is partially because of supply chain backups, which made it difficult for them to take full advantage of increased demand. Kellogg stock didn’t pop as much in 2020 as many other food stocks. While many other restaurants have had to close stores as a result of the pandemic, Starbucks is looking at increasing their global footprint. Campbell’s products are also household names Binance cryptocurrency exchange that you can find in grocery stores around the country. Like many other grocery store chains, Kroger has been exploring online sales options to reduce in-person interactions between customers and staff. While General Mills, Tyson Foods, Mondelez International, and PepsiCo are great overall picks in the food industry, companies in more specialized sectors are worth a look as well.
Essential food companies are in a situation to relay rising prices to consumers. Food items are usually the last to see decline in consumer spending. However, not all companies in the food sector are totally safe from the current market dynamics. The global food market generated over $8.27 trillion in sales in 2021, an increase of more than $500 billion from the previous year.
Are Food Stocks a Good Investment for You?
Food industry is comprised of companies that produce food and non-alcoholic beverages. Food companies are considered among the most stable because trends can change on the stock market but we won’t stop consuming food and the demand for it is quite predictable. Hence, for the sake of stability of the portfolio investors add food stocks. For example, Warren Buffet has shares of Coca-Cola and Kraft Heinz, which you will find in our list of top food stocks.
The Trump administration has downplayed the uptick in infections and assured the American people that a second shutdown won’t happen. Still, people can choose to quarantine or stock up on core products, which is a positive for the how to become an app developer education requirements food industry. Petco’s growth was almost flat in 2019 but accelerated in 2020, thanks to pandemic-related tailwinds. The company posted 11.4% year-over-year comparable sales growth, and revenue increased 11% to $4.92 billion.
Mondelez NASDAQ: MDLZ
McDonald’s does operate some of its own restaurants, giving it the flexibility to try new things before pushing them out to franchised locations. The company took a hit during the worst of the pandemic, but business bounced back last year. McDonald’s generated net income of $7.5 billion, giving it profit margins that are the envy of the fast food industry. With the pandemic now receding, at least based on consumer behavior, fast food restaurants can leverage the investments they made in digital and delivery to drive growth for years to come.
Central Garden & Pet Company
Which stocks are major institutional investors including hedge funds and endowments buying in today’s market? Click the link below and we’ll send you MarketBeat’s list of thirteen stocks that institutional investors are buying up as quickly as they can. Most food companies have been around for several decades, so they won’t necessarily be in the list of cheap stocks to buy now.
Costco Wholesale (COST)
PEP stock has appreciated at an annualized rate of over 11% in the past three, five, and ten years, respectively. Pepsico is rarely flashy, but the company consistently generates value for its shareholders, leading to strong and steady returns by PEP stock. A quick trip through the supermarket will easily show you that these food companies are at the top of the food chain—at least on Wall Street. NGVC experienced strong sales and performance, expanding its margins. In addition to a gross margin increase of 80 basis points to 28.4%, NGVC saw a decrease in store expenses by nearly 2%.
The Original BARK Company may be better known by the name of its best-known product, Barkbox, a monthly subscription service that provides premium toys and treats for dogs. The company went public through a SPAC in a merger completed in June 2021. Our experts picked 7 Zacks Rank #1 Strong Buy stocks with the best chance to skyrocket within the next days. Bite-size important facts and numbers about the markets, the world around us, and what it all means for you, written in simple language with a bit of humor. On the date of publication, Ian Bezek held long positions in HSY, HRL, and MKC stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.