The food industry is comprised of companies that are primarily focused on offering food and non-alcoholic beverage products. It includes grocery stores, food distribution companies, and other companies offering consumer staples that consumers either eat or drink. It does not include restaurant businesses, many of which are considered cyclical because consumers tend to dine out less during economic slumps. Companies in the food industry include National Beverage Corp. (FIZZ), Darling Ingredients Inc. (DAR), and B&G Foods Inc. (BGS).
Food stocks are best represented by the S&P Food & Beverage Select Industry Index, even though this index includes companies offering alcoholic beverages. The index has underperformed the broader market over the past 12 months, providing a total return of 8.3% compared to the Russell 1000’s total return of 13.3%, as of September 18, 2020. All statistics in the tables below are as of September 21.
Here are the top 3 food stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Food Stocks
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 you’re paying less for each dollar of profit generated.
|Best Value Food Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|BellRing Brands Inc. (BRBR)||19.03||0.8||4.3|
|Ingles Markets Inc. (IMKTA)||35.98||0.7||5.1|
|Albertsons Companies Inc. (ACI)||13.06||6.2||6.7|
- BellRing Brands Inc.: BellRing Brands makes nutritional food products such as protein shakes, powders, and nutrition bars. BellRing Brands reported a sharp decline in net earnings as net sales slumped 14.1% in Q3 of its 2020 fiscal year (FY), the three-month period ended June 30, 2020. The company said that sales were negatively impacted by the fallout from the COVID-19 pandemic.
- Ingles Markets Inc.: Ingles Markets is a regional supermarket chain. It offers products in each of the following categories: grocery, non-foods, perishables, and other.
- Albertsons Companies Inc.: Albertsons Companies is a grocery store company that operates food and drug retail stores. It offers grocery products, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services. The company reported net income growth of 1,096.3% on revenue growth of 21.4% in Q1 FY 2020, which ended June 20, 2020. Net income was positively affected by cost of sales and other expenses that, proportional to total sales, were relatively lower than the year-ago quarter. The company said that digital sales grew 276%, largely driven by the pandemic.
Fastest Growing Food Stocks
These are the food stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Food Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Albertsons Companies Inc. (ACI)||13.06||6.2||1,350|
|The North West Co. Inc. (NWC.TO)||CA$35.00||CA$1.7||257.1|
|The Kroger Co. (KR)||33.21||25.7||178.4|
- Albertsons Companies Inc.: See above for company description.
- The North West Co. Inc.: North West is a Canada-based multinational grocery and retail company. The company offers food, family apparel, housewares, appliances, outdoor products, and offers services such as quick-service prepared food.
- The Kroger Co.: Kroger operates supermarkets, drug stores, multi-department stores, jewellery stores, and convenience stores. The company also engages in the manufacture and processing of some of the food it sells in its supermarkets. Kroger reported net earnings growth of 185.7% on sales growth of 8.2% in Q2 2020, which ended August 15, 2020. Net income was boosted by a mark-to-market gain on investments of $368 million compared to a mark-to-market loss of $45 million in the same quarter a year ago.
Food Stocks with the Most Momentum
These are the food stocks that had the highest total return over the last 12 months.
|Food Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Celsius Holdings Inc. (CELH)||21.92||1.5||500.5|
|SunOpta Inc. (STKL)||7.17||0.6||228.9|
|Utz Brands Inc. (UTZ)||18.06||2.2||77.2|
|S&P Food & Beverage Select Industry Index||N/A||N/A||8.3|
- Celsius Holdings Inc.: Celsius is a holding company that develops, sells, and distributes calorie-burning beverages. It offers a variety of different beverage flavors and markets its beverages through multiple channels, including grocery, drug, convenience, and nutrition stores, as well as gyms. The company reported net income of $1.6 million in Q2 2020, which ended June 30, 2020. It was a significant improvement from the $1.5 million net loss reported in the year-ago quarter. Revenue was up 86.3% to a record $30.0 million.
- SunOpta Inc.: SunOpta owns and operates businesses in the natural and organic food markets. The company offers organic grains and seeds, raw material ingredients, plant-based beverages, broths, teas, nutritional beverages, frozen fruit, and more. SunOpta reported net earnings of $777,000 in Q2 2020, which ended June 27, 2020. It reported a net loss of $8.9 million in the year-ago quarter. Revenue grew 6.1%. The company said that it succeeded in boosting growth by 10% on an adjusted basis despite the negative impact in its foodservice channel due to COVID-19,.
- Utz Brands Inc.: Utz Brands manufactures and distributes branded snack food products. It offers a range of salty snacks, including potato chips, pretzels, cheese snacks, veggie snacks, pork skins, tortilla chips, and more.