That kept best food stocks stock in the $500 range from November 2021 through April of this year. In May, however, the company’s margins declined despite a revenue beat in the quarter. Between its KFC, Taco Bell, Pizza Hut, and Habit Burger Grill brands, there are more than 53,000 restaurants operating globally under Yum! Brands’ portfolio. Like Restaurant Brands International, Yum! covers multiple categories. Burger King, Tim Hortons, and Popeyes round out the Restaurant Brands stable of restaurant chains. With the addition of Firehouse Subs, the company now covers burgers and fries, coffee and breakfast, fried chicken, and sandwiches.
But in bull markets and booming economies, these stocks tend to underperform. The mention of food stocks likely conjures up grocery stores and related retailers, wholesalers and suppliers. Indeed, those types of companies are present on this list, but it also includes a number of firms that make those foods possible. Yum! is already one of the biggest players in the fast food industry, but it still has significant long-term growth potential. 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. And, because many fast food chains focus on offering great value, a tough economic environment poses fewer risks.
- It’s just one more indication that investors can count on KO stock in times of turbulence.
- The global food and grocery retail market was worth nearly $11.3 trillion in 2021, and it’s likely to grow right along with the population in coming years.
- As a pivotal necessity in any circumstance, KR stock represents consistent demand.
- 5 Beer Stocks to Consider In 2023 We look at five of the best stocks for this unspectacular but steady industry.
Consumer discretionary, where companies sell products with elastic demand, like cars, travel and luxury items. One advantage consumer staples have over consumer discretionary is pricing power. During inflationary periods, consumer staples stocks can raise prices easier than other sectors since consumers need their products daily.
Investing in Food Stocks
Consumer staples stocks to protect their capital and earn income from dividends during rough periods. But consumer staples stocks have products consumers need and the pricing power to navigate inflationary periods. Produces food additives and scents through four different divisions spread out across the globe. IFF sells its products to the cosmetic and food industries, especially companies producing perishable food like meat and dairy. The company has been a strong dividend stock throughout its history and currently boasts a 20-year dividend payout raise streak. After languishing in 2022, the stock could rebound as investors seek high dividend consumer staples stocks to strengthen their portfolios.
Starbucks is the world’s largest coffee chain, and they’re another restaurant that has adapted to the pandemic environment very well. They opened hundreds of new stores and were financially stable enough to launch a share buyback program. They already had a strong delivery model in place and didn’t rely on in-person dining, which helped them keep their sales up. Domino’s Pizza is another restaurant chain that has done very well despite the pandemic.
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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.
In addition to their own brand of supermarkets, they also own popular chains like Ralph’s, Fry’s, Smith’s, Food 4 Less, and more. To be fair, the coronavirus hasn’t definitively changed this trajectory. Unlike fresh fruits and vegetables, General Mills specializes in shelf-stable foods like cereal. Obviously, in a prolonged emergency, shelf life, not necessarily healthy eating, is the top priority.
The reason likely had to do with Costco’s low gas prices, which drove customers to its stores. Those gas sales, which pushed up revenues as more traffic entered the store, also dragged margins lower due to rock-bottom prices. Even as people tighten purse strings and spend less, these food stocks will benefit. The pandemic was bad news for Starbucks due to its dependence on commuters, but sales are now bouncing back in a big way.
They’re expanding into meat alternatives as well as healthy and organic products to cater to a broader sector of the market. Because many of the items they sell are considered essentials, they are a good defensive stock for tough economic times. They are particularly well known for their cereal brands, but they also make other popular breakfast foods and snack items. Despite the challenges of the current economy, they were able to keep their prices stable, which drove revenue growth. Their grocery sections offer many popular brands, including healthy and organic options. While earnings per share numbers missed the mark, their revenue remained stable.
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Although their earnings per share missed analyst expectations, the company’s global sales growth actually went up year over year. Ultimately, the bottom line is that people are still stressed over this unprecedented crisis. At least for the next few months, the food industry should enjoy unusually bullish tailwinds. Because whether you’re eating in or dining out, this sector is indispensable. These are the food stocks with the lowest 12-month trailingprice-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.
With so many people – particularly food industry workers – coming down with Covid-19, multiple meat products manufacturers were forced to shut down production to various degrees. Additionally, the economic fallout from the national lockdowns temporarily eliminated demand from restaurants and other institutions. Among consumer staples stocks, cigarette manufacturers like Altria Group pay the highest dividend yields. And unlike other high-yielding firms, these dividends are sustainable. Investing in consumer staples isn’t a path to quick riches, but when economic uncertainty is rampant, the sector is a good hiding place. For starters, the companies in this sector sell items with inelastic demand, meaning that consumers buy them regardless of economic conditions.
That said, what we’re looking for is stocks that appear poised to perform well in the near term as inflation rocks consumers, and over the longer term as well. Comparable sales soared last year overall, although Popeyes was a weak spot. Still, the potential for restaurant growth alone, especially among the company’s smaller brands, is reason enough to consider investing in Restaurant Brands. 2021 was a bumper year for Wendy’s, with same-restaurant sales soaring 10%.
The stock trades for around 19 times forward earnings, and it sports a dividend yield of roughly 2.85%. There’s plenty of economic uncertainty right now, but General Mills’ pricing power should help see it through. From a contrarian perspective, right now may be a good time to consider fast-food eateries as viable food stocks to buy. Given the pent-up demand from millions of people who have forgotten how long they’ve been in quarantine, these entities could enjoy a sales spike. Indeed, this pandemic and subsequent supply chain disruption is a free marketing opportunity for Hain’s Yves Veggie Cuisine brand.
Many of these new restaurants have improved kitchen designs, which make meal prep much more efficient. Chipotle also offers low-cost deliveries for those who don’t want to leave the house. Their revenue increased by 7.1 percent, and they transitioned easily to a low-contact business model. Chipotle stock has nearly tripled in price after hitting a low point in March 2020. These include soups, chicken broth, baked goods, beverage products, and more. In addition to their namesake soup products, the company also owns Pepperidge Farm, Prego, Swanson, and Snyder’s-Lance.
Best Food Manufacturing Stocks
When searching for consumer staples stocks with high dividends, yield isn’t the only barometer to use when performing due diligence. Ensure the stocks you’re researching have manageable dividend payout rates and strong outlooks to maintain the dividend. When inflation is high and uncertainty rampant, consumer staples stocks are a good place for investors to park capital and earn income through dividends.
We follow a select group of https://forex-world.net/ funds because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns. When investors are uncertain, they often look to consumer staples stocks since these companies sell things we can’t go without, such as food, beverages and household products. Yum! is opening new locations across all its brands at a healthy pace, and sales are soaring at existing restaurants.
- Many restaurant stocks struggled during the pandemic, but that wasn’t the case with Chipotle.
- The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
- The food industry is composed of companies that focus primarily on offering food and nonalcoholic beverage products.
- BASF has shown impressive growth and plays a vital role in things like wheat production, which is being wracked by Russia’s invasion of Ukraine.
Since Kellogg’s makes such a large portfolio of products, they aren’t overly reliant on sales of any one product. This is reflected in their stock price, which has increased significantly since last March. Many experts now think this stock is undervalued, which means it could be the right time to add it to your portfolio. This membership model provides Costco with a steady source of income, which is very helpful during challenging economic times.