Top Coffee Stocks for Q3 2022

NSRGY is top for value and performance, and QSR is to for growth

The coffee industry is complex and multilayered, including everything from producers and distributors to processors, wholesalers, and retailers. Notable names in the coffee industry include Starbucks Corp., The J.M. Smucker Co., and Restaurant Brands International Inc.

There is no single sector or index for the coffee industry, and coffee-related stocks can be found in both the consumer discretionary and consumer staples sectors. In general, retailers and coffee shops are part of the consumer discretionary group, and producers and packaged-food companies are part of the consumer staples group. Note that both of these sectors are much larger than the coffee industry, so these benchmarks below may diverge from coffee stocks as a category.

The consumer staples sector has outperformed the broader market while the consumer discretionary sector has underperformed. The S&P 500 Consumer Staples Sector Index has posted a 9.2% total return, while the S&P 500 Consumer Discretionary Sector Index has provided a total return of -11.8%. By comparison, the Russell 1000 has returned -2.7%.

Here are the top three coffee stocks with the best value, the fastest growth, and the best performance. The market performance numbers above and all statistics in the tables below are as of May 30, 2022.

Best Value Coffee Stocks

These are the coffee 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.

Best Value Coffee Stocks
  Price ($) Market Capitalization (Market Cap) ($B) 12-Month Trailing P/E Ratio
Nestle S.A. (NSRGY) 121.96 336.6 18.5
Restaurant Brands International Inc. (QSR) 52.51 16.2 19.5
Keurig Dr Pepper Inc. (KDP) 34.74 49.3 20.7

Source: YCharts

  • Nestlé S.A.: Consumer staples stock Nestlé is a Switzerland-based multinational packaged food company offering a wide variety of products including baby food, bottled water, dairy products, frozen food, coffee, and more. On April 21, the company reported sales results for Q1 2022. The company reported organic sales growth of 7.6% year-over-year (YOY) for the first three months of 2022. Nestlé saw growth across most categories and geographic regions, driven by an increase in prices and strong retail sales, among other factors.
  • Restaurant Brands International Inc.: Part of the consumer discretionary sector, Restaurant Brands International is a Canada-based holding company born out of the 2014 merger of Burger King and Tim Hortons, one of the largest coffee shop and restaurant chains in Canada. The company also owns Popeyes, the Louisiana fried chicken franchise. On May 3, Restaurant Brands released earnings information for Q1 2022. Net income was essentially flat as global comparable sales rose 8.0% and total revenues climbed by 15.2% YOY. Tim Hortons Canada and Burger King International in particular had strong sales growth for the period.
  • Keurig Dr Pepper Inc.: Keurig Dr Pepper is a consumer staples company that makes and distributes nonalcoholic beverage products, including coffee. The company serves customers throughout North America. On May 19, Keurig Dr Pepper announced a quarterly cash dividend of $0.1875 per share of common stock. The dividend will be paid on July 15 to shareholders of record as of July 1, 2022.

Fastest Growing Coffee Stocks

These are the top coffee stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.

Fastest Growing Coffee Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Restaurant Brands International Inc. (QSR) 52.51 16.2 1.7 15.2
Starbucks Corp. (SBUX) 78.50 90.0 3.6 14.5
Keurig Dr Pepper Inc. (KDP) 34.74 49.3 78.3 6.1

Source: YCharts

  • Restaurant Brands International Inc.: See above for company description.
  • Starbucks Corp.: Starbucks is a consumer discretionary stock. It retails, roasts, and sells its own brand of specialty coffee. The company operates retail locations around the world and sells whole-bean coffee through various channels. Starbucks also offers other beverages, food, and a focused selection of merchandise. Starbucks reported earnings results for Q2 FY 2022 on May 3. Net earnings attributable to the company rose by 2.3% despite robust growth. Quarterly consolidated net revenues rose 14.5% to a record $7.6 billion as comparable store sales rose about 12 percent in the U.S. as store volume continued to recover in the wake of the COVID-19 pandemic. The company opened 333 new stores during the period.
  • Keurig Dr Pepper Inc.: See above for company description.

Coffee Stocks with the Best Performance

These are the coffee stocks that had the best returns or smallest declines in total return over the past 12 months out of the companies we looked at.

Coffee Stocks with the Best Performance
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Nestlé S.A. (NSRGY) 121.96 336.6 0.8
The J.M. Smucker Co. (SJM) 125.37 13.6 -3.1
Keurig Dr Pepper Inc. (KDP) 34.74 49.3 -4.0
Russell 1000 N/A N/A -2.7
S&P 500 Consumer Staples Sector Index N/A N/A 9.2
S&P 500 Consumer Discretionary Sector Index N/A N/A -11.8

Source: YCharts

  • Nestlé S.A.: See above for company description.
  • The J.M. Smucker Co.: J.M. Smucker, a consumer staples stock, manufactures food products. It is best known for its fruit spreads, peanut butters, and shortenings and oils. On May 20, the company announced a voluntary recall of select JIF peanut butter products sold in the U.S. due to possible contamination by salmonella, which can cause death or serious infections. On May 21, the company, announced a voluntary recall of select JIF products sold in Canada due to risk of salmonella contamination. The company asked Canadian consumers owning products showing a specific number code to immediately dispose them.
  • Keurig Dr Pepper Inc.: See above for company description.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

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  1. YCharts. “Financial Data.”

  2. Nestlé S.A. "Nestlé reports three-month sales for 2022."

  3. Restaurant Brands International Inc. "Restaurant Brands International Inc. Reports First Quarter 2022 Results."

  4. Keurig Dr Pepper Inc. "Keurig Dr Pepper Declares Quarterly Dividend."

  5. Starbucks Corp. "Starbucks Reports Q2 Fiscal 2022 Results."

  6. The J.M. Smucker Co. "THE J. M. SMUCKER CO. ISSUES VOLUNTARY RECALL OF SELECT JIF® PRODUCTS SOLD IN THE U.S. FOR POTENTIAL SALMONELLA CONTAMINATION."

  7. The J.M. Smucker Co. "THE J. M. SMUCKER CO. ISSUES VOLUNTARY RECALL OF SELECT JIF® PRODUCTS SOLD IN CANADA FOR POTENTIAL SALMONELLA CONTAMINATION."

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