Top Coffee Stocks for Q4 2022

NSRGY, QSR, and SJM are top for value, growth, and performance, respectively

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 slightly underperformed. The S&P 500 Consumer Staples Sector Index has posted a 3.6% total return over the past year, while the S&P 500 Consumer Discretionary Sector Index has provided a total return of -14.1%. By comparison, the Russell 1000 has returned -12.5%.

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 Sept. 19, 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) 111.92 307.8 18.0
Restaurant Brands International Inc. (QSR) 59.47 18.2 22.7
Keurig Dr Pepper Inc. (KDP) 37.77 53.5 24.9

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.
  • 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 Aug. 4, the company reported earnings for Q2 2022. Net income declined slightly while revenues climbed by 14% year-over-year (YOY), fueled by increases in system-wide sales at Burger King, Popeyes, and Tim Hortons. Net income was negatively affected by factors including income tax expenses, unfavorable foreign exchange movements, and higher share-based compensation for employees.
  • 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 Sept. 14, Keurig Dr Pepper announced a Q3 cash dividend of $0.20, a 6.7% increase to the company's annualized dividend rate. The dividend is payable on Oct. 14 to shareholders as of Sept. 30, 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) 59.47 18.2 -9.5 14.0
Starbucks Corp. (SBUX) 92.14 105.7 -18.6 8.7
Nestle S.A. (NSRGY) 111.92 307.8 -5.7 2.7

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. On Sept. 1, the company announced that Laxman Narasimhan will be the next chief executive officer (CEO) as of Oct. 1. He was most recently CEO of Reckitt, a consumer health, hygiene, and nutrition company.
  • Nestlé S.A.: 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 (%)
The J.M. Smucker Co. (SJM) 139.96 14.9 17.2
Keurig Dr Pepper Inc. (KDP) 37.77 53.5 10.5
Restaurant Brands International Inc. (QSR) 59.47 18.2 -1.8
Russell 1000 N/A N/A -12.5
S&P 500 Consumer Staples Sector Index N/A N/A 3.6
S&P 500 Consumer Discretionary Sector Index N/A N/A -14.1

Source: YCharts

  • 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. The company's Q1 FY 2023 ended July 31, 2022, and it reported financial results for that quarter on Aug. 23. Net income plunged on marginal net sales gains YOY. Performance was impacted by a recall affecting the company's Jif brand peanut butter products.
  • Keurig Dr Pepper Inc.: See above for company description.
  • Restaurant Brands International Inc.: See above for company description.

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Article Sources
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  1. YCharts. “Financial Data.”

  2. Restaurant Brands International Inc. "Restaurant Brands International Inc. Reports Second Quarter 2022 Results."

  3. Keurig Dr Pepper Inc. "Keurig Dr Pepper Increases its Dividend by 6.7% and Declares Quarterly Dividend for Q3."

  4. Starbucks Corp. "Starbucks Names Laxman Narasimhan as Next Chief Executive Officer."

  5. The J.M. Smucker Co. "The J.M. Smucker Co. Announces Fiscal 2023 First Quarter Results."

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