The coffee industry is a complex and multilayered one, including everything from producers and distributors to processors, wholesalers, and retailers. Notable names include Starbucks Corp. (SBUX), J.M. Smucker Co. (SJM), and Restaurant Brands International Inc. (QSR). There is no single sector or ETF for for the ubiquitous bean, and coffee-related stocks can be found both in 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. These sectors have have had widely different market performance. The Consumer Staples Select Sector SPDR ETF (XLP) has dramatically outperformed the broader market, posting a -1.1% total return compared to the S&P 500's -13.3% over the past 12 months. By contrast, the Consumer Discretionary Select Sector SPDR ETF (XLY) has underperformed, with a total return of -18.0% during the same period. These market performance numbers and the statistics in the tables below are as of March 19.

Here are the top 3 coffee stocks with the best value, the fastest earnings growth, and the most momentum.

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 you’re paying less for each dollar of profit generated.

Best Value Coffee Stocks

 

Price ($) Market Cap ($B) 12-Month Trailing P/E Ratio
Restaurant Brands International Inc. (QSR)   28.25 8.4 11.9
Dunkin' Brands Group Inc. (DNKN) 44.28 3.7 15.3
Starbucks Corp. (SBUX) 56.33 66.1 18.4

Source: YCharts

  • 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. Today, the company also owns Popeyes Louisiana Chicken. Tim Hortons remains one of the largest coffee shop and restaurant chains in Canada. Restaurant Brands International reported total revenue growth of 4.6% during 2019, while adjusted diluted earnings per share (EPS) rose 3.4%.
  • Dunkin' Brands Group Inc.: Consumer discretionary stock Dunkin' Brands Group franchises quick service restaurants that serve hot and cold coffee, baked goods, and ice cream. The company franchises restaurants under its Dunkin' (formerly "Dunkin' Donuts") and Baskin-Robbins brands. Dunkin' Brands announced last week that its restaurants would limit service to carry-out and delivery to limit the spread of COVID-19.
  • Starbucks Corp.: Starbucks is a consumer discretionary stock that roasts and retails its own brand of specialty coffee through coffee-themed shops globally while selling whole bean coffee through various channels. Starbucks also offers other beverages, complementary food, and a selection of merchandise. The company announced last week that it was closing its company-operated cafés and reducing its service to drive-thru and select grocery locations in the U.S. and Canada for at least two weeks in response to the spread of COVID-19.

Fastest Growing Coffee Stocks

These are the coffee stocks with the highest year-over-year (YOY) 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 Coffee Stocks

 

Price ($) Market Cap ($B) EPS Growth (%)
J.M. Smucker Co. (SJM) 118.86 13.6 53.3
Keurig Dr Pepper Inc. (KDP) 19.91 28.0 52.6
Starbucks Corp. (SBUX) 56.33 66.1 21.3

Source: YCharts

  • J.M. Smucker Co.: Consumer staples stock J.M. Smucker manufactures food products for global sale. Although perhaps best known for its fruit spreads, peanut butters, shortenings and oils, the company also makes coffee products. The company announced earlier this month that John Brase, former Vice President and General Manager of Procter & Gamble Co.'s (PG) North American Family Care unit, was appointed to the role of Chief Operating Officer (COO), effective April 13, 2020.
  • Keurig Dr Pepper Inc.: Keurig Dr Pepper is a consumer staples stock that makes and distributes non-alcoholic beverage products including coffee. The company serves customers throughout North America.
  • Starbucks Corp.: See above for company description.

Coffee Stocks with the Most Momentum

These are the coffee stocks that had the highest total return over the last 12 months. Although one of the stocks listed below had a negative total return over the past year, it has still outperformed all other coffee stocks with negative total returns.

Coffee Stocks with the Most Momentum

 

Price ($) Market Cap ($B)

12-Month Trailing Total Return (%)

J.M. Smucker Co. (SJM) 118.86 13.6 14.6
Nestlé S.A. (NSRGY) 96.38 277.6 4.8
Starbucks Corp. (SBUX)         56.33 66.1 -19.0
S&P 500 (SPY) N/A N/A -13.3
Consumer Discretionary Select Sector SPDR ETF (XLY) N/A N/A -18.0
Consumer Staples Select Sector SPDR ETF (XLP) N/A N/A -1.1

Source: YCharts

  • J.M. Smucker Co.: See above for company description.
  • Nestlé S.A.: Consumer staples stock Nestlé is a Switzerland-based multinational packaged food company offering a wide variety of products ranging from baby food and bottled water to dairy products, frozen food, coffee, and more.
  • Starbucks Corp.: See above for company description.