Top Food Stocks for Q3 2022

JBSAY, CELH, and SPTN are top for value, growth, and momentum, respectively

The food industry is composed of companies that focus primarily on offering food and nonalcoholic 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 The Kroger Co., Darling Ingredients Inc., and B&G Foods Inc.

The food sector, as represented by the S&P 1500 Food Products Industry Index, has outperformed the broader market, with a one-year trailing total return of 4.1% compared with -1.6% for the Russell 1000 Index, as of June 2, 2022.

Here are the top three food stocks with the best value, the fastest growth, and the most momentum. All numbers in the tables below are as of June 2, 2022.

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

Best Value Food Stocks
  Price ($) Market Capitalization (Market Cap) ($B) 12-Month Trailing P/E Ratio
JBS S.A. (JBSAY) 14.92 16.6 4.1
Sanderson Farms Inc. (SAFM) 201.20 4.5 5.2
Herbalife Nutrition Ltd. (HLF) 22.40 2.4 6.0

Source: YCharts

  • JBS S.A.: JBS is a Brazil-based meat producer. It processes beef, pork, lamb and chicken, and produces convenience foods. The company also sells leather, hygiene and cleaning products, and metal packaging.
  • Sanderson Farms Inc.: Sanderson Farms produces, processes, packages, and sells chicken products. It sells both fresh and frozen chicken. On May 27, the company filed a 10-Q for the quarter ended April 30, 2022. Net income more than tripled year-over-year (YOY) on robust net sales growth. Key drivers of growth were strong sales of its vacuum-sealed, chill-packed, and ice-packed chicken products.
  • Herbalife Nutrition Ltd.: Herbalife Nutrition is a global nutrition company. It offers weight management products and healthy meals and snacks, as well as sports and fitness, energy, and other targeted nutritional products. It also sells personal care products. On May 3, Herbalife reported earnings for Q1 2022. Net income plunged on declining revenues YOY. Sales declined in the company's North America, China, EMEA, and Central and South America.

Fastest Growing Food Stocks

These are the top food stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their 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 Food Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Celsius Holdings Inc. (CELH) 68.96 5.2 800.0 166.6
Sysco Corp. (SYY) 84.32 43.0 247.1 42.9
Sanderson Farms Inc. (SAFM) 201.20 4.5 231.6 35.8

Source: YCharts

  • Celsius Holdings Inc.: Celsius is a holding company that develops, sells, and distributes a variety of calorie-burning beverages. It sells through multiple channels, including grocery, drug, convenience, and nutrition stores, as well as gyms. For Q1 2022, Celsius reported earnings on May 10. Net income surged by more than 10-fold as revenue more than doubled YOY. The company's growth was fueled by torrid sales growth through clubs, vending machines, direct store delivery and other channels in the U.S., offsetting declining international revenues.
  • Sysco Corp.: Sysco sells and distributes food products to restaurants, healthcare and educational facilities, lodging establishments, and other customers. It also provides equipment and supplies to the food service and hospitality industries.
  • Sanderson Farms Inc.: See company description above.

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 (%)
SpartanNash Co. (SPTN) 35.81 1.3 77.0
Albertsons Companies Inc. (ACI) 30.96 16.4 58.4
Loblaw Companies Ltd. (L.TO) 115.68 38.5 57.3
Russell 1000 Index N/A N/A -1.6
S&P 1500 Food Products Industry Index N/A N/A 4.1

Source: YCharts

  • SpartanNash Co.: SpartanNash distributes grocery products to a range of different independent and chain retailers, its own retail stores, and U.S. military commissaries and exchanges. The company also operates supermarkets as well as a fresh produce distribution network. SpartanNash announced on May 31 a quarterly dividend of $0.21 per common share. The dividend will be paid on June 30 to shareholders of record as of June 15, 2022.
  • Albertsons Companies Inc.: Albertsons Companies is a food and drug retailer. It operates a chain of grocery stores selling produce, canned items, baked goods, and other food products. It also operates pharmacies, fuel centers, distribution centers, and manufacturing facilities.
  • Loblaw Companies Ltd.: Loblaw Companies is a Canada-based owner, operator, and franchisor of food and pharmacy stores. The company has more than 2,400 stores across Canada. On May 10 Loblaw announced the completion of its acquisition of Lifemark Health Group. Lifemark Health provides outpatient physiotherapy, occupational therapy, mental health, and other healthcare services. The acquisition is expected to strengthen Loblaw's role as a healthcare services provider. The total cash consideration for the acquisition was $845 million.

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.

Article Sources
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  1. YCharts. "Financial Data."

  2. Sanderson Farms Inc. "Form 10-Q for the quarterly period ended April 30, 2022," Pages 4, 8.

  3. Herbalife Nutrition Ltd. "Herbalife Nutrition Announces First Quarter 2022 Results and Updates Full Year 2022 Guidance."

  4. Celsius Holdings Inc. "Celsius Holdings Announces Record First Quarter 2022 Financial Results," Pages 1-2.

  5. SpartanNash Co. "SpartanNash Declares Quarterly Cash Dividend."

  6. Loblaw Companies Ltd. "Loblaw Companies Limited completes acquisition of Lifemark Health Group."

  7. Loblaw Companies Ltd. "Loblaw to Acquire Lifemark Health Group to Expand Shoppers Drug Mart’s Healthcare Services."

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