Top Food Stocks for Q2 2021

The food industry is comprised of companies that focus primarily on offering food and non-alcoholic 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. (KR), Darling Ingredients Inc. (DAR), and B&G Foods Inc. (BGS).

Food stocks are best represented by the S&P Food & Beverage Select Industry Index, even though this index includes companies offering alcoholic beverages. The index has outperformed the broader market over the past 12 months, providing a total return of 60.0%, as of March 11, 2021. By comparison, the Russell 1000 has provided a total return of 48.3%, as of March 10, 2021. All statistics in the tables below are as of March 11, 2021.

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

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

Source: YCharts

• Ingles Markets Inc.: Ingles Markets is a regional supermarket chain. It offers products in each of the following categories: grocery, non-foods, perishables, and other. The company announced in early February financial results for Q1 of its 2021 fiscal year (FY), which ended December 26, 2020. Net income rose 204.3% as net sales grew 10.4% compared to the year-ago quarter. A lower interest expense in Q1 and a substantial loss on the early extinguishment of debt in the year-ago quarter helped to boost net income.
• Campbell Soup Co.: Campbell Soup manufactures and markets food and beverage products, including Prego pasta sauces, Pace Mexican sauces, Kettle Brand potato chips, Emerald nuts, V8 juices, and more. The company recently announced financial results for Q2 FY 2021, which ended January 31, 2021. Quarterly net earnings were down 79.7%, largely due to abnormally high earnings in the year-ago quarter, when results were bolstered by a significant benefit from earnings from discontinued operations. Excluding the earnings from discontinued operations in Q2 FY 2020, earnings from continuing operations in Q2 FY 2021 rose 43.3%. Net sales for the quarter rose 5.4%.
• Albertsons Companies Inc.: Albertsons Companies is a grocery store company that operates food and drug retail stores. It offers grocery products, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services.

Fastest Growing Food Stocks

These are the food stocks with the highest year-over-year (YOY) earnings per share (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.

Source: YCharts

• The Kraft Heinz Co.: Kraft Heinz is a global food and beverage company. It manufactures food and beverage products, including condiments and sauces, cheese and dairy, meats, refreshment beverages, coffee, and other grocery products.
• Ingles Markets Inc.: See above for company description.
• SpartanNash Co.: SpartanNash is a multi-regional grocery distributor and retailer. It distributes grocery products to independent retailers, select national retailers, its own retail stores, and U.S. military commissaries. The company recently announced the appointment of Jason Monaco to the roles of executive vice president and chief financial officer (CFO), effective March 22, 2021. He will replace CFO Mark Shamber, who will remain with the company until the end of April to assist with the transition.

Food Stocks with the Most Momentum

These are the food stocks that had the highest total return over the last 12 months.

Source: YCharts

• America Great Health: America Great Health provides a range of healthcare products. In addition to offering health food, the company also provides skincare products, medical devices, preventive medication, and more.
• Celsius Holdings Inc.: Celsius is a holding company that develops, sells, and distributes calorie-burning beverages. It offers a variety of beverage flavors and markets its beverages through multiple channels, including grocery, drug, convenience, and nutrition stores, as well as gyms.
• United Natural Foods Inc.: United Natural Foods is a distributor and retailer of natural, organic, and specialty products. The company offers natural grocery products, general merchandise, nutritional supplements, bulk and food service products, personal items, frozen foods, and more. United Natural Foods recently announced financial results for Q2 FY 2021, which ended January 30, 2021. The company reported net income of $59 million compared to a net loss of $31 million in the year-ago quarter. Quarterly net sales rose 7.1%.

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