Home News Best Food Stocks for Q4 2022

Best Food Stocks for Q4 2022

by SuperiorInvest

The food industry consists of companies that focus primarily on the supply of food and non-alcoholic beverages. It includes grocery stores, food distribution companies and other supply companies consumer goods that consumers either eat or drink. It does not include restaurant businesses, many of which are considered cyclical because consumers tend to eat less during economic downturns. Companies in the food industry include The Kroger Co., Darling Ingredients Inc. and B&G Foods Inc.

The food sector, represented by the S&P 1500 Food Products Industry Index, significantly outperformed the broader market with an annualized total return of 11.6% compared to -12.5% ​​for the Russell 1000 as of September 19, 2022.

Here are the top three food stocks with the best value, fastest growth and most momentum. All numbers in the tables below are as of September 19, 2022.

These are food stocks with the lowest 12-month lag price-earnings (P/E) ratio.. Because profits can be returned to shareholders in the form of dividends and buybacksa low P/E ratio indicates that you are paying less for every dollar of profit generated.

Most valuable food stocks
Price ($) Market capitalization (market capitalization) ($B) 12-month trailing P/E ratio
Ingles Markets Inc. (IMKTA) 84.18 1.6 5.8
Herbalife Nutrition Ltd. (HLF) 22.57 2.2 6.8
Pilgrim’s Pride Corp. (PPC) 25.60 6.1 8.4

Source: YCharts

  • Ingles Markets Inc.: Ingles Markets operates a chain of supermarkets. The company sells food, produce, meat, dairy products and other food and non-food products. It has locations throughout the southeastern United States
  • Herbalife Nutrition Ltd.: Herbalife Nutrition is a global nutrition company. It offers products for weight management and healthy meals and snacks, as well as products for sports and fitness, energy and other targeted nutritional products. It also sells personal care products. On August 2, Herbalife announced a $400 million investment in a digital initiative called Herbalife One. This initiative will create an integrated platform for Herbalife distributors and customers worldwide, offering new distributor registration, registration and training, access to wellness content and new shopping tools.
  • Pilgrim’s Pride Corp.: Pilgrim’s Pride manufactures and sells a wide variety of fresh, prepared and frozen chicken, pork and other products through retailers and food companies. Operating plants and food preparation facilities throughout the United States, Mexico and other locations, Pilgrim’s Pride reported Q2 2022 results on July 27. Net income was $362.0 million compared to a net loss for the prior year quarter and net sales increased 27.3% year on year (YOY). Operating profit was $512.9 million. Strong demand in retail and foodservice and investment in automation helped boost performance.

These are the best food stocks according to a growth model that ranks companies based on 50/50 weights of their most recent quarterly year-over-year sales percentage growth and their most recent quarterly year-over-year earnings per share (EPS) grow. Both sales and profit are decisive factors for the company’s success. Therefore, ranking companies by only one growth metric makes the ranking susceptible to a given quarter’s accounting anomalies (such as changes in tax laws or restructuring costs) that can make one or the other number unrepresentative of the business in general. Companies with quarterly earnings per share or revenue growth of more than 2,500% were excluded as outliers.

Fastest growing food stocks
Price ($) Market Cap ($B) EPS growth (%) Income growth (%)
Celsius Holdings Inc. (FULL) 106.05 8.0 1,100 136.7
The Chefs’ Warehouse Inc. (CHEF) 34.72 1.3 1,300 53.2
Performance Food Group Co. (PFGC) 49.50 7.7 113.0 56.8

Source: YCharts

  • Celsius Holdings Inc.: Celsius is a holding company that develops, markets and distributes various calorie burning beverages. It sells through several channels, including grocery, drugstore, convenience and nutrition stores, as well as gyms. Celsius reported Q2 2022 earnings on August 9. Net income grew approximately 11 times year-over-year as sales more than doubled. Domestic revenues nearly tripled over the period, boosted by gains in traditional channels, optimization and SKU expansion of existing accounts and expansion of the company’s Direct Store Delivery network, among others.
  • The Chefs’ Warehouse Inc.: The Chefs’ Warehouse is a distributor of specialty foods, ingredients and products. It serves customers who own and operate restaurants, hotels, culinary schools and similar food-focused businesses.
  • Performance Food Group Co.: Performance Food Group is a food distribution and food service company with operations in the US and Canada. Delivers food and related products to restaurants, businesses, schools, healthcare facilities and other distributors. On August 17, the company reported results for the 4th quarter of fiscal year 2022, which ended on July 2. Net income rose more than 142% year over year as net sales rose 57%. Improved customer mix and improved margins led to strong growth across all business segments.

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

Food stocks with the greatest dynamics
Price ($) Market Cap ($B) 12 month total return (%)
SpartanNash Co. (SPTN) 30,39 1.1 51.4
Hostess Brands Inc. (TWNK) 24.54 3.4 51.2
Grocery Outlet Holding Corp. (GO) 34.84 3.4 46.2
Russell 1000 Index ON ON -12.5
S&P 1500 Food Industry Index ON ON 11.6

Source: YCharts

  • SpartanNash Co.: SpartanNash is a grocery retailer, distributor and wholesaler. It provides a variety of independent and chain stores, its own retail stores, and US military commissaries and exchanges. The company also operates supermarkets and a fresh produce distribution network. On August 29, SpartanNash announced a quarterly cash dividend of $0.21 per common share. The dividend is payable on September 30 to shareholders from September 15, 2022.
  • Hostess Brands Inc.: Hostess Brands is a manufacturer and distributor of packaged foods. It develops, manufactures and markets a variety of baked and sweet goods throughout the United States.On September 13, the company announced the launch of Bouncers, snack cakes with cream filling. The product offers consumers “on-the-go” versions of popular Hostess products including Twinkies and Ding Dong.
  • Grocery Outlet Holding Corp.: Grocery Outlet Holding is a holding company that, through subsidiaries, offers a variety of grocery products through retail outlets throughout the West Coast and Northeast United States. Its offerings include produce, chilled and frozen foods, meat, seafood and more.

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