Check Out These 4 Top Food Stocks Amidst Persistent Inflation
Ahead of May’s CPI release this Friday, analysts are expecting an 8.2% year-over-year increase in CPI. For reference, April’s CPI rose by 8.3% year-over-year. As such, with concerns of inflation persisting, investors could be looking to rotate into safer and less risky sectors of the stock market. For the most part, food stocks would fit this description. Food stocks include grocery stores, food distribution companies, and other companies that offer staples that consumers eat or drink. Regardless of the economic conditions, demand will always exist for these products.
A food stock that investors may be taking note of right now could be Campbell Soup Company (NYSE: CPB). The company yesterday posted commendable quarterly results, beating Wall Street estimates on revenues as well as earnings. The company attributes this to sustained demand as well as improved supply. Apart from that, Hormel Foods (NYSE: HRL) posted robust quarterly results last week, with its top and bottom lines increasing year over year. Hormel owes this to its balanced business model, robust brands, and efficient management team. With the food industry seeming to perform well, here are four food stocks to watch in the stock market today.
Food Stocks To Watch Right Now
- General Mills Inc. (NYSE: GIS)
- US Foods Holding Corp. (NYSE: USFD)
- The Kellogg Company (NYSE: K)
- Tyson Foods Inc. (NYSE: TSN)
Starting us off today is General Mills. Put simply, the company is a manufacturer and marketer of branded consumer foods sold through retail stores. Whether it is branded or unbranded food products, it is one of the major suppliers to the North American food service and commercial baking industries. Additionally, it is the face behind many well-known brands such as Häagen-Dazs, Cheerios, Cocoa Puffs, and Trix among others. Leveraging on its stronger execution and support behind brand building, the company has improved its competitiveness in the industry over the past few years.
Last month, General Mills entered into a definitive agreement to acquire TNT Crust. For those unfamiliar, TNT Crust manufactures frozen pizza crusts for regional and national pizza chains, foodservice distributors, and retail outlets. For a sense of scale, TNT Crust had net sales totaling approximately $100 million in 2021. This acquisition on General Mill’s part looks to complement its current frozen baked goods portfolio. Included in the acquisition are two manufacturing facilities in Green Bay, Wisconsin, and one is in St. Charles, Missouri. The transaction is expected to close in the first quarter of fiscal 2023. Given this, will you be investing in GIS stock?
Next up, we have US Foods. Put simply, it is a food service distributor that is primarily engaged in the marketing and distribution of fresh, frozen, and dry food and non-food products to its customers throughout the U.S. The company’s customers include restaurants, hospitals, nursing homes, hotels, colleges, as well as governmental and military organizations. For a sense of scale, the company has a network of over 69 distribution facilities and a fleet of approximately 6,500 trucks. USFD stock has been moving sideways for most of the year. Could things be improving anytime soon?
In May, the company announced a strategic agreement with Kalera, one of the world’s leading hydroponic indoor vertical farming companies. This will effectively expand the company’s local and sustainable fresh produce portfolio. Moreover, this partnership will grant US Foods access to fresh, sustainable produce all year round through Kalera’s network of controlled environment indoor farms. In other news, the company also posted its first-quarter 2022 financials recently. To highlight, its net sales rose by 23.9% from a year ago to $7.8 billion. Besides that, gross profit increased by 19.1% year-over-year to $1.2 billion. Considering these developments, is USFD stock one to buy?
The Kellogg Company
Kellogg’s is a manufacturer and marketer of ready-to-eat cereals and convenience foods. Its principal products are snacks ranging from crackers, cereals, frozen waffles, to noodles. You may know its products through brands such as Kellogg’s Corn Flakes, Cheez-It, Pringles, and many more. Looking at its market reach, Kellogg’s distributes its products to more than 180 countries around the world. Last month, the company released its first-quarter 2022 results.
Diving in, the company reported that its net sales for the quarter rose by 2.4% year-over-year to $3.67 billion. As for Kellogg’s earnings, it raked in a net income of $424 million from $371 million in 2021. Accordingly, diluted earnings per share jumped to $1.23 per share from $1.07 per share. In the same report, Kellogg’s also raised its guidance for organic net sales to grow by roughly 4%, reflecting momentum in its business. CEO Steve Cahillane said, “The strength of our portfolio is evident, as we more than offset the sales and cost impact of supply recovery in North America cereal with sustained momentum in snacks growth around the world.” Given its performance, this quarter, is K stock worth checking out?
Tyson Foods is a company that built its name on providing families with wholesome and great-tasting protein products. Its segments include Beef, Pork, Chicken, and Prepared Foods. Impressively, the company is also the world’s second-largest processor and marketer of chicken, beef and pork. To put into perspective, the company has over 139,000 employees and brings in revenues of over $40 billion annually. With some of the fastest-growing portfolio of protein-centric brands, it should not be surprising that TSN stock often comes to mind when investors are looking for the best consumer stocks to buy. In fact, the stock has risen by more than 12% over the past year despite broad market volatility.
On May 9, Tyson Foods provided its fiscal second-quarter financial update. The company’s total sales for the quarter were $13.1 billion, representing an increase of 15.9% compared to the prior year’s quarter. Meanwhile, its GAAP earnings per share climbed to $2.28, up 75% year-over-year. According to Tyson, these financial figures are a reflection of the increasing consumer demand for its brands and products. To top it off, the company was also able to reduce its total debt by approximately $1 billion. Thus, does TSN stock have a spot on your watchlist?