With inflation at a 40-year high, it is not surprising that investors in the stock market may be rotating into more defensive sectors. In detail, they may be searching for companies that have the ability to pass on higher costs to consumers. With that, food stocks could be in focus right now as consumers will always need to eat. As a result, the demand for food will likely remain consistent despite the state of the economy. This comes as investors’ fears of a possible recession are closing in.
For the most part, food stocks include grocery stores, food distribution companies, and other companies that offer staples that consumers eat or drink. Regardless of the economic conditions, there will likely never be a lack of demand for food. Just last month, a report from Placer.ai reported that fast-food chains have been finding their way through the inflation crisis. The report showed that the fast-food industry has been able to maintain steady foot traffic year-over-year. With such developments, here are four top food stocks worth checking out in the stock market today.
Food Stocks To Invest In [Or Sell] Right Now
- The Coca-Cola Company (NYSE: KO)
- Chipotle Mexican Grill Inc. (NYSE: CMG)
- McDonalds Corporation (NYSE: MCD)
- Kraft Heinz Company (NASDAQ: KHC)
The Coca-Cola Company (NYSE: KO)
Starting off our list today is Coca-Cola. In general, it is a company that sells its products in more than 200 countries and territories. Its multiple billion-dollar brands can be found across various beverage categories globally. Some of these noteworthy brands are Coca-Cola, Sprite, and Fanta to name a few. Aside from soft drinks, the company also offers sports, coffee, and tea brands. For a sense of scale, Coca-Cola has more than 700,000 employees worldwide.
This week, the company reported its second quarter fiscal earnings. In the report, Coca-Cola reported earnings per share of $0.70 on revenue of $11.3 billion. In comparison, Wall Street’s consensus earnings estimate was earnings per share of $0.67 on revenue of $10.6 billion. Moving along, KO estimates a full-year 2022 fiscal earnings of $2.44 to $2.46 per share. Previously, Coca-Cola noted a guidance range for earnings per share of $2.51 to $2.55. Meanwhile, the street’s consensus earnings estimate is $2.46 per share for the full year 2022 fiscal year. As a result, KO stock closed Wednesday’s trading session at $63.01 per share.
Coca-Cola Chairman and CEO James Quincey commented in a note to shareholders, “Our results this quarter reflect the agility of our business, the strength of our streamlined portfolio of brands, and the actions we’ve taken to execute for growth in the face of challenges in the operating and macroeconomic environment.” Considering all of this, is KO stock a top food stock to watch in the stock market today?
Chiptole Mexican Grill Inc. (NYSE: CMG)
Next up, let’s take a look at Chipotle. Currently, Chipotle is one of the biggest restaurant companies in the world. The Mexican fast-casual restaurant mainly offers a menu of burritos, tacos, and salads. Meanwhile, the company operates more than 2,500 restaurants globally, the majority are based in the U.S. Aside from that, Chiptole employs more than 60,000 people. This week, Chipotle reported its second-quarter earnings and revenue that beat analyst consensus estimates.
In detail, Chipotle notched in earnings of $9.30 per share on revenue of $2.2 billion. The consensus earnings estimate was $9.03 per share on revenue of $2.2 billion. Also, revenue increased 17.0% on a year-over-year basis. The increase in total revenue was fueled by a 10.1% jump in comparable restaurant sales and new restaurant openings.
“We are pleased with our second quarter performance during a period of inflation and consumer uncertainty,” said Brian Niccol, Chairman and CEO, Chipotle. “Our pricing power and value proposition remain strong as our culinary and food with integrity commitment continues to be a key point of differentiation.” All in all, will you be watching CMG stock in the stock market today?
McDonald’s Corporation (NYSE: MCD)
Following up on that, we have McDonald’s Corporation. In brief, the company has three core segments, its U.S., International Operated Markets (IOM), and International Developmental Licensed Markets & Corporate (IDL) arms. These divisions separate their operations by regions, whereby the U.S. segment focuses on domestic markets, and the IOM segment focuses on Australia, Canada, France, and more. Meanwhile, the IDL segment focuses on Latin America and Asia.
Furthermore, MCD reported second quarter 2022 earnings of $2.55 per share on revenue of $5.7 billion. For context, Wall Street’s consensus earnings estimate came in at $2.45 per share on revenue of $5.9 billion. Despite, revenue falling 2.9% compared to the same quarter a year ago. Shares of MCD stock closed Wednesday’s trading session up modestly at $258.89 a share.
McDonald’s President and Chief Executive Officer, Chris Kempczinski had this to say, “Our second quarter performance reflects outstanding execution against our Accelerating the Arches strategy. By focusing on our customers and crew, enabled by a rapidly growing digital capability, we delivered global comparable sales growth of nearly 10%. Nonetheless, the operating environment across the competitive landscape remains challenging. While we are planning for a wide range of scenarios, I am confident that our plans and people position McDonald’s to weather this environment better than others.” With that, do you consider MCD one of the best food stocks to invest in today?
Kraft Heinz Company (NASDAQ: KHC)
To round out this list, we’ll be looking at Kraft Heinz Company. In brief, the company manufactures and markets products like condiments, dairy, meats, coffee, and other grocery products globally. Its product portfolio includes popular brands such as Kraft, Heinz, Velveeta, Jell-O, Grey Poupon, and Philadelphia to name a couple. For a sense of scale, the company is one of the biggest food and beverage companies in North America. Shares of KHC closed Wednesday’s trading session down over 5% at $36.34 a share. This comes after the company reported its second quarter 2022 fiscal earnings.
In the report, Kraft Heinz posted earnings per share of $0.70 on revenue of $6.6 billion. This is in comparison to the consensus earnings estimate of $0.67 per share on revenue of $6.4 billion. Revenue dropped 0.9% compared to the same quarter, a year prior. The company provided some guidance in the report. It said it projects a 2022 revenue of nearly $28.0 billion. The company’s previous guidance was revenue of almost $27.34 billion. While the current consensus revenue estimate is $25.62 billion.
Kraft Heinz CEO and Chair of the Board Miguel Patricio stated, “We delivered yet another quarter of strong results as we continue to successfully navigate near-term headwinds, enabled by further advancements of our long-term strategy,” he continued with, “Though the environment remains fluid, we are better able to anticipate dynamic conditions, adapt to this constantly changing environment, and demonstrate our resiliency against new challenges. We are anticipating and adapting to changing market conditions while managing inflation through pricing realization and gross efficiencies.” All in all, is KHC stock worth adding to your radar right now?