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4 Food Stocks Up More Than 50% in 2020 With Room to Grow

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The novel coronavirus and its resultant stay-at home trends have brought about an extensive change in consumers’ eating habits and patterns. The initial period of lockdown and shelter-in-place restrictions caused Americans to increase dine at-home activities, which have now become part of the new normal. Even with the rollout of COVID-19 vaccine, people are likely to be cautious for a while and continue cooking and eating at home for now.

Markedly, increased focus on health and wellness has changed consumers’ food preferences and led them to adopt new routines. People working from home and those with children are going heavy on convenient and comfort foods such as snacking items, packaged foods and meal-kits. Certainly, greater at-home consumption is driving demand for natural food ingredients as well as packaged and snacking food products.

Impressively, these trends have been encouraging for a number of food companies, which are witnessing increased demand from retailers, mass merchants, supermarkets and e-tail customers. Consumers are largely loading pantries at once, and also opting for online shopping. This in turn has been working well for food companies, which have been ramping up their supply chain, product assortment as well as online operations to make the most of the burgeoning demand.

Further, the prospects of food players look promising as the elevated pandemic-led demand is likely to stay with us for a while. Incidentally, even after restaurants, cafes and other eateries reopened, traffic has been well below pre-pandemic levels as a number of people are still adhering to social distancing amid virus fears, while some have also got acclimatized to the new normal of dining at home. That said, we expect the increased demand trend to continue bolstering businesses of several food companies, which have also been benefiting from their focus on innovation, marketing and other brand-building strategies.

On that note, we have shortlisted four treats from the Zacks Food – Miscellaneous industry, which have rallied at least 50% over the past year and also appear well positioned for 2021.

4 Food Stocks Worth Relishing

B&G Foods, Inc. (BGS - Free Report) has been gaining on rising demand amid the pandemic-led increased at-home consumption and pantry loading trends. This manufacturer of high-quality, shelf stable food products has soared 57% over the past year. Some of the popular brands of the company are Green Giant, Back to Nature, McCann’s, Ortega, Victoria and Mama Mary. Markedly, this Zacks Rank #1 (Strong Buy) company has been witnessing an increase in demand since the second half of March 2020. In this regard, B&G Foods’ higher net sales to mass merchants, warehouse clubs, supermarkets, wholesalers and e-commerce consumers have more than offset lower demand from Foodservice clients. Management on its last earnings release stated that it expects robust demand throughout the fourth quarter and in 2021. Notably, B&G Foods is strengthening its production capacity to meet heightened market needs. Additionally, the company is benefiting from higher online sales, backed by efficient delivery services of its retail customers. Encouragingly, the Zacks Consensus Estimate for its 2021 earnings indicates a rise of 2.6% from the year-ago period’s levels. You can see the complete list of today’s Zacks #1 Rank stocks here.

Next on our list is The Hain Celestial Group, Inc. (HAIN - Free Report) . This New-York based company is engaged in the production of various natural and organic foods as well as personal care products. Markedly, the company is witnessing strong sales trends across the North American and International segments. Additionally, well-chalked innovations, marketing and assortment optimization efforts are supporting the company’s top line. It is also focused on boosting automation capabilities in plants for lowering costs and optimizing operating infrastructure. Markedly, this Zacks Rank #2 (Buy) stock has rallied 53.6% over the past year. Also, the Zacks Consensus Estimate for fiscal 2021 earnings indicates a rise of 51.2% from the year-ago period’s levels.

Investors can also count on Medifast, Inc. (MED - Free Report) , which has returned a whopping 76% in a year’s time. This Baltimore, MD-based company has been largely benefiting from strength in its OPTAVIA lifestyle solution and coaching support system. OPTAVIA combines scientifically-proven programs, effective products as well as guidance from its coaches to help consumers lead a healthier lifestyle. Notably, this Zacks Rank #2 company has been speeding up its long-term supply-chain efforts to ensure that it is able to manage the expected growth in the next few years. Further, it has made certain moves to expand capacity in powder and bar manufacturing as well as distribution. Also, Medifast is on track to scale its distribution capacity, according to the manufacturing capacity. Apart from this, the company’s focus on the development of a digital-first approach has been yielding results. Impressively, the Zacks Consensus Estimate for 2021 earnings indicates a jump of 13.8% from the year-ago period’s levels.

United Natural Foods, Inc. (UNFI - Free Report) is also worth a look. This leading distributor of specialty food products in the United States and Canada has been gaining from rising demand stemming from coronavirus-induced higher at-home consumption. Additionally, integration synergies related to Supervalu is an upside. Apart from these factors, this Zacks Rank #3 (Hold) company is focused on strategic targets that include efforts such as enhancing customer base, expanding broad-line distribution channel and augmenting its e-commerce business. Speaking of e-commerce, the company is benefiting from higher sales at Cub Foods. Encouragingly, the company’s shares have surged a substantial 80.9% in a year. The Zacks Consensus Estimate for fiscal 2021 earnings indicates a rise of 18.8% from the year-ago period’s levels.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?

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