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Dig Into These 3 Relishing Food Stocks Before the Year Ends

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Standing in the final month of 2023, we note that food stocks have fared decently well, showing resilience amid the hurdles associated with inflation. The combination of strong brand presence and effective pricing strategies has enabled food companies to navigate the uncertainties of a volatile economic landscape.

As 2023 approaches its finale, we have identified some food stocks that stand out as enticing opportunities for investors looking to indulge in the potential for further growth.

Showing Resilience Amid Industry Dynamics

The overall inflationary environment has affected consumers' purchasing power, influencing the volumes of many companies in the food industry. While the higher cost of inputs has been posing challenges to margins, the trend has been moderating now. Despite being no exception to the inflationary environment, food stocks have showcased a remarkable ability to withstand the headwinds.

Noteworthy is the role of robust pricing strategies that some food companies have adopted to weather the storm. Consumers’ loyalty to specific brands, coupled with companies’ steadfast commitment to innovation, has emerged as a driving force. For instance, companies have capitalized on the growing consumer preference for healthy and nourishing food by innovating in the organic products sector. The emphasis on expanding plant-based alternatives has particularly benefited companies offering meat products, which form a significant portion of consumers' staple baskets.

These upsides, along with efforts to strengthen manufacturing capacities and solidify portfolio, have been working well for a number of food companies, placing them well for further growth. Their ability to adapt to changing consumer preferences and market dynamics has proven to be a recipe for success.

In light of this, we present three enticing picks from the realm of food stocks, each flaunting a favorable Zacks Rank #1 (Strong Buy) or 2 (Buy). Notably, these stocks have witnessed share price increases in the past three months, defying declines experienced by their respective industries.

Indulge in These 3 Culinary Delights

Investors can count on meat products company Pilgrim's Pride Corporation (PPC - Free Report) . The company’s focus on key customers is a pathway for refining its portfolio and creating competitive advantages. Apart from this, Pilgrim’s Pride has been steadily augmenting the marketing support of its brands as it expands and enters new regions. PPC also resorts to frequent supply-chain improvements to enhance efficiency and reduce costs. The company producing, processing, marketing and distributing fresh, frozen, and value-added chicken and pork products, currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus mark for 2024 earnings per share (EPS) suggests growth of 62.4% from the year-ago period. The Zacks Consensus Estimate for Pilgrim's Pride’s 2024 EPS has increased from $2.10 to $2.48 in the past 60 days. Shares of PPC have gained 5% in the past three months, comfortably outpacing the industry’s decline of 7.3%.

Zacks Investment Research
Image Source: Zacks Investment Research

The Kraft Heinz Company (KHC - Free Report) is also worth a shot. The Zacks Rank #2 company has been benefiting from strength in its three key pillars — Foodservice, Emerging Markets and U.S. Retail Grow platforms. Further, this consumer-packaged food and beverage company has been on track with its transformation plan, as part of which AGILE@SCALE’s strategy has been noteworthy. The strategy has been helping The Kraft Heinz Company enhance its agile expertise and capabilities via partnerships with technology giants and cutting-edge innovators.

KHC has been undertaking strategic pricing initiatives to improve its performance.  The consensus mark for The Kraft Heinz Company’s sales and EPS for 2024 suggests growth of 0.7% and 1.5%, respectively, from the year-ago period figures. The Zacks Consensus Estimate for KHC’s 2024 EPS has risen by a penny to $3.01 over the past 30 days. Shares of the company have gained 10.9% in the past three months against the industry’s decline of 0.5%.

Zacks Investment Research
Image Source: Zacks Investment Research

Another delicacy from the same industry is Ingredion Incorporated (INGR - Free Report) , which rose 8.6% in the past three months. The company, which produces and sells sweeteners, starches, nutrition ingredients and biomaterial solutions, presently boasts a Zacks Rank of 2. The Zacks Consensus Estimate for INGR’s 2024 EPS has increased by a penny in the past 60 days to $9.74.

The consensus mark for 2024 sales and EPS suggests growth of 3.5% and 6.1%, respectively, from the year-ago period figures. Ingredion Incorporated looks well-positioned, thanks to its market and product diversity, along with its robust business model. An efficient approach to product pricing, a favorable customer mix, and a focus on driving operational excellence and productivity have been aiding the company in battling cost inflation. Ingredion Incorporated’s focus on Driving Growth Roadmap bodes well.

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