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Coronavirus-Led Social Distancing: Food Delivery Stocks in Focus

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As the coronavirus pandemic reached epic proportions, governments across the globe are increasingly advocating social distancing to prevent the spread of this contagious disease in a community. The threat of community transmission is being perceived as a potent risk factor, compelling local administration and healthcare officials to issue advisories to abstain from large social gatherings.  

In addition, most corporate firms are encouraging employees to work from the safety of their homes for at least the end of this month to avoid being infected through possible exposures. This, in turn, will not only keep the virus at bay but also help them fulfill their professional commitments to minimize the loss of businesses.

With a large section of the population being forced to confine themselves at home, food delivery stocks are gradually gaining in precedence. Moreover, as food items per se are not known to transmit the Covid-19 or other respiratory viruses, they are considered relatively safe when delivered through online orders.

Social Distancing: The New Buzz Word

Per the Centers for Disease Control and Prevention (CDC), social distancing refers to “remaining out of congregate settings, avoiding mass gatherings, and maintaining distance (approximately 6 feet or 2 meters) from others when possible.” In other words, it aims to distance people from social gatherings like sporting events, movie theatres, schools, colleges, universities, restaurants, churches or other public events to reduce the probability of an exposure to the virus.

The idea is to ‘flatten the curve’ or spread out the new coronavirus cases through social distancing and self-quarantine so that the bulk of the cases do not occur at the same time, thus offering healthcare officials adequate time to respond to the situation. It is primarily aimed to maintain a safe distance from people in order to minimize infection risks and not dissuade them into isolating themselves socially. This is virtually impossible in most sporting events, which lead to the deferment of football tournaments like the English Premier League, UEFA Champions League and other major sporting extravaganzas globally.

Food Delivery Service to the Rescue

Social distancing is often hard to achieve in restaurants due to profitability factors, robbing food lovers an opportunity to satiate their taste buds. However, with the availability of various food delivery apps, the basic paradigm of a restaurant or a food-serving location has been completely redefined and customers have gained access to sumptuous menus, with the online ordering and delivery system at their disposal. 

More and more customers are now ordering food to be delivered right at their doorstep, thereby adhering to the safety guidelines of the government while treating themselves with mouth-watering delicacies. With new apps and smartphones being the order of the day, restaurants are collaborating with various food delivery chains to make it easier for customers to place orders.

“One man's loss is another man's gain.” — The adage, although crude, appears perfect in the current scenario.

3 Food Delivery Stocks in Limelight

Uber Technologies, Inc. (UBER - Free Report) : Uber Eats, which offers meal preparation and delivery services, has helped Uber gain a smart pivot in the food delivery market. The stock has a long-term earnings growth expectation of 48.2%. Earnings estimates for the current and next fiscal have moved up 14.6% and 34.3%, respectively, over the past year. Uber currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Grubhub Inc. (GRUB - Free Report) : Founded in 2004, Chicago-based Grubhub is a leading online and mobile food ordering company. The company's platform assists diners in searching for local restaurants, tracking orders and re-ordering for convenience. 

Grubhub is riding on the shift from offline to online food ordering, which is driven by convenience and easy accessibility, especially among millennials. Meanwhile, restaurants, which have difficulties delivering food on their own, are signing up with Grubhub to reach customers and build a new sales channel. This Zacks Rank #3 (Hold) stock has a long-term earnings growth expectation of 32%.

Blue Apron Holdings, Inc. (APRN - Free Report) : Headquartered in New York, Blue Apron delivers original recipes, and fresh and seasonal ingredients along with poultry, beef and lamb. Additionally, the company offers a wine delivery service that can be paired with its meals. This Zacks Rank #2 stock delivered a positive earnings surprise of 45.4%, on average, in the trailing four quarters.

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