Top Coffee Stocks for Q2 2022
The coffee industry is complex and multilayered, including everything from producers and distributors to processors, wholesalers, and retailers. Notable names in the coffee industry include Starbucks Corp., The J.M. Smucker Co., and Restaurant Brands International Inc.
There is no single sector or index for the coffee industry, and coffee-related stocks can be found in both the consumer discretionary and consumer staples sectors. In general, retailers and coffee shops are part of the consumer discretionary group, and producers and packaged-food companies are part of the consumer staples group.
The consumer staples sector has outperformed the consumer discretionary sector, which has underperformed the broader market. The S&P 500 Consumer Staples Sector Index has posted a 16.8% total return, while the S&P 500 Consumer Discretionary Sector Index has provided a total return of 3.1%. By comparison, the Russell 1000 has returned 8.2%.
Here are the top three coffee stocks with the best value, the fastest growth, and the most momentum. The market performance numbers above and all statistics in the tables below are as of March 8, 2022.
These are the coffee stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows that you’re paying less for each dollar of profit generated.
|Best Value Coffee Stocks|
|Price ($)||Market Capitalization (Market Cap) ($B)||12-Month Trailing P/E Ratio|
|Nestle S.A. (NSRGY)||119.16||328.8||18.1|
|Restaurant Brands International Inc. (QSR)||55.27||17.1||20.6|
|Starbucks Corp. (SBUX)||84.00||96.6||22.6|
- Nestlé S.A.: Consumer staples stock Nestlé is a Switzerland-based multinational packaged food company offering a wide variety of products including baby food, bottled water, dairy products, frozen food, coffee, and more. At the end of December 2021, Nestlé announced the completion of a share repurchase program initiated at the start of 2020. On Jan. 3, the company commenced a previously announced program under which it is authorized to repurchase up to CHF 20 billion ($22 billion) worth of shares by the end of 2024.
- Restaurant Brands International Inc.: Part of the consumer discretionary sector, Restaurant Brands International is a Canada-based holding company born out of the 2014 merger of Burger King and Tim Hortons, one of the largest coffee shop and restaurant chains in Canada. The company also owns Popeyes, the Louisiana fried chicken franchise. In mid-December 2021, the company announced that it has completed its acquisition of Firehouse Restaurant Group Inc., a restaurant chain doing business under the name Firehouse Subs, for $1.0 billion.
- Starbucks Corp.: Starbucks is a consumer discretionary stock. It retails, roasts, and sells its own brand of specialty coffee. The company operates retail locations around the world and sells whole-bean coffee through various channels. Starbucks also offers other beverages, food, and a focused selection of merchandise. On Jan. 25, Starbucks entered the energy drinks category by launching its first ready-to-drink energy beverage, Starbucks BAYA Energy. The product is available at grocery stores nationwide.
These are the top coffee stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.
|Fastest Growing Coffee Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Starbucks Corp. (SBUX)||84.00||96.6||30.2||19.3|
|Keurig Dr Pepper Inc. (KDP)||37.21||52.8||96.7||8.7|
|Restaurant Brands International Inc. (QSR)||55.27||17.1||90.0||7.4|
- Starbucks Corp.: See above for company description.
- Keurig Dr Pepper Inc.: Keurig Dr Pepper is a consumer staples company that makes and distributes nonalcoholic beverage products, including coffee. The company serves customers throughout North America. On Feb. 8, the company announced its Board of Directors had declared a quarterly cash dividend of $0.1875 per share, payable on April 15 to shareholders on record as of April 1, 2022.
- Restaurant Brands International Inc.: See above for company description.
These are the coffee stocks that had the highest total return over the last 12 months.
|Coffee Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Keurig Dr Pepper Inc. (KDP)||37.21||52.8||16.9|
|Nestlé S.A. (NSRGY)||119.16||328.8||15.6|
|The J.M. Smucker Co. (SJM)||131.89||14.3||13.4|
|S&P 500 Consumer Staples Sector Index||N/A||N/A||16.8|
|S&P 500 Consumer Discretionary Sector Index||N/A||N/A||3.1|
- Keurig Dr Pepper Inc.: See above for company description.
- Nestlé S.A.: See above for company description.
- The J.M. Smucker Co.: J.M. Smucker, a consumer staples stock, manufactures food products. It is best known for its fruit spreads, peanut butters, and shortenings and oils. On Jan. 31, 2022, J.M. Smucker completed the previously announced sale of its natural and organic beverage and grains business to Nexus Capital Management LP for $110 million. J.M. Smucker said it expects the transaction to dilute its full-year adjusted earnings by approximately $0.15 per share.
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