Top Food Stocks for Q2 2022
The food industry is composed of companies that focus primarily on offering food and nonalcoholic beverage products. It includes grocery stores, food distribution companies, and other companies offering consumer staples that consumers either eat or drink. It does not include restaurant businesses, many of which are considered cyclical because consumers tend to dine out less during economic slumps. Companies in the food industry include The Kroger Co., Darling Ingredients Inc., and B&G Foods Inc.
The food sector, as represented by the S&P 1500 Food Products Industry Index, has outperformed the broader market, with a one-year trailing total return of 20.2% compared with 13.8% for the Russell 1000 Index, as of March 4, 2022.
Here are the top three food stocks with the best value, the fastest growth, and the most momentum. All numbers in the tables below are as of March 4, 2022.
These are the food 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.
- JBS S.A.: JBS is a Brazil-based meat producer. It processes beef, pork, lamb and chicken, and produces convenience foods. The company also sells leather, hygiene and cleaning products, and metal packaging. In early February, JBS agreed to pay $52.5 million to settle a lawsuit accusing meat-packing companies of price-fixing in the $63-billion-a-year U.S. beef market. Prices for beef and other meat products have soared amid the pandemic. The company said in a statement that its agreement to settle was not an admission of liability but was in its best interest. It added that it would defend against beef price-fixing claims made by other plaintiffs.
- Sendas Distribuidora S.A.: Sendas Distribuidora is a Brazil-based food distribution company. It operates through both retail and wholesale outlets, selling products such as food, bazaar items, household products, clothes, and beverages. The company’s stores operate under the name “ASSAI”.
- Ingles Markets Inc.: Ingles Markets operates a supermarket chain in the southeast U.S. Its supermarkets offer a broad range of food products, including grocery, meat and dairy products, produce, and frozen foods and other perishables. The company also offers non-food products such as fuel, pharmacy products, and more. Ingles Markets announced in February the promotion of Patricia E. Jackson to chief financial officer (CFO). Jackson has been with the company since 2010 and before that she was the CFO of Sisters of Mercy Services Corp.
These are the top food stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings per share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.
|Fastest Growing Food Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Celsius Holdings Inc. (CELH)||54.87||4.1||-50.0||157.6|
|The Chefs’ Warehouse Inc. (CHEF)||31.74||1.2||N/A||98.2|
|Whole Earth Brands Inc. (FREE)||9.07||0.4||N/A||92.4|
- Celsius Holdings Inc.: Celsius is a holding company that develops, sells, and distributes a variety of calorie-burning beverages. It sells through multiple channels, including grocery, drug, convenience, and nutrition stores, as well as gyms.
- The Chefs’ Warehouse Inc.: The Chefs’ Warehouse is a specialty food distributor. It distributes high-quality artisan ingredients to fine-dining restaurants, hotels, caterers, and gourmet stores throughout the U.S. and Canada. The company announced in late December that it has acquired substantially all of the assets of CGC Holdings Inc., a provider of fine produce and seafood that does business under the name Capital Seaboard. Financial terms of the transaction were not disclosed.
- Whole Earth Brands Inc.: Whole Earth Brands is a global food company that provides premium plant-based sweeteners, flavor enhancers, and other health-focused foods. Its portfolio of brands includes Whole Earth Sweetener, Wholesome, Swerve, Pure Via, Equal, and Canderel. The company announced in January the appointment of Duane Portwood to CFO. Portwood has more than 30 years of corporate financial management and executive experience, and previously was CFO for Tegra Global.
These are the food stocks that had the highest total return over the last 12 months.
|Food Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Albertsons Companies Inc. (ACI)||36.16||17.7||105.4|
|The Andersons Inc. (ANDE)||48.28||1.6||91.2|
|SpartanNash Co. (SPTN)||33.00||1.2||80.6|
|Russell 1000 Index||N/A||N/A||13.8|
|S&P 1500 Food Products Industry Index||N/A||N/A||20.2|
- Albertsons Companies Inc.: Albertsons Companies is a food and drug retailer. It operates a chain of grocery stores selling produce, canned items, baked goods, and other food products. It also operates pharmacies, fuel centers, distribution centers, and manufacturing facilities.
- The Andersons Inc.: The Andersons is a diversified agriculture company. It operates within the commodity trading, ethanol, and plant nutrient sectors. The company operates grain terminals, ethanol plants, and wholesale agricultural nutrient facilities. The Andersons announced in mid-December a 3% increase in its quarterly cash dividend to $0.18 per share. The first payment of the new, higher dividend was scheduled for Jan. 21, 2022 to shareholders of record as of Jan. 3, 2022. The company said that the increase in the dividend was motivated by its strong cash flow and operating performance.
- SpartanNash Co.: SpartanNash is a food solutions company. It distributes grocery products to a range of different independent and chain retailers, its own retail stores, and U.S. military commissaries and exchanges. The company operates supermarkets as well as a fresh produce distribution network. SpartanNash recently announced that its board of directors approved a quarterly cash dividend of $0.21 per common share, a 5% increase. The dividend is scheduled to be paid on March 31, 2022 to shareholders of record as of March 17, 2022.
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