4 Food Retailers With Bite
Zacks Investment Research | Sep 06, 2019 01:51AM ET
The Food-Miscellaneous industry within the Consumer Staples sector has returned 16.5% to date. However, the industry, being in the top 41% of Zacks classified industries, remains attractive for investment.
Companies in the industry are built on innovation, as food tastes and preferences are a constantly evolving thing. Health consciousness, organic farming, local and responsible sourcing, freshness, environmental concerns among other things play a role in consumer choices.
And these affect the entire spectrum of food consumed, from dairy, snacks and spices to ready-to-cook meals.
There’s also the matter of millennials getting older and beginning to make a difference in the way the world functions. As far as food is concerned, millennials are interested in quality, speed and price. And from what we can tell from people who study their food habits, very few like to cook. Of those that do, their idea of cooking is a simple recipe that doesn’t take longer than 20-30 minutes. And they don’t like grocery shopping.
All of the above make the job difficult for miscellaneous food companies, but also increase opportunities for them. Particularly because they don’t operate in vacuum, so economic factors like rising cost of inputs and packaging materials, freight and logistics issues also impact them.
The scope for innovation is the biggest positive for these companies and the reason why we still have buy ratings on so many of them. Here are a few with a lot of promise, if you’re considering investment in the space. Otherwise, just head over to .
BRF S.A. (NYSE:BRFS)
BRF Brasil Foods SA, formerly Perdigao S.A., is a Brazil-based food company focused on the production and sale of poultry, pork, beef cuts, milk, dairy products and processed food products. The company's products include frozen whole and cut chickens; frozen pork cuts and beef cuts; processed food products including vegetables, cheese, bread and pies; dairy products such as cheeses, powdered milk and yogurts; juices, soy milk and soy juices; margarine; milk, soy meal and refined soy flour, as well as animal feed.
Zacks Rank #1
Current-year revenue and earnings expected to grow -0.22% and 109.3%, respectively.
Next-year revenue and earnings expected to grow 5.9% and 640.0%, respectively.
2019 EPS estimate is up 8 cents in the last 60 days.
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2020 EPS estimate is up 2 cents in the last 60 days.
The average earnings surprise in the last four quarters is 126.3%.
J & J Snack Foods Corp. (NASDAQ:JJSF)
J&J (NYSE:JNJ) Snack Foods Corporation is an American manufacturer, marketer, and distributor of branded niche snack foods and frozen beverages for the food service and retail supermarket industries. Its products are manufactured and distributed all over the U.S.
Zacks Rank #2 (Buy)
Current-year revenue and earnings expected to grow 3.7% and 22.7%, respectively.
Next-year revenue and earnings expected to grow 2.9% and 6.1%, respectively.
2019 EPS estimate is up 5 cents in the last 60 days.
The average earnings surprise in the last four quarters is 1.3%.
Beyond Meat, Inc. (NASDAQ:BYND)
El Segundo, California-based Beyond Meat is a food company. It manufactures, markets and sells plant-based meat products primarily in the United States and internationally. The company sells its products under the Beyond Beef, Beyond Chicken, The Beyond Burger, Beyond Meat, Beyond Sausage, Eat What You Love and The Cookout Classic brand names. The company had its IPO this year.
Zacks Rank #2
Current-year revenue is expected to grow 198.1%. Loss per share is expected to improve.
Next-year revenue and earnings expected to grow 61.8% and 253.3%, respectively. It is currently expected to generate earnings of 36 cents next year compared to a 23 cent loss this year.
2019 loss per share estimate is up 3 cents in the last 60 days.
2020 EPS estimate is up 33 cents in the last 60 days.
The average earnings surprise in the last two quarters since it started trading is 56.3%.
MGP Ingredients, Inc. (NASDAQ:MGPI)
Headquartered in Atchison, Kansas, MGP Ingredients produces and markets ingredients and distillery products to the packaged goods industry. Its Distillery Products segment primarily offers food grade alcohol, fuel grade alcohol and distillers feed. The company's Ingredient Solutions segment primarily provides specialty wheat starches and proteins, commodity wheat starches, and commodity vital wheat gluten.
Zacks Rank #2 (Buy)
Current-year revenue and earnings expected to grow 5.1% and 22.1%, respectively.
Next-year revenue and earnings expected to grow 11.8% and 26.8%, respectively.
2019 EPS estimate is up 3 cents in the last 60 days.
2020 EPS estimate is up 18 cents in the last 60 days.
The average earnings surprise in the last four quarters is 6.9%.
P/E 18.9X compared to the industry’s 27.9X.
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