This article looks at 3 Canadian food and groceries stocks that investors should watch out for in 2021—the beverage industry, convenience foods, and how stocks have historically performed.
Inventories of packaged foods are subject to volatility in the stock market and the convenience food industry, so double-check your options before investing. According to investors and analysts, food stocks can provide good investment opportunities to diversify a portfolio.
While food and groceries prices are rising, it may be possible to offset your next bill by investing in food stocks that trade at a discount. These companies generate revenue and pass the cost on to consumers; inflationary pressure is mounting. So invest in food to make a profit, as stocks that benefit from competitive prices and inflation can help you cover your next expense bill. When it comes to food prices and stocks, it’s essential to look for the best deals, and I’ve provided three great items to add to your shopping list.
We have dozens of stocks to choose from, including stocks in essential consumer goods. Food stocks were the best performers on the S&P Food and Beverage Select Sector Index, although the index also includes companies that sell alcoholic beverages. Therefore, the food and beverage sector in the stock market is often viewed as defensive.
Large Canadian food stocks will often work in poor and strong economies as companies adopt a low-margin, high-volume strategy. The best food companies have strong brands that get consumers to pay for their products and enjoy economies of scale to keep costs down. The industry is a massive pie with many pieces, and many companies compete for the dollars associated with consumer food.
Even though Beyond Meat (BYND) is a new product, environmental and health-conscious consumers can help this company take over a small part of the meat industry. Beyond Meat (BYND) is currently one of the fastest-growing companies in the food industry. Beyond Meat, Inc., a food company, manufactures, sells and sells plant-based meat products in the US and internationally.
Canadian Packaged Food Stocks
The Campbell Soup Company and its subsidiaries manufacture and market food and beverage products in the United States and internationally. Conagra Brands Inc., along with its subsidiaries, Conagra Brands operates in North America as a food packaged consumer products company. It remains one of the best food products to buy as analysts have assessed its rising earnings.
Celsius Holdings Inc. has seen a 157% increase in sales thanks to streamlining and new store openings, making it one of our top food stocks to buy right now. This continued uptrend is impressive enough, but the stock just ended its 2021 fiscal year in late June with one of the highest growth rates in its history.
The shares have a reasonable price-to-earnings ratio (P/E) of around 15, and the company pays out a good dividend. In addition, the stock is seeing revenue growth of more than 15% in fiscal 2021 due to people returning to restaurants serving Coca-Cola fountains. In addition, Wall Street estimates revenue growth is expected to be nearly 6% next year as the company introduces new products and adapts to the latest consumer tastes.
The company has acquired Coffee Kinetics and Comfort Foods in recent years and has forged vital alliances through food stocks. Despite the low margins typical of the industry, companies still need a good product lineup that is gaining momentum and operating efficiently enough for the company to be profitable. Flowers Foods (FLO) also explored related product possibilities and ways to reduce the complexity of its overall operations.
Natural Grocers, owned by Vitamin Cottage, which is fair valued at C+ and trades at a current P/E of ~14x, is expected to benefit from rising food retail prices. A unique consumer business whose business model spans both food and vitamins, NGVC also has the competitive edge to thrive as a consumer protection action. In addition to being the best choice of stocks that can benefit from inflated food prices, I also wrote about Vitamin Cottage’s Natural Grocers as a higher value stock for 2022 and the best stock to buy in a bear market. Some food promotions may not be widespread in the long run, but you won’t know until you start digging and see how the company builds its business.
The best-packaged food stocks depend on your portfolio and investment goals – while the volatility may be ideal for intraday traders, long-term investors will want to look at stocks with more consistent returns over time. For example, if you are looking for trending stocks in the convenience food sector today, you can get a list of all mid-cap and large-cap stocks for the convenience food industry and sort them by percentage change since opening. If you are a prepackaged food business in Canada, our research will help you make informed and intelligent decisions; recognize opportunities and capitalize on them or build resilience in the face of market uncertainty.
While the end of the COVID-19 pandemic could lead to a decline in demand for Mondelez products as some home-cooked food spending returns to restaurants, the company’s stable of iconic snack brands is a crucial competitive advantage. As a result, demand for packaged food is likely to return to normal after the pandemic is entirely over, but General Mills looks like a solid supply of food to buy and hold for the long term.