The epic rise of Beyond Meat (NASDAQ:BYND) this year swiftly turned investor-attention towards the burgeoning plant-based food market. The fact is, with over seven billion people on the planet, all of which rely on food to live, the food industry is a safe bet for investors. But, which food stocks offer the most upside?
Companies that are involved in the food chain fall into several sub-industries, from farming to food processing to grocery stores and restaurants, there are a lot of potential winners in this ginormous market. Yet, due to the massive amount of competition in most of these sub-industries, there are only a handful of food stocks that make for a good investment today.
If you missed the boat on Beyond Meat, you can still realize some major gains with some of these other promising food stocks.
Multi-national tech giant Amazon (NASDAQ:AMZN) entered the food market when it purchased Whole Foods in 2017 for $13.7 billion. Since the deal closed, Amazon has seen its share price increase an impressive 89.18% from around $950 USD per share to nearly $1,800 USD, making it one of the largest food stocks in the world.
Amazon made a strategic move in June 2018 by expanding its Amazon Prime member discount program to cover all Whole Foods stores across the US, which directly affected their bottom line. Last month, the company reported its Q3 2019 financial results, which revealed that subscription services sales were up by 34% to nearly $5 billion USD.
Mondelez International (NASDAQ:MDLZ) may not be a household name, but we guarantee at least one of its brands has found its way into your snack drawer. From Dentyne and Halls to Ritz, Chips Ahoy! and Oreo, Mondelez is completely dominating the diversified food processors sector.
The company’s stock has continued to climb throughout 2019 and is up 29.71% to date. Last week, Mondelez announced a third-quarter net profit of $1.42 billion USD, which beat expectations. These results also led analysts to offer the company a price target of $61.16.
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Restaurant Brands International
The global foodservice market was worth a whopping $3.4 trillion USD last year and is expected to reach a value of $4.2 trillion USD by 2024. Of course, there are some companies that are completely dominating this space.
One of the food stocks with a massive hold on the foodservice market is Restaurant Brands International (TSX:QSR) (NYSE:QSR), a Canadian fast-food industry giant with well-known chains like Tim Hortons, Burger King, and Popeyes under its belt. Restaurant Brands is also one of the food stocks that has been offering investors major returns.
As of the beginning of 2019, the company was operating 4,846 Tim Hortons locations, 17,769 Burger King joints, and 3,102 Popeyes restaurants in 100 countries. In the last three years, Restaurant Brands stock has really taken off, increasing 108% since the beginning of 2016 from just over $31 USD to $66.28 USD. So far this year, QSR is up over 28% and is showing no sign of stopping.
MTY Food Group Inc.
Another one of the food stocks that is seeing major success in the casual dining sector is MTY Food Group Inc. (TSX:MTY). The Canadian restaurant operator and franchiser owns a seemingly endless list of brands, including Manchu Wok, Mr. Sub, TacoTime, Pinkberry, Mucho Burrito, and most recently, Papa Murphy’s. At the end of the third quarter, MTY’s network included 7,441 locations, with roughly 55% in the US and 38% in Canada.
The company’s share price has continued to climb upwards in the last three years, going from $33 USD at the beginning of 2016 to over $60 USD. Unfortunately, MTY’s Q3 2019 financial results were below analyst estimates, causing the stock to drop to its lowest level in months.
Still, at $53.21 USD, MTY stock is still up 61.34% since January 2016 and is a dividend-paying company that offers a 1.3% yield that could offer investors long-term benefits.
In short, if you are interested in food stocks, there are a ton of options out there to choose from. This is by no means an exhaustive list of potential investment opportunities in this lucrative industry, but it does shed some light on the major potential out there.
Are there any food stocks on your radar? Let us know in the comments!
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