We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
2 Food Stocks to Buy Amid Heightened Market Volatility
Read MoreHide Full Article
September is living up to its connotation of being the most volatile month for the stock market but Dole (DOLE - Free Report) and Pilgrim’s Pride (PPC - Free Report) are two consumer food stocks that may be able to offer defensive safety in the portfolio.
Both consumer staples companies have landed spots on the Zacks Rank #1 (Strong Buy) list. Even better, in addition to having an “A” Zacks Style Scores grade for Value they have beta ratios under 1.0, suggesting they should be less volatile than the broader market.
Dole is a Leading Fruit Producer
As a leading producer of fresh bananas and pineapples, Dole also has a growing presence among berries, avocados, and organic produce. Although DOLE has soared over +20% year to date, it has a low-risk reading with its beta ratio at 0.84.
To that point, Dole’s offerings are a mainstay among dietary consumption, and its stock still stands out at $15 and 13.2X forward earnings. This is roughly on par with its Zacks Agriculture-Operations Industry average and a nice discount to the S&P 500’s 22.8X forward earnings multiple despite topping the impressive performances of the broader indexes in recent years.
Image Source: Zacks Investment Research
Dole’s valuation magnifies its affordable price tag as annual earnings are expected to dip -2% in fiscal 2024 but are projected to rebound and climb 19% in FY25 to $1.44 per share.
Plus, DOLE has a generous 2.01% annual dividend yield and earnings estimate revisions are up over 5% in the last 30 days for FY24 and FY25.
Image Source: Zacks Investment Research
Pilgrim’s Pride is Growing as a Poultry Producer
Producing value-added chicken products, Pilgrim’s has strived to strengthen its prepared foods category with an emphasis on organic products including non-antibiotic produce.
Checking in with a beta ratio of 0.82, Pilgrim’s stock has skyrocketed over +60% YTD but still trades at just 9.4X forward earnings. Trading around $45, PPC still offers a significant discount to the benchmark and the Zacks Food-Meat Products Industry average of 17.6X forward earnings.
More intriguing is that Pilgrim’s stock is also at a discount to its decade-long high of 25.1X forward earnings and the median of 11.1X during this period.
Image Source: Zacks Investment Research
Furthermore, Pilgrim's checks an “A” Zacks Styles Scores grade for Growth as well with EPS now forecasted to increase 183% this year to $4.79 per share versus $1.69 a share in 2023.
While earnings are projected to be virtually flat next year, EPS estimates for FY24 and FY25 have increased over 13% in the last 60 days respectively.
Image Source: Zacks Investment Research
Bottom Line
Seeing as consumer food stocks tend to be defensive investments, now appears to be a good time to buy Dole and Pilgrim's Pride shares considering their increased profitability. Low beta measurements and attractive P/E valuations also attest to this, especially with earnings estimate revisions on the rise.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
2 Food Stocks to Buy Amid Heightened Market Volatility
September is living up to its connotation of being the most volatile month for the stock market but Dole (DOLE - Free Report) and Pilgrim’s Pride (PPC - Free Report) are two consumer food stocks that may be able to offer defensive safety in the portfolio.
Both consumer staples companies have landed spots on the Zacks Rank #1 (Strong Buy) list. Even better, in addition to having an “A” Zacks Style Scores grade for Value they have beta ratios under 1.0, suggesting they should be less volatile than the broader market.
Dole is a Leading Fruit Producer
As a leading producer of fresh bananas and pineapples, Dole also has a growing presence among berries, avocados, and organic produce. Although DOLE has soared over +20% year to date, it has a low-risk reading with its beta ratio at 0.84.
To that point, Dole’s offerings are a mainstay among dietary consumption, and its stock still stands out at $15 and 13.2X forward earnings. This is roughly on par with its Zacks Agriculture-Operations Industry average and a nice discount to the S&P 500’s 22.8X forward earnings multiple despite topping the impressive performances of the broader indexes in recent years.
Image Source: Zacks Investment Research
Dole’s valuation magnifies its affordable price tag as annual earnings are expected to dip -2% in fiscal 2024 but are projected to rebound and climb 19% in FY25 to $1.44 per share.
Plus, DOLE has a generous 2.01% annual dividend yield and earnings estimate revisions are up over 5% in the last 30 days for FY24 and FY25.
Image Source: Zacks Investment Research
Pilgrim’s Pride is Growing as a Poultry Producer
Producing value-added chicken products, Pilgrim’s has strived to strengthen its prepared foods category with an emphasis on organic products including non-antibiotic produce.
Checking in with a beta ratio of 0.82, Pilgrim’s stock has skyrocketed over +60% YTD but still trades at just 9.4X forward earnings. Trading around $45, PPC still offers a significant discount to the benchmark and the Zacks Food-Meat Products Industry average of 17.6X forward earnings.
More intriguing is that Pilgrim’s stock is also at a discount to its decade-long high of 25.1X forward earnings and the median of 11.1X during this period.
Image Source: Zacks Investment Research
Furthermore, Pilgrim's checks an “A” Zacks Styles Scores grade for Growth as well with EPS now forecasted to increase 183% this year to $4.79 per share versus $1.69 a share in 2023.
While earnings are projected to be virtually flat next year, EPS estimates for FY24 and FY25 have increased over 13% in the last 60 days respectively.
Image Source: Zacks Investment Research
Bottom Line
Seeing as consumer food stocks tend to be defensive investments, now appears to be a good time to buy Dole and Pilgrim's Pride shares considering their increased profitability. Low beta measurements and attractive P/E valuations also attest to this, especially with earnings estimate revisions on the rise.