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While some investors might want to look for the next hot sector or up-and-coming industry to dive into, sometimes investing in more everyday industries can prove just as beneficial and profitable.
With that said, we will look at three companies that hold unique positions in an industry close to many peoples’ hearts: food.
On top of their standing as big names in their respective food industry segments, these three firms also hold strong Zacks Ranks. Let’s take a look at some of their current fundamentals to see if investors might want to grab these food stocks from the grocery aisle.
This maker of ubiquitous seasonings and spices is currently a Zacks Rank #1 (Strong Buy) and scored an “A” grade for Momentum in our Style Scores system.
McCormick’s 6.10% year-to-date price change is less than the S&P 500, but its 6.62% 12-week price change shows that it could be starting to heat up right now.
On top of this, McCormick is an interesting growth pick.
McCormick’s current cash flow growth of 6.61% is above its industry’s average, and along with its 0.95 current ratio and 26% return on equity—which both also top the industry average—this helps show that the spice maker is growing.
And based on our current Zacks Consensus Estimates, McCormick’s sales are expected to jump 20.31% this quarter to hit $1.5 billion. For the full-year, the company’s revenue is projected to grow 9.25% to touch an upward estimate of $4.84 billion.
McCormick’s quarterly earnings are set to pop 19.49% based on our current estimates, while the company’s full-year EPS is expected to gain 11.59% to reach $4.24 per share. This marks strong growth for such an established company in a niche seasoning sector that hasn’t changed much in years.
Shares of McCormick sit roughly 7% below their 52-week high, which means the flavor making power has room to climb, and the company has missed earnings expectations just twice since the start of 2013.
United Natural Foods is one of the leading national distributors of grass-fed antibiotic and hormone-free natural protein, as well as natural deli meats, cheese, bakery goods, and prepared foods.
This massive natural food supplier is currently a Zacks Rank #2 (Buy) and also sports an “A” grade for both Value and Growth in our Style Scores system, which helped it earn an overall “A” VGM grade.
UNFI is currently trading at 15x earnings, which is well below the “Food – Miscellaneous” industry’s average P/E ratio of 21.53. The company’s P/B ratio of 1.22 marks a 58.6% discount to the industry average, while United Natural’s 0.22 P/S ratio also beats the industry’s 1.23 average. These metrics help to show that the natural food company could be a value play for investors at this time.
Furthermore, United Natural’s 3.19 sales to assets ratio crushes the industry’s average of 1.13. The company’s 7.58% current cash flow also tops the industry’s 5.84% average and helps show that the company is on a strong growth trajectory.
Based on our current Zacks Consensus Estimates, United Natural’s revenues are projected to pop 4.85% in its current quarter. On top of that, the company’s sales are expected to climb 4.52% for the year to hit an upward estimate of $9.72 billion. UNFI’s earnings are projected to gain 1.23% in the current quarter and jump over 5% for the year.
In the last 12 weeks, the company has seen its stock price climb 10.43% while the “Food – Miscellaneous” industry has been flat. This means shares of UNFI could continue to gain before they come close to breaking through a new threshold.
Pinnacle Foods
The maker of Duncan Hines, Hungry-Man, Vlasic, and many more packaged staples, has seen its stock price climb 14.59% over the last year. Today, Pinnacle Foods is a Zacks Rank #2 (Buy) and scored an overall VGM grade of a “C.”
Pinnacle Foods’ 14.97% current cash flow growth far outpaces the industry’s 5.84% average and helps show that the company is expanding. On top of that, the company’s earnings per share are projected to climb 8.49% in its current quarter, based on our current Zacks Consensus Estimates.
For the year the company’s revenues are only set to gain 0.93% to hit $3.20 billion. But for an established firm like Pinnacle Foods, those small gains represent somewhat solid growth. More than that, the packaged food giant’s earnings are expected to gain 18.76% for the year, which helps to show that the company has set its sights on drastically improving its bottom line.
In addition to this, Pinnacle offers a respectable 2.27% dividend and could be an attractive option for income-focused investors.
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Food Industry Staples: 3 Stocks to Buy Now
While some investors might want to look for the next hot sector or up-and-coming industry to dive into, sometimes investing in more everyday industries can prove just as beneficial and profitable.
With that said, we will look at three companies that hold unique positions in an industry close to many peoples’ hearts: food.
On top of their standing as big names in their respective food industry segments, these three firms also hold strong Zacks Ranks. Let’s take a look at some of their current fundamentals to see if investors might want to grab these food stocks from the grocery aisle.
McCormick & Company (MKC - Free Report)
This maker of ubiquitous seasonings and spices is currently a Zacks Rank #1 (Strong Buy) and scored an “A” grade for Momentum in our Style Scores system.
McCormick’s 6.10% year-to-date price change is less than the S&P 500, but its 6.62% 12-week price change shows that it could be starting to heat up right now.
On top of this, McCormick is an interesting growth pick.
McCormick’s current cash flow growth of 6.61% is above its industry’s average, and along with its 0.95 current ratio and 26% return on equity—which both also top the industry average—this helps show that the spice maker is growing.
And based on our current Zacks Consensus Estimates, McCormick’s sales are expected to jump 20.31% this quarter to hit $1.5 billion. For the full-year, the company’s revenue is projected to grow 9.25% to touch an upward estimate of $4.84 billion.
McCormick’s quarterly earnings are set to pop 19.49% based on our current estimates, while the company’s full-year EPS is expected to gain 11.59% to reach $4.24 per share. This marks strong growth for such an established company in a niche seasoning sector that hasn’t changed much in years.
Shares of McCormick sit roughly 7% below their 52-week high, which means the flavor making power has room to climb, and the company has missed earnings expectations just twice since the start of 2013.
United Natural Foods, Inc. (UNFI - Free Report)
United Natural Foods is one of the leading national distributors of grass-fed antibiotic and hormone-free natural protein, as well as natural deli meats, cheese, bakery goods, and prepared foods.
This massive natural food supplier is currently a Zacks Rank #2 (Buy) and also sports an “A” grade for both Value and Growth in our Style Scores system, which helped it earn an overall “A” VGM grade.
UNFI is currently trading at 15x earnings, which is well below the “Food – Miscellaneous” industry’s average P/E ratio of 21.53. The company’s P/B ratio of 1.22 marks a 58.6% discount to the industry average, while United Natural’s 0.22 P/S ratio also beats the industry’s 1.23 average. These metrics help to show that the natural food company could be a value play for investors at this time.
Furthermore, United Natural’s 3.19 sales to assets ratio crushes the industry’s average of 1.13. The company’s 7.58% current cash flow also tops the industry’s 5.84% average and helps show that the company is on a strong growth trajectory.
Based on our current Zacks Consensus Estimates, United Natural’s revenues are projected to pop 4.85% in its current quarter. On top of that, the company’s sales are expected to climb 4.52% for the year to hit an upward estimate of $9.72 billion. UNFI’s earnings are projected to gain 1.23% in the current quarter and jump over 5% for the year.
In the last 12 weeks, the company has seen its stock price climb 10.43% while the “Food – Miscellaneous” industry has been flat. This means shares of UNFI could continue to gain before they come close to breaking through a new threshold.
Pinnacle Foods
The maker of Duncan Hines, Hungry-Man, Vlasic, and many more packaged staples, has seen its stock price climb 14.59% over the last year. Today, Pinnacle Foods is a Zacks Rank #2 (Buy) and scored an overall VGM grade of a “C.”
Pinnacle Foods’ 14.97% current cash flow growth far outpaces the industry’s 5.84% average and helps show that the company is expanding. On top of that, the company’s earnings per share are projected to climb 8.49% in its current quarter, based on our current Zacks Consensus Estimates.
For the year the company’s revenues are only set to gain 0.93% to hit $3.20 billion. But for an established firm like Pinnacle Foods, those small gains represent somewhat solid growth. More than that, the packaged food giant’s earnings are expected to gain 18.76% for the year, which helps to show that the company has set its sights on drastically improving its bottom line.
In addition to this, Pinnacle offers a respectable 2.27% dividend and could be an attractive option for income-focused investors.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>