3 Food & Beverage Stocks for This Thanksgiving Day
The six-week shopping spree is about to kick-start with Thanksgiving and retailers ready with what U.S. now needs the most – discounts!
Wallets are apparently a bit fatter this year as steeper food prices have been compensated by the magical drop in gasoline prices. The National Retail Federation (NRF) has compiled a 4.1% spending rise forecast for the six-week holiday shopping season. This is much higher than the 3.1% rise last holiday season and average growth of 2.9% over the past one decade. If this season’s prediction comes true, U.S. spending will have gone up more than 4% higher for the first time in three years.
Does this seem too good to be true? Thanksgiving is mostly about The Meal with family. Besides turkey, there is also bread stuffing, rolls, butter, sweet and mashed potatoes, carrots, corn, cranberry sauce and of course, beverages. So will high food prices dent the consumer more this time around?
According to the latest data from the American Farm Bureau Federation, the average cost of serving 10 people for Thanksgiving is expected to rise 37 cents from last year to $49.41. While sweet potatoes, dairy products, pumpkin pie mix, coffee, sugar and eggs have seen the largest increase in prices, the big-ticket item – a 16-pound turkey – has fallen by 11 cents to $21.65. About 20% of the annual turkey meat is carved on Thanksgiving Day alone.
Overall, the cost of spending on food is still less than $50 per person, suggesting that America will spend more on food this year as well, which will result in higher revenues for food and beverage companies. Even a small price hike will boost their profit margins. So betting on these stocks should be a winning strategy for investors looking for profits from higher spending on Thanksgiving feasts.
Below, we have highlighted some picks that are supported by a Zacks Rank #2 (Buy), indicating outperformance.
3 Stocks to Consider
ConAgra Foods Inc. (CAG)
Based in Omaha, NE, ConAgra Foods is one of the largest packaged food companies in North America. It provides branded and private branded foods such as meals, entrees, condiments, sides, snacks, desserts, ready-to-eat cereals and retail bakery goods. The company’s lineup also includes globally available commercial foods such as frozen and sweet potato items, dehydrated vegetables and seasonings, and spice and frozen bakery goods.
Some of the leading brands include Banquet, Chef Boyardee, Egg Beaters, Healthy Choice, Hebrew National, Hunt's, Marie Callender's, Orville Redenbacher's, PAM, Peter Pan, Reddi-wip, Slim Jim, Snack Pack, Lamb Weston, and Spicetec Flavors & Seasonings.
McCormick & Company Inc. (MKC)
Based in Sparks, MD, McCormick is a global leader in creating flavors. It manufactures, markets, and distributes spices, herbs, seasoning mixes, condiments, recipes and other flavorful products to the entire food industry. Some of the major brands are McCormick, Lawrys, Club House, billy bee, Ducros, Schwartz, Kamis, EL Guapo, Lawrys, Kohinoor, Thai Kitchen, Simply Asia, Vahine and DaQiao.
For this Thanksgiving Day, McCormick is offering five special recipes – Thanksgiving Appetizers, Thanksgiving Side Dishes, Thanksgiving Main Dishes and Entrees, Thanksgiving Deserts, and Thanksgiving Leftover Recipes.
Dr Pepper Snapple Group, Inc. (DPS)
Based in Plano, TX, Dr Pepper Snapple Group is one of the leading beverage companies in the Americas. It manufactures, markets and distributes a broad range of non-alcoholic beverages in the United States, Canada, Mexico, and the Caribbean. The company offers a portfolio of flavored (non-cola) carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs), including ready-to-drink teas, juices, juice drinks, mixers and water.
Some of its well-known CSD brands include Dr Pepper, Canada Dry, 7UP, Squirt, Crush, A&W, Penafiel, Sunkist soda, Schweppes, and Sun Drop while the NCB brands include Snapple, Hawaiian Punch, Motts, Clamato, Mr & Mrs T mixers, and Roses.
Bottom Line
The sumptuous spread clearly isn’t limited to the dining table. Turkey Day also spreads optimism in the broad food and beverage space, making the above stocks quite tasty.
Read the Full Research Report on DPS
Read the Full Research Report on CAG
Read the Full Research Report on MKC
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