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Delayed Nyse  -  04:00:02 2023-01-27 pm EST
51.13 USD   +0.91%
01/26Campbell Soup Appoints Carrie Anderson Chief Financial Officer
01/25Campbell Soup Co : Change in Directors or Principal Officers (form 8-K)
01/25Campbell Appoints Carrie Anderson Chief Financial Officer
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Food producers stocks offer inflation protections

11/21/2022 | 05:47am EST

From a long-term perspective, the food stocks industry belongs in the portfolio. The food industry is classified as one of the so-called non-cyclical sectors of the economy because food is high on the list of household consumption priorities. While you change your mind about buying a car or television when your family's financial situation is bad, you don't stop buying food.

This is reflected in the share prices of food producers and processors, which are also subject to the general mood of investors in the stock market, but to a much lesser extent. The volatility of non-cyclical stocks is significantly lower. Yet they maintain a long-term growth rate of plus or minus the rate of inflation, which follows from the nature of these firms' activities. As a rule, about half of the profits are then paid out to shareholders in dividends. Shares in food producers thus offer an ideal way to protect capital from inflation over the long term and have a small passive dividend income.

The biggest companies in the industry

*The biggest players in the market are Nestle and Unilever. We know the Swiss company Nestle by its namesake brand, but its product portfolio includes many other brands such as Nescafe, Nesquik, Orion, Maggi, and Friskies. The British-Dutch consortium Unilever has a slightly broader focus and, in addition to the food brands Knorr, Hellmann's, Lipton, Rama, Algida, or Magnum, also produces drugstore products under the brand's Axe, Rexona, Dove, Signal, Cif or Domestos. *The third in the order is the American company Kraft Heinz, whose main activities are overseas, but also in the market, we can find a few brands such as Milka, Jacobs, or Figaro.

The fourth major producer of food products is the French company Danone, which, in addition to yogurts, also sells Aqua bottled water.

ING and KBC mutual funds

You would look in vain for a mutual fund focusing exclusively on the food industry. However, ING and KBC have sector funds focusing on personal consumption, with the food industry, beverages, tobacco, and pharmaceuticals making up a large part of the portfolio. Both funds are in the black on three, five, and 10-year time horizons, with the KBC fund having the better historical performance.

Given that food industry stocks are relatively expensive today with P/Es of 15-20 and trading around long-term highs, this is not a good time to buy them. Archer Daniels Midland Company stock may be an exception. However, they have a long-term place in the portfolio. Food will always be in demand, as food is one of the basic physiological needs of humans.

Is it a new opportunity?

In recent years, consumers have been much more open to plant-based foods. However, in the context of the current economy, where prices of all commodities and the cost of living are rising across the board, they are moving away from experimentation. However, experts agree that in the future our diet will be plant-based. And those producers who jump on the green bandwagon now will be the best of them.

Dairy alternatives, meat-free meat-like products, spreads made from legumes and other plant-based ingredients, or gluten-free flour. These are all products that have been appearing on supermarket shelves in greater numbers in recent years. They have lost the label of products that consumers buy when they have health problems such as intolerances or allergies. They have also found their way to those who care about the environment and want to eat more ethically.

The 2 best stocks from the food and snacks sector to buy now

At the mention of food stocks, you probably think of grocery stores and related retailers, wholesalers, and suppliers. These types of companies do indeed appear on this list, but it also includes a number of companies that make these foods possible.

That means we're looking for stocks that seem poised to perform well in the near term, when consumers feel inflation, and also over the longer term.

*Short-term performance is difficult to judge. The Consumer Price Index (CPI) rose 8.5% in May, but the rise in food costs was even higher at 10.1%. *Food costs in the household food category rose even faster, by 11.9%.

This means that companies in this sector have no choice but to balance rising input costs, pass these prices on to consumers, and hope that the calculations work out in their favor. The following stocks seem, Gainy recommended, to be some of the best ones that will be able to balance these issues.

Coca-Cola (KO)

Coca-Cola is sure to show up on various lists of stocks to buy throughout the rest of 2022 and into 2023. It does especially well when the going gets extreme.

*This can be proven by a few components, counting its five-year month-to-month beta of 0.59. Beta measures the systemic hazard of a given stock or portfolio relative to the broader showcase, with a number underneath 1 considered less unsafe. *As the showcase proceeds to churn through 2022, anticipate Coca-Cola stock to reflect generally 59% instability. *Coca-Cola is getting a part of the consideration for its profit, which hasn't been cut since 1963. It's fair, another sign that financial specialists can tally on KO stock indeed in times of turbulence.

Campbell Soup (CPB)

Shares of Campbell Soup (NYSE:CPB) are synonymous with value, and the theory goes that in shrinking economies, consumers buy more soup.

That wasn't really true during the 2008 recession, at least at one point, when sales plunged 7% in one quarter.

In 2022, meanwhile, it was a different story, whether you want to call the period a recession or not: sales for the period ending May 1 rose 7%, even though volume was down 3%.

This suggests that not only could consumers actually be buying more soup this time around but also that Campbell Soup could actually skyrocket if it signs off on supply chain issues. In that case, it could theoretically charge lower prices because input costs would be reduced.

At the moment, this is just a guess, because Campbell Soup management has said that prices could rise again in the next few months.

Media Contact

Company Name: Food app

Contact Person: John Wick

Email: info@gainy.app

Address:773 Vista Tulocay ln, Unit 215

City: Napa

State: CA, 94559

Country: United States

Website: https://www.gainy.app/

Source: www.abnewswire.com


(C) 2022 M2 COMMUNICATIONS, source M2 PressWIRE

Stocks mentioned in the article
ChangeLast1st jan.
CAMPBELL SOUP COMPANY 0.91% 51.13 Delayed Quote.-10.71%
UNILEVER PLC -0.56% 4021 Delayed Quote.-3.85%
01/26Campbell Soup Appoints Carrie Anderson Chief Financial Officer
01/25Campbell Soup Co : Change in Directors or Principal Officers (form 8-K)
01/25Campbell Appoints Carrie Anderson Chief Financial Officer
01/25Campbell Soup Company Announces the Appointment of Carrie L. Anderson as Executive Vice..
01/25Campbell Soup Company Announces the Appointment of Carrie L. Anderson as Chief Financia..
01/24New Chunky« Ghost Pepper Chicken Noodle Soup Is So Spicy You Need to Sign a Waiver to T..
01/18Campbell Soup Says it Will Consolidate Snacks Division Offices Into Camden HQ
01/18Campbell to Consolidate Snacks Offices and Invest $50 Million in Camden Headquarters to..
01/13S&P 500 Posts 2.7% Weekly Climb as Easing Consumer Price Inflation Boosts Hopes for Slo..
01/12Campbell's« Chunky« Enters the Metaverse with Fortnite Creative and Introduces The Chun..
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Analyst Recommendations on CAMPBELL SOUP COMPANY
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Financials (USD)
Sales 2023 9 263 M - -
Net income 2023 869 M - -
Net Debt 2023 4 290 M - -
P/E ratio 2023 17,9x
Yield 2023 2,98%
Capitalization 15 312 M 15 312 M -
EV / Sales 2023 2,12x
EV / Sales 2024 2,06x
Nbr of Employees 14 700
Free-Float 59,4%
Duration : Period :
Campbell Soup Company Technical Analysis Chart | MarketScreener
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Technical analysis trends CAMPBELL SOUP COMPANY
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus HOLD
Number of Analysts 20
Last Close Price 51,13 $
Average target price 53,00 $
Spread / Average Target 3,66%
EPS Revisions
Managers and Directors
Mark A. Clouse President, Chief Executive Officer & Director
Mick J. Beekhuizen CFO, Executive VP, President-Meals & Beverages
Keith R. McLoughlin Non-Executive Chairman
Craig Slavtcheff Chief Innovation, Research & Development Officer
Julia Anderson Chief Technology & Information Officer
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