Food stocks hold massive opportunity that is often misunderstood by investors. While technically retailers, food stocks hold the added distinction of providing us with a necessity we could not survive without. This makes food stocks similar to utilities, with the added benefit of being something most of us actually enjoy purchasing and preparing, unlike your hydro bill.
The market provides us with an ample number of food stocks to invest in, many of which have lucrative growth prospects for long-term investors.
Here are four of those investment options to consider.
High Liner Foods Inc. (TSX:HLF) is one of the largest players in the frozen seafood market, owning several well-known and respected brands such as C. Wirthy & Co., Fisher Boy, High Liner, Icelandic Seafood brands, Mirabel, and Sea Cusine.
High Liner also provides unbranded and custom products to a host of supermarkets and bulk-club stores that all contribute to High Liner’s commanding share of the frozen seafood market, creating a sizable moat against competitors.
High Liner also continues to expand where the opportunity presents itself. Last year, the company acquired shrimp distributor Rubicon Resources in a $107 million deal that is already being attributed to a bump in earnings.
In terms of a dividend, High Liner offers an alluring 5.44% yield quarterly dividend, making it a very intriguing investment option.
Maple Leaf Foods is well known for its line of pork- and poultry-based products that are released under a variety of brands.
Maple Leaf recently underwent a massive rebranding effort, placing an emphasis on being sustainable and providing products that are free of chemicals, colours, sweeteners, and preservatives. The company is also committed to revamping its product packaging, making it both simple and sustainable, highlighting the use of simple, easy-to-read ingredients on its packaging.
The new packaging is being rolled out over the course of the year, along with the reformulating of its entire product portfolio.
This is an evolutionary step for the market that consumers want, and as a market leader, Maple Leaf can deliver it in advance of the competition, which is a huge opportunity for the company.
Maple Leaf offers investors an appetizing dividend which pays out a 1.64% yield.
Premium Brands Holding Corporation (TSX:PBH) is an acquisition-focused food company that holds plenty of investment potential.
Over the past few years, Premium Brands has acquired a handful of food businesses on both sides of the border, integrating them into what has become a well-oiled machine.
Last month, the company completed the $237 million acquisition for Oberto Brands after announcing the acquisition of Toronto-based deli meat manufacturer Concord Premium Meats Ltd.
From a results standpoint, Premium Brands is firing on all cylinders, with the company posting record revenues that surpassed the same quarter last year by over 20%. While that incredible level of growth may cool in future, there’s little reason to doubt that overall growth of the company will slow anytime soon.
Premium Brands pays a respectable 1.46% quarterly yield.
Saputo Inc. (TSX:SAP) is an interesting investment. The dairy producer markets its cheese and dairy products in over 40 countries under a host of brand names.
With talk intensifying about the future of Canada’s protected dairy market, you would think that Saputo would be in favour of maintaining the current arrangement, but the company welcomes the added competition.
Saputo already has a sizable international portfolio that extends beyond Canada and the U.S, which includes operations in both Australia and Argentina. The company even floated the idea of expanding operations into Mexico.
In terms of a dividend, Saputo offers investors a quarterly dividend that provides a solid 1.52% yield.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Demetris Afxentiou has no position in any stocks mentioned. Saputo is a recommendation of Stock Advisor Canada.