The Motley Fool

2 Stocks That Could Soar on the Beyond Meat (NYSE:BYND) Hype

Beyond Meat (NASDAQ:BYND) made big news with its successful IPO earlier this month, as the excitement around its plant-based patties continues to capture the attention of customers and investors alike. Healthy eating options that taste good are hard to find, and that’s what has made the Beyond Meat story a big success that has the ability to get both vegetarians and meat eaters buying the same product.

If there’s no downgrade in taste and consumers can eat healthier, it’s easy to see why the patties would be popular among the general population. And that widespread appeal is what makes Beyond Meat an attractive investment, because the demand for its products is significant. Not only is there demand from consumers, but restaurants are showing an interest as well.

The challenge for Beyond Meat is going to be competition, as it’s not the only plant-based patty out there. However, there are other ways that investors can benefit from the hype around plant-based burgers, and that’s by investing in restaurants that sell them.

A&W Revenue Royalties Income Fund (TSX:AW.UN) is a stock that’s already seen some positive results in its latest quarterly results thanks to the success of its Beyond Meat burgers. Same-store sales growth of 10% in Q1 was a big improvement from the 5.3% that the company saw last year. The performance was so strong that the fund announced it would be raising dividend payments as well.

While it’s unclear how big of an impact offering plant-based burgers had for A&W, it’s been an early adopter of the Beyond Meat patties with the restaurant chain introducing the new burgers less than a year ago. It’s been a good way for A&W to continue to position itself as a healthy option for consumers and a way to drive more sales growth.

The fund was already a good dividend stock to own even without Beyond Meat burgers, and now, it’s uncovered even more avenues to grow, making it an appealing option for dividend and growth investors.

Recipe Unlimited (TSX:RECP) has also announced that it would be adding plant-based burgers at its Kelseys Original Roadhouse restaurants, as the company also wants to get in on the latest health craze. However, it won’t be the Beyond Meat patties that the company will use but instead the Lightlife burger, which is owned by Maple Leaf Foods.

If successful, it could mean a wider distribution with Recipe Unlimited looking to offer it at Harvey’s locations as well. It could be a big win for not only Recipe Unlimited, but Maple Leaf Foods as well if the company can establish its burgers as a viable alternative to Beyond Meat. With many different brands in its portfolio, the potential for Recipe Unlimited is significant, as it can add the burgers into its other restaurant chains as well.

The company showed strong sales growth of 23% in its most recent quarter, and adding an exciting new product could make for even more impressive results down the road.

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

Fool contributor David Jagielski has no position in any of the stocks mentioned. A&W Revenue Royalties is a recommendation of Dividend Investor Canada.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.